How to Choose an Entity Management System
With the immense benefits of entity management in mind, law firms and legal departments must still navigate the entity management system software market. There are tens of legal tech companies developing products that address elements of corporate entity management with specialized products. In addition, some larger platforms are starting to develop and roll out ‘bolt-on’ functionalities that address some elements of entity management.
With so many developed and developing products on the market, it’s important to select the right entity management solution for your legal team.
Those law firms and legal departments looking to access the four strategic drivers outlined earlier will select a specialized entity management solution. This is because these entity management technologies are developed for the specific purpose of streamlining registration, governance, tax, ownership, or compliance-related management tasks. More mature entity management solutions will be capable of centralizing and streamlining all these tasks, and the data associated with it, while reducing the risk that comes with managing significant volumes of confidential corporate information.
It’s the convenience, transparency, and risk mitigation that comes with the best-of-breed entity management solutions that allows legal disruptors to increase productivity and profitability.
Here’s how they choose their entity management system:
Step 1: Shortlist the Best-of-Breed Entity Management Systems.
Given the breadth of solutions that currently exist and are being developed, firms and legal departments should prioritize software that holistically improves entity management. Generally speaking, lawyers and paralegals will need to adopt best-of-breed entity management systems to access the full range of benefits.
To determine whether you are looking at a best-in-class solution, you should confirm that, at a minimum:
- The Entity Management System Streamlines & Simplifies Compliance and Reporting.
This may seem obvious, but it’s important that your entity management solution actually achieves what it has set out to do. It is important that your law firm or legal department carefully weighs up how well the software achieves this.
Ideally, your entity management system should have the functionality that will allow it to become a single source of truth for entity information and documents. It should also simplify (and ideally, automate) compliance tracking and deadlines across multiple jurisdictions.
As we outlined in the opening paragraphs of this paper, conversations about entity management are moving beyond compliance and to better entity management. Streamlined compliance and reporting is an important piece of the puzzle, but it is worthwhile looking for a more capable and advanced system.
- The Entity Management System Consolidates People, Processes, and Systems.
Mature entity management software providers are developing complementary features that make it easy for an organization’s people to improve internal processes and systems.
The Athennian platform, for instance, includes the following functionality:
- Manage corporate entities.
- Manage corporate compliance.
- Automated document generation.
- Automated workflows.
- Digital minute books.
- Bulk changes.
- Equity management and planning.
- Advanced reporting and analytics.
- Historical and current org charts and relationships visualizations.
- Integrated e-signing.
These essential features allow the people working in law firms and legal departments to leverage technology to improve productivity, accuracy, and timeliness.
"Athennian's software is revolutionizing business by replacing fragmented spreadsheets, old corporate record-keeping software, and minute bookbinders with a sophisticated system that consolidates ownership, governance, tax, compliance, and other elements of corporate identity into one simple, user-friendly platform." - Eric Byunn, co-founder and partner of Centana Growth Partners.
- The Entity Management System Implements Robust Security Measures.
Entity management software houses confidential and sensitive personal and corporate information. Keeping that information safe from malicious actors should be integral to the operations of any entity management software system your law firm or legal department collects. Encryption, access control, real-time threat detection, and routine audits should be seen as non-negotiable by law firms and legal departments. It’s worthwhile prioritizing vendors that achieve industry-leading certifications, such as the SOC 2 certification.
Law firms and legal departments should even view these robust security protections as an added cost-saving. Implementing superior data security measures is expensive. So, gaining access to these protections through an entity management software may be more cost-effective than trying to protect confidential corporate information in-house.
- The Entity Management System is Easy To Use.
Legal technologies are only effective if they’re adopted and used by the teams intended to use them. Any software that is not intuitive, unreliable, or ‘buggy’ is not likely to be adopted by the team, which will negatively impact its effectiveness (or eliminate it entirely). Therefore, ensuring that any entity management system selected is well designed and user-friendly is a key piece of the puzzle.
Law firms and legal departments must be sure to choose an entity management system with a modern interface and intuitive functionality. Lawyers should look for software that makes it easy to visualize workflows and eliminates (or at least significantly reduces) manual data entry.
Beyond simply automating elements of repetitive compliance-related tasks, entity management software should simplify and streamline the gathering of organizational data. Users should be able to view key information about officers and directors, such as the entities they’re related to, as well as entity capital structures and ownership.
Step 2: Create a Shortlist, Then Decide Based on Your ‘Nice-to-Haves’.
With the best-of-breed features outlined above forming your key non-negotiable criteria, law firms and legal departments should be able to generate a shortlist of potential entity management software providers. From there, it’s a matter of making a wishlist of additional features and considerations before selecting the entity management system that ticks the boxes for your lawyers.
Here are some common considerations for law firms and legal departments looking to select and entity management system:
Law Firms and Legal Departments Want an Entity Management Solution that Grows with Them
The process of selecting and implementing entity management software for your legal department or law firm is complex and time consuming. It’s essential that you choose a solution that is capable of and has the functionality to grow with you.
Practically, the software should be flexible in terms of the number of users it allows. It should also offer sufficient storage to meet your needs.
Law firms and legal departments should consider the pricing implications for the cost of upgrades to cater to additional users or growing storage requirements.
Flexibility and scalability is particularly important for those law firms that recognize the potential entity management software holds for subscription-based services. Subscription revenue is more valuable than transactional revenue, yet it’s significantly underutilized in the US market. To realize and scale entity-management-related subscription services, law firms require a flexible entity management solution that adapts to their needs.
Law Firms and Legal Departments are Demanding a Demonstrable ROI.
Ultimately, your in-house legal department’s roadmap and any solutions therein, are aimed at cutting costs and ensuring the productivity of your department. Many cloud-based entity management solutions provide cost and time savings which contribute to the return on investment (ROI), however, it’s important to see the social proof. Ask for and read any case studies that relate to your unique situation in order to ensure the vendor demonstrates the return on investment you expect.
Law Firms and Legal Departments Seek Vendors with Strong Support Teams
Vendor support means more than promptly answering client queries (though, that’s certainly an important element). It involves empowering and uplifting the legal teams using the software.
Law firms and legal departments should prioritize vendors that offer ancillary services that remove friction during and after implementation. Doing so will ensure the implementation of the software occurs as quickly and seamlessly as possible.
Athennian, for example, offers the following value-added support services:
- Training and technical support.
- Cost-effective data migration.
- Digitalization of paper records.
- Custom document automation.
- Paralegal services.
It can also be beneficial to consider which entity management systems welcome law firm and legal department feedback. Cloud-based legal technologies come with the potential for vendors to continually improve their product. With this level of service rapidly becoming the norm, legal teams shouldn’t settle for entity management solutions that are not being regularly updated.
Athennian’s cloud-based platform makes entity management more efficient by automating entity management workflows and building dynamic reports and self-serve digital experiences. Our fast and intuitive software provides a level of functionality and ease-of-use unrivaled in the entity management space. Discover streamlined corporate legal workflows, increased productivity, and streamlined compliance with Athennian.