Why should companies consider legal managed services?

A corporation may adopt legal managed services to facilitate its compliance functions across different jurisdictions.  Legal managed services integrate customised legal technologies, process management and trained staff. They are particularly useful to corporations that operate in different jurisdictions, handle high-volume contractual relationships, and have to comply with rapidly changing legal and regulatory requirements.

The benefits of legal managed services include better cost control, data accuracy, effective allocation of manpower, data analytics, enhanced risk management and flexibility to enable companies to cope with today’s ever-changing regulatory landscape. EY is one of the global organisations that offer quality legal managed services. The following are examples of how those services are applied.

Entity compliance and governance

Compliance is a government mandated process imposed upon firms to ensure specific governance structures and appropriate business conduct. It covers a wide range of business and legal areas ranging from data protection rights, and periodic reporting to regulators on cross-border tax issues.

To cope with the challenges of ever-increasing operational, governance and reporting requirements, a corporation may adopt legal managed services to facilitate its compliance functions across different jurisdictions by taking the following steps:

(1)  Applying legal technologies to review documents relevant to the legal good standing and compliance status of all entities in the corporation;

(2)  Organising digitised versions of those documents in an online repository easily accessible to members of the transactions team;

(3)  Setting standards and timing for compliance in the system, so that statutory filings and compliance functions will no longer depend primarily on the judgement and diligence of the staff handling those functions; and

(4)  Putting in place measures to co-ordinate the compliance and other functions, and to ensure information is provided on a timely basis to be included in the corporate records.

Research and regulatory mapping

A variety of regulations, directives and law shapes a company’s everyday operations, both internally and externally. Many businesses operate in environments where regulatory changes occur frequently and any delay in comprehending and responding to these changes may lead to negative business consequences and serious risks.

Research and regulatory mapping should be part of a business’s compliance programme. Through introducing legal managed services, a corporation may meet its legal and regulatory obligations by:

a.        creating inventories of the voluminous and rapidly changing laws and regulations from applicable jurisdictions around the world;

b.        mapping and tracking updates in laws and regulations relevant to risks, policies, controls, procedures, training, tests, assessments and any other elements of its business;

c.        identifying gaps in internal policies and procedures that may require changes to ensure compliance;

d.        establishing a defensible regulatory change management process that tracks accountability for assigned tasks, establishes priorities, and determines the appropriate course of action; and

e.        putting in place ongoing reporting, testing and auditing to ensure accountability, compliance and continual improvement.

Key takeaway

Today, it is important for companies to make use of technologies, even for their legal functions (an area which was not technology-driven in the past), in order to handle high-volume contractual relationships and remain compliant with an ever‑changing regulatory landscape in a cost-efficient manner.