Large entities' corporate structures serve as the foundations for their success. A well-designed corporate structure will help a business move toward its goals within its respective industry. The structure will also improve collaboration and cooperation between departments, teams, and individual staff members.
However, an expertly designed corporate structure is only part of the equation. In order for each department to effectively carry out its responsibilities while simultaneously supporting other teams, it must have access to the right resources and data. Unfortunately, this setup is a rarity among most organizations.
Countless legal organizations are still using aging entity management software. As a result, massive amounts of their data remain unstructured.
According to Law.com, a staggering 80% of legal org data is classified as unstructured. In regards to data, the term “unstructured” refers to information that is not properly managed, organized, and stored. As such, it is either partially or completely unusable.
The good news is that it is not too late for legal organizations to make use of all that data. By leveraging proactive governance strategies, these entities can tap into their unstructured data, organize it, and increase overall information transparency. In turn, this will stabilize the entire corporate structure and increase organizational productivity.
The Danger of Unruly Corporate Structures and Unstructured Data
By far, the biggest danger to having an abundance of unstructured data is compliance. There are many regulations regarding a legal organization’s responsibilities pertaining to protecting client data.
While it is certainly possible to fall out of compliance when data is structured, these risks are compounded when dealing with unstructured data. An organization cannot effectively manage unstructured data, much less protect it in accordance with relevant statutes and regulatory requirements.
In the event of a data breach, bad actors could potentially obtain countless client files and other information. This occurrence would compromise the privacy of the organization’s clients. Additionally, a breach would cause potentially irreparable damage to a firm’s reputation.
Traditionally, entities operating within the legal industry have used paper-based record-keeping practices to circumvent these concerns and minimize the risk of data exposure.
However, this approach is becoming increasingly impractical as modern legal organizations have fully embraced cloud-based entity management software. Other organizations must follow suit if they hope to remain competitive in the industry.
What Is Proactive Governance?
Proactive governance, alternatively referred to as “proactive data governance,” is the process of systematically organizing all unstructured data sources.
This process can seem daunting, especially for organizations that use a combination of paper records and on-premises servers. However, it is critical that legal organizations leverage proactive governance to regain control of their unstructured data.
The first step toward accomplishing this involves taking inventory of all data sources. These include on-premises servers, cloud storage accounts, and of course, physical minute books and other files.
From there, the legal organization will need to implement a cloud-based entity management software solution that will allow it to fully digitize all records.
Such a solution does much more than simply structuring data. In addition to improving data governance capabilities, the technology can facilitate the automation of workflows, generate tax reports, send compliance filing reminders, and make other aspects of modern legal practice easier.
The Benefits of Proactive Governance
The most obvious benefit of proactive governance is that it allows legal organizations to start using all of the data they have been collecting. This data can be used to file end-of-year tax documents, track profits, prepare documents for clients, and automate annoying tasks.
In addition, proactive governance helps legal organizations better protect their client data. Ultimately, this will reduce the entity’s risk of being the victim of a cyber attack. The organization will be able to fulfill its responsibility of preserving client confidentiality and avoid any compliance-related fines.
Protecting client data is also beneficial for the organization itself. Structuring data through proactive governance can preserve the organization’s reputation and protect business continuity.
When data is structured, organized, and usable, every department within the corporate structure will also benefit. Finance, HR, tax, and legal departments can easily access the critical information they need to fulfill their responsibilities within the organization.
These teams will be better able to collaborate as well, thereby making all of them more productive.
Rein in Your Corporate Structures with Entity Management Software
It is virtually impossible to leverage proactive governance without first implementing a cloud-based entity management software solution like Athennian’s.
Athennian provides the premier entity management technology for law firms and in-house legal teams. Our solution can structure data, facilitate workflow automation, send reminders for annual filings, create tax charts, and improve every facet of entity management.
Do you need to organize your unstructured data and bolster your corporate structure via an entity management solution? If so, request a customized demo with a legal entity management expert today.