If you’re a paralegal or part of an in-house legal team within a global organization, you’ll know the pain of using on-premises systems for legal entity and corporate records management.
For example, factoring in time to manually print off contracts and documents that need to be sent to someone in an office in another part of the world to sign can feel like you’re still working in the early 2000s.
And time isn’t a luxury we always have. We now live in a fast-paced world where clients expect quick reactions and the ability to adapt at pace, which just isn’t possible when it can take at least a week to sign a document – and let’s face it, no client has ever uttered the words “take your time”.
Corporate records management doesn’t need to be this stressful. Yet for many legal teams, this is the reality of operating in 2020 – all the documentation that ultimately ensures they remain in good standing is all stored on on-premises systems.
Being able to access your corporate records remotely has never been more important, and more and more paralegals and in-house legal operations teams are championing the implementation of cloud-based corporate records management systems.
Not only do these systems increase efficiency, productivity and provide much needed business continuity assurance to your clients, they also help to avoids fines, reputational damage and in extreme cases, a custodial sentence for directors of the organization.
What is corporate records management?
Corporate records management is ultimately the process of managing information throughout its lifecycle from creation to disposal or destruction. It’s a legal requirement to store records correctly and helps to ensure that your organization remains compliant.
But compliance is more than just how you store your corporate records. Paralegals and in-house legal teams also need to ensure that they file reports on time and that the correct people sign the correct documents to ensure they remain in good standing.
To do this, corporate records need to be easily accessible at all times. Cloud-based systems means that your employees can access the records they need wherever they are in the world.
Why compliance has become a reputation game
Once upon a time, the word compliance had a habit of causing even the most conscientious employee to stifle a yawn. But since the dawn of social media, a failure to comply with regulation has led to very public stumbles from grace for many organizations. We expect more from our companies and social media (and the media at large) is unforgiving in its judgement of those organizations that fall short of our expectations.
Let’s take the General Data Protection Regulation (GDPR) as an example. It came into effect on 25 May 2018 and since then all organizations that deal with data subjects within Europe have had to have complete transparency about the type of data they store and collect, as well as be able to prove that they received permission to store and collect it in the first place.
The consequences of breaching the GDPR can be severe – fines of up to 4% of annual global revenue or 20 million Euros, whichever is greater.
Australian law firm Slater and Gordon were fined £80,000 after it was found that a British company they acquired was responsible for “disclosing un-redacted confidential information and documents from 7,087 client matter files to other firms, without the knowledge or consent of the relevant clients”.
Luckily for Slater Gordon, the data breach happened before the GDPR came into effect, although they still faced fines and saw their share price lose 90% of its value in the eight months following the acquisition.
But you could argue that it’s the reputational damage that will hurt the most. Reputation is everything; it can take years to build and minutes to erode. Failure to be compliant can lead to a lack of trust with existing clients questioning your internal processes and what else you might be getting wrong. And potential clients may decide to take their business elsewhere.
This can be difficult to recover from - not only do you need to acknowledge your mistakes and change the narrative around your business, you also need to commit to making real change and sticking to it. So, we would argue that it makes sense to take steps now to avoid this type of scenario happening in the first place.
The case for cloud-based corporate record management systems
The Slater and Gordon example underpins the importance of concrete corporate records management and how easily it can become an issue when you have a global organization, especially one that has grown through merger and acquisition.
Without a centralized cloud-based system for records management, you run the risk of data being collected in different ways, on different systems and using different processes that puts your organization at significant risk of a breach.
When you add in the fact that different jurisdictions have different regulations they need to comply with, things can become complicated. However, a cloud-based system makes it easy to track thousands of filing and compliance events across various entities and jurisdictions. This means you can apply consistent processes but still allow for nuance, depending on the jurisdiction of course.
It also provides remote access to information which enables better remote collaboration and ultimately increases efficiency and productivity. Plus, a modern cloud-based system offers additional functionality that provides peace of mind.
For example, you never need to worry about forgetting a deadline again as the system will not only remind you but also list all the tasks that need to be completed before the deadline. It also automates workflows and allows for electronic signatures, eliminating the need for documents to be sent in the post for signing.
It also ensures that information is being stored securely, helping to eliminate the risk of a costly data breach.
Creating simplicity and efficiency for legal professionals and IT teams
CLOC (the Corporate Legal Operations Consortium) recommends that information governance needs to be one of the 12 core functions of legal operations. This means having guidelines on how to share and retain information as well as the need to work across functions with IT, Finance, Information Security, etc to ensure a robust system and processes are put in place.
The need for cloud-based systems isn’t going away, and the decision to implement one has to be agreed among various teams to understand what’s needed and possible within their organization. It is a big decision, but surely leading the way and looking to the future is preferable to being the last legal team left using outdated systems, scrambling to play catch up?
For many paralegals and in-house legal teams, cloud-based systems are key to simplifying a complex job that involves running reports, monitoring compliance for multiple teams across multiple jurisdictions, and ensuring information is available to the right people at the right time. It allows a more proactive and structured approach to supporting the business – after all, without legal operations, organizations can start to fall apart.
It also creates a more efficient way of working for IT teams as it is far easier to support colleagues spread across multiple locations if they are all working from the same system, rather than a mix of platforms and tools that create unnecessary work to maintain and support.
However, it isn’t unusual for IT teams to have concerns around the security of cloud-based systems. Considering the type of information that’s being handled, this is completely understandable. However, when you weigh up the risk of a security breach on a modern system that meets all international security standards against the financial or regulatory cost of non-compliance due to human error, the latter presents a far bigger risk.
Athennian’s legal entity management system helps paralegals and in-house legal teams to comply with all regulations while supporting the organizations they work for in a far more efficient way. It also employs the most stringent security processes and protocols.
Book a demo now to discover how Athennian’s cloud-based entity management and legal operations software can help you to implement effective information governance in your organization.
Athennian.com is the top reviewed legal entity management cloud platform for law firms and in-house corporate teams. Athennian is used by innovative organizations that value modern software with elegant automation and workflows. Integrating entity data management, document assembly, eSign, org charts, and e-file, Athennian is selected by leading law firms and corporate legal and tax teams to scale legal entity governance. Athennian offers rapid migration services for customers from any legacy database including ALF, CorpLink, EnAct, GlobalAct, EnGlobe, FastCompany, Corporate Focus, Blueprint (Diligent Entities), GEMS, hCue, Effacts and more.