A recent study by Ernst and Young in 2021 showed that bigger companies with more complex structures tend to use purpose-built systems seeking to address the specific needs and requirements of their organizations. Below are some more facts on the emergence and limitations of one-size solutions and the benefits of modern purpose-built entity management software.
The Emergence of One-Size-Fit-All Legal Software
Many existing legacy solutions were developed in the 90s and 2000s as on-premise technology based on the workflows and processes existing at the time of their development. Later, this software received new versions, which still were built on the same principles, predetermining future limitations.
As organizations were adding new workflows and requirements, the developers had to provide new functions and options, adding them reactively in response to requests. Such disorganized development led to creating multiple software modules that often did not speak to each other and led to data disintegration.
This packaged software has often been advertised as fitting virtually any organization due to its extensive range of features. However, in practice, many of these features didn't work or were too complex to use and were ignored by users.
These solutions have been promoted as providing cost benefits over in-house built software prevailing in the 80s and 90s. In reality, one-size legal technology came with serious set-up, maintenance and customization fees which negated the cost-benefit in the long run.
The Limitations of One-Size Applications
In practice, companies that opted for one-size systems found them to be too complex due to their ad hoc development. This complexity resulted in too much "clicking around" to interact with the system or find the required information.
There were other consequences of this complexity too. Since the customization of all-around software was rather complicated, organizations had to adapt their workflows and processes to fit them to the software, which was quite the opposite of initial expectations.
Meanwhile, these technologies required significant investments for corporations who chose them for their entity management. As a result, corporate paralegals and in-house teams had to live with the technology made available to them by their organizations without having better opportunities for more efficient work.
The Outcomes of Making Wrong Choices with Legal Technology
When companies choose legal technology, they expect it to become a single source of truth for their organization. However, when the technology doesn't fit the purpose, this objective is rarely achieved.
When software doesn't have an intuitive interface, is overloaded with ineffective features or is too complex to use, shareholders, directors and lawyers find it difficult to interact with the system. Instead of personally accessing the data and receiving necessary reports, they delegate the tasks to corporate paralegals, accounting or tax departments,
Meanwhile, corporate paralegals often complain that their entity management system is not user-friendly and is so complex that it takes the developer's skills to work with it. When the legal team cannot have the system working, they have to file a support ticket which can take days, weeks and even months to solve.
Sometimes, some basic functions within the software can be so complex or difficult to implement that no one in the organization actually uses them. This complexity makes legal teams create parallel processes to provide for the governance and ensure compliance.
At the same time, having a parallel workflow undermines the purpose of the entity management software, creating silos and disintegration. The other consequences of running parallel processes to circumvent the limitations of ineffective all-around software are duplicative work, human error, and inefficiencies.
The Benefits of Modern Purpose-Built Solutions
Instead, working in a specialized entity management software, like Athennian, presents legal teams and all other actors, including shareholders, the board and external parties, with easy and simple ways to fulfill all required functions. When the software has an intuitive and simple interface, lawyers and senior managers can work with the system and retrieve necessary information without emailing or requesting paralegals for the same. Only when these conditions are met and all data are updated in real-time, can the entity management software work as a single source of truth without duplicate workflows.
The prerequisite for this is a holistic design built around the entity management processes as they are conducted today. When the system is purpose-built for entity management, it accounts for the diversity of business and tax structures, governance and compliance requirements and includes easy customization options to address any new workflow.
The simplicity of the interface and interaction is enabled by keeping legal processes and paralegals in mind while offering a rich toolset to streamline legal work. Meanwhile, purpose-built entity management software like Athennian allows full integration with other services like Google Drive or data management systems, such as iManage, employed by legal teams. Such integration allows moving files between Athennian and other depositories to send them for approval at the click of a button.
Unlike all-around complex software with overcomplicated modules, the Athennian entity management system provides simple yet rich functionality for effective presentations and org charting, essential for M&A deals and working with investors and partners. Having a birds-eye view of the ownership connections, historical relationships and all information about chosen entities in visual format speeds decision-making, improves visibility and allows to have a better offer in a transaction.
Learn More About Athennian
Since corporate governance and compliance are a priority on the radar of most businesses and legal professionals, many organizations are turning to purpose-built entity management software to transcend the limitations of one-size-fits-all legacy systems. If you are interested in learning more about opportunities provided by modern legal technology, please don't hesitate to contact Athennian today to request a customized demo with a legal entity management expert,