Entity management lies at the heart of legal team functions. Managing the details between mergers and acquisitions; reconciling the shifts of personnel and policy that occur during restructuring; and navigating the complexity of regulatory and compliance measures all require a high-functioning legal team. Without a reliable entity management technology platform, legal teams are deprived of the accurate data and information they need. A robust entity management platform that delivers the right information at the right time to the right person on your legal team serves as an invaluable performance boost. Without the need to dig for data, worry about its accuracy or reconcile it with an outdated legacy system, legal teams are empowered to provide the analysis and recommendations most beneficial to their organizations. This post introduces the basics of legal entity management; runs down its advantages for each legal team; outlines the steps toward successful implementation; and, finally, takes on the ins and outs of excelling entity management through a single, reliable outsourced software solution.
Legal Entity ManagementLegal entity management, or LEM, is a strategy for handling regulatory compliance and administrative maintenance on an ongoing basis. Financial regulations in the US, Europe and worldwide enacted since the financial crisis of 2008 imposed new record-keeping and reporting requirements, among other factors that greatly increased the complexity of what organizations are expected to monitor and report on to their leadership, governments and shareholders. It's normal for the legal department of a multinational company to have to field dozens of requests in a single day about the details of ownership for international entities when leadership is planning a reconstruction or expansion. Legal entity management keeps all of these data in one place, at the fingertips of the people who need access to it. It also helps companies stay up-to-date on their fiduciary, regulatory and statutory responsibilities, gives the leadership advice on the best practices of corporate governance, and actively maintains the corporate record of all transactions, filings, reports and audits.
Advantages of Entity Management TechnologyThere are three central advantages to implementing entity management solutions for your legal team: data reliability, workplace efficiency and collaboration opportunities. Data reliability: Perhaps the strongest advantage of entity management technology is that, if run well, it creates a single, centralized repository for all entity management information and allied documents that pertain to those entities. Organizations can have confidence in a single source of data truth, knowing that the data they access are current, accurate and reliable. The hassles surrounding incomplete, duplicate and variant entity information can be minimized. Workplace efficiency: Establishing this single source of data truth reduces the data loss that commonly occurs with workplace turnover. As lawyers move from organization to organization, it is not unusual for vital pieces of company information to become lost in the shuffle. Rather than trying to track down a missing document or sift through an outgoing employee's email, new team members have access to all relevant information right from the server. Thus, any wasted time and uncertainty can be eliminated, enabling a smoother, hassle-free transition. Collaboration opportunities: These tools can be built out to accommodate multiple tasks. For example, a legal team might partner with the treasury team to track the banking details of all the accounts associated with a particular entity. Entity management technology makes that kind of cross-team, cross-functionality easy, and in doing so, it can strengthen internal relationships throughout the organization. These types of work-process efficiencies allow a legal department to focus on the core functions of advising the C-suite. Legal teams can take advantage of precise entity management data, and feel secure that their analysis and insights are built upon the best possible information.
Steps Toward Effective ImplementationMany companies adopt new technology with the hope that it will solve all their problems, only to soon learn that the technology is just a tool. But in the absence of appropriate and proper usage and maintenance, the same-old problems and redundancies soon reappear, and before long, the company is looking for some other, newer silver bullet. Firms can avoid this technical limbo by the following steps:
- Articulate a clear implementation plan that involves all users and stakeholders before implementation begins.
- Obtain buy-in from users and stakeholders, and ensure that they understand the importance of implementation, so they can focus on strategy and higher-level tasks.
- Allocate sufficient time and resources. Remember that execution risk undermines technology investment ' don't skimp on implementation investment.
- Appoint an implementation manager. This is important enough to require the full-time attention of an internal or external implementation project manager. That way, the buck stops somewhere to make sure the project is as successful as possible.
- Verify current data. Technology shouldn't be a magic solution that turns bad with incomplete information fed into the one source of data truth your organization needs.
- Reconcile current data. When data are verified, inevitably mistakes, missing information and wrong information will be discovered. Ensuring that all data and information are verified is the only way to make sure your new system does the job you 'hired' it to do.