The boss just called - the Board needs an overview of the group structure from holding company down to local entity, and they need it by the morning’s AGM. It’s down to you, dear put-upon paralegal, to get it sorted and make sure it’s completely accurate. The future of the business’s growth depends on you.
A bit much? Maybe, but this could easily happen (though we’d hope you got more notice than that!). Business decision-makers rely on entity diagramming to get an overview of the whole business structure, one of those at-a-glance tools that can help them to identify new opportunities for growth and even places for consolidation and rationalization.
The humble entity diagram may seem simple on the surface, but it can fuel a whole host of business-critical actions and operations, which is why those in paralegal operations - whether compliance, governance or risk management - need to understand what entity diagramming is, and how it can help them to become more efficient, streamlined and accurate in their work.
After all, the more efficient and supportive the paralegal operations team is, the more time they’ll have to showcase strategic thinking and prove their value to the business.
What do we mean by “entity diagramming”?
Entity diagramming, also known as organizational charting or entity relationship diagramming, is a visualization of a company’s structure.
In general terms, that organizational chart covers the internal dynamics, detailing the roles, responsibilities and relationships between individuals within an entity or a department - you were probably handed one last time you started in a new job to show you how things fit and what your place is in it all. There’s some really interesting examples in this article by Buffer.
However, in the world of entity management, of governance and compliance, we use the term “organizational chart” to mean a diagram of relationships between the various entities within a wider group structure. It is, quite literally, a process of diagramming entities.
Entity diagramming brings to life all of the interdepencies and shared resources of the entities that make up a wider group, whether that group is a single company or many, and whether the entities are live and operational in only one jurisdiction or many. It’s especially useful to view the geographic spread of entities, or to discover any forgotten dormant entities that might be taking precious resources away from those that need to grow.
Why legal operations need to know how to create organizational charts and entity diagrams
Just as a management organizational chart helps to clarify structure and increase operating efficiency, entity diagramming is useful for those responsible for paralegal operations to understand how the entire business operates and interlinks.
For example, entity diagramming can:
- Highlight any potential compliance clashes, such as shared directors in jurisdictions where that’s against regulation
- Bring to attention any dormant entity that has slipped through the cracks but may still be subject to regulatory reporting
- Show gaps in markets or geographies to enable growth decisions to be taken
- Help to plan a program of entity rationalization to save money or slim down operations
But organizational charts can be a pain to create manually, and doing so runs the risk of introducing human error - that an entity will be missed, or a director not updated, or any number of issues that could cause an entity and structure to suffer fines, sanctions or reputational damage.
Creating entity diagrams using technology such as an entity management system can ensure all relevant information is pulled into the diagram and is accessible from the visualization when on-screen - the paralegal can drill down into the relevant parts of the corporate record and interrogate entity data to get the full picture.
Technology also makes the process much more efficient and streamlined, freeing up the paralegal team to focus on other, more strategic parts of their role. It’s the difference between laboring over a spreadsheet or charting package, or pressing a button in an entity management system and creating the whole entity diagram automatically.
Easing the burden of paralegal reporting
Entity diagramming is just one of the many tasks that fall under the remit of the paraprofessional. Today’s paralegals and legal operations staff have so many responsibilities that it can be hard to keep up. It can help to work with a single platform that integrates with all the other processes and systems in use - and not spend time switching between different systems to complete different tasks. It’s a matter of consolidating to drive efficiencies.
Intuitive, easy to use and easy to navigate, the Athennian legal entity management platform has been, and will continue to be, developed in collaboration with its users - people just like you, with similar challenges to solve. Its reporting functionality covers both standard and customer reports as well as comprehensive organizational charts to enable entity diagramming across multiple jurisdictions.
Discover how we can help you be more efficient and take back control over compliance; book a demo to see how the Athennian entity compliance calendar can get our entity operations fit for the new year.
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.