Two Step's Private Company Equity Management Blog

I recently read an article in Mass High Tech magazine called, "From Know-How to Know-Who." It posed the question of whether knowledge management (KM) is really about the knowledge that resides in a document or file - or if it's more about the knowledge had by the people within an organization who are familiar with a specific matter or transaction.

The article then goes on to consider why so many organizations have not yet implemented knowledge management systems. It cites the opinion of Tom Shoemaker, a Vice President at Parametric Technology Corp., who contends that the main reason a company doesn't have a KM system in place is because it talked itself out of one. Shoemaker says, "I would suggest that sometimes companies have sized themselves out of the market. They may have said, 'We are a small business and the amount of files we are creating doesn't really lend itself to needing some sort of management system.'" But, he insists, "There is no reason not to have knowledge management in place, no matter your size."

The Mass High Tech piece also quotes Brian Hill, a senior analyst with Forrester Research, Inc., who agrees that size shouldn't matter when it comes to knowledge management: "Most organizations should have a system in place, not only to mitigate legal risk ... but most importantly, to capture real business benefit." Hill says that if more information can be made available at a moment's notice to an employee, the better the chance that a truly informed decision can be made, or even a serendipitous connection discovered.

A similar point is made by one of our Corporate Focus customers, Christopher Howard, head of the business practice group at Pierce Atwood, LLP, when he talks about the "art of practicing good corporate hygiene." He says, "I call it 'corporate hygiene' because it's like brushing your teeth or having an annual physical. The reason you keep corporate records to begin with is that every entity is going to need to access them at some point. At the end of the day, if you accept the responsibility of keeping client records, then why wouldn't you keep them in the best, most efficient manner possible? It's a function of good corporate hygiene and it's a function of risk management."

Howard explains that the compelling benefits are not just for the firm, but extend to the firm's clients as well: "It's worked out really well for a number of our clients who have direct, self-service access to the information on a read-only basis. The return to them is it increases their internal productivity and gives them a sense of confidence that they have record-keeping under control. For our clients, ultimately, their costs are lower and the efficiency with which they can close transactions is higher. A) They get it done, which is most important. B) They get it done less expensively. That's real value."

In the end, I've drawn my own conclusion: it doesn't really matter whether knowledge is based on documents and information or the people who understand the documents and information. The key is making this knowledge readily available to those who need it, when they need it. Regardless of its size, a business and its clients can draw significant benefits from a centralized, online knowledge management system - not the least of which are greater productivity, better decision-making, and improved risk management.

Imagine having a single source for fast, accurate answers to your entity management, ownership administration, and corporate compliance questions, 24/7. Then take a look at Corporate Focus to learn more about this and other benefits an entity life-cycle knowledge management system could bring to your organization.

Remember that recent GE Medical Records TV advertisement in which a doctor asks his patient, "I wonder if you've ever been checked for cortical spreading depression?" - and then the camera pans out to a team of doctors sitting in the audience, who start confidently shouting out details from the patient's medical history?

Imagine if you had a team like that which could readily supply the answers to all of your entity and ownership questions for every client you work with. When I saw that GE commercial, it made me immediately think of how some of Two Step's law firm customers are enhancing their level of service by utilizing electronic entity and ownership records. Click here to see the GE video.

Perhaps you're on the phone with a client and you need to know whether the company is a Delaware or a Massachusetts corporation. An attorney suddenly yells out: "They're a Delaware S-corp. filed on March 10th, 2007!" Or, if you've ever filed the amendment to the charter to increase the authorized common stock for the growing stock option plan. Imagine a paralegal shouting: "Yes! We increased the common stock pool from 400,000 to 1 million shares on June 2nd, 2008!"

Maybe you're dealing with a complex calculation, such as how many shares are held by a key employee who the company is considering terminating. A young associate does the math in a split second and yells out: "He currently holds 376,286 shares of common stock on an as-converted basis, including shares that have not yet vested, which represents 3.78% of the company on a fully-diluted basis!"

Apply the same scenario to any number of common questions that you're faced with each day, and think about how much more productive you could be. Wouldn't it be great if there was a team of lawyers and paralegals who scurried around looking for the answers you need to satisfy your clients' inquiries or prepare that critical document - and those answers were fast, accurate and free?

Well, that's the reality of electronic entity and ownership records. With Corporate Focus, leading law firms of every size are practicing client-focused legal service and delivering it in ways that increase their bottom line.

For example, Christopher Howard at Pierce Atwood, LLP loves how Corporate Focus allows Pierce Atwood attorneys to access important client information at a moment's notice. As he explains in this user story: "I think the power of Corporate Focus emerges when you're at a critical juncture and you have access to all your corporate records in one place—rather than having to pull out a series of paper records or spreadsheets. The productivity piece really becomes clear when you don't have associates scrambling around trying to reconcile records or find what they need."

Just imagine a day when your clients' entity and ownership records are in one secure place, easily accessed by every attorney, paralegal and even selected clients. And the answers you seek are available to you instantly - much like the doctor in the GE commercial. You could provide your clients with significantly faster response time and lower their legal bills, all leading to increased satisfaction and more business for your firm. In other words, everybody wins.

The fact is that electronic entity and ownership records are already here, and the future of legal efficiency is now. Shouldn't you be a part of it? 

Watch an online demonstration of Corporate Focus if you'd like to learn more.

When Brenda Johnson was taping together the burned and tattered pages from a client's many minute books - after a fire destroyed the building that housed the client's business records - she thought, "Thank God this can't happen to our other clients." This is because her law firm, Bingham McHale, now has over 1,500 client minute books stored safely online in Corporate Focus.

For more than 10 years, this 140-lawyer, Indianapolis-based firm has been using Corporate Focus to centralize and standardize its corporate client records. As Brenda puts it, "It makes our attorneys more efficient and responsive to our clients, since from any one of our five offices, an attorney can pull up the minute book online right from their desk."

For Brenda and her fellow paralegals, Corporate Focus eliminates the need to have to first find the minute book - and then go through the tedious process of taking the document out, removing the staples, copying it, sending it to the client, re-stapling it, and putting it back in the minute book. Now, they can just open the document in their browser and send it to a client in a few clicks. Without a doubt, Bingham McHale's attorneys and support staff can work faster, smarter and more accurately as a result of having centralized their minute book records.

Some Bingham McHale clients have direct access to their minute book information and documents - and some do not - but they all understand the numerous advantages of using Corporate Focus. Recently, the firm sent out a letter to every client along with a copy of the Corporate Focus data sheet. The letter notified clients that their data had been centralized in the firm's system, and asked for any updates for the purpose of keeping the information current. Corporate Focus not only impresses clients with its productivity benefits; it also encourages them to take on the responsibility of advising their attorneys about any changes in their legal status.

In advance of her annual review at the firm, Brenda checked her statistics related to how much she had accomplished with Corporate Focus over the past year. She found, to her amazement, that she had entered almost 100 new companies, updated more than 400 companies, and scanned in more than 7,000 documents.

We at Two Step Software are equally impressed. That's why we've made Brenda Johnson one of our Corporate Focus Superstars.

Our friend Brenda is only one of the many Corporate Focus Superstars out there who are using this system to make their lives (and those of their clients) a little bit easier every day. Let us share your success story with others - and of course, we'll add you to the roster of Corporate Focus Superstars.

Great work, Brenda!

I'm often asked this question by lawyers interested in using Corporate Focus to improve equity management and corporate compliance tracking for their clients: When is the right time to start? Are we too early? Are we too late? Are we right on time?

To help answer these questions, I'd like to tell you about three very different law firms I met with just this past week.

The Small Firm: The first one is a sole practitioner who just left the largest law firm in the world a few months ago; he had used Corporate Focus for his client tracking for several years. This lawyer only has 5-10 clients to put in the system, but these clients represent the vast majority of his revenues. He wants to give them outstanding value for every dollar billed. And he knows that direct access to their data will impress them--and make them feel like they're still getting the same top-notch service they enjoyed at the mega-firm where he previously worked.

The Big Firm: The second is the largest law firm in one Northeastern state where they have over 1,000 corporate minute books they've been tracking for their clients for years. This firm would love to be more efficient when they do their client work--and they'd like to provide clients with direct access to their information. However, with so many minute books (and about 5-10 people that would be forced to change the way they track their clients' data), the project seems a bit overwhelming. They're not quite sure how to get started. They had looked at getting Corporate Focus a few years ago, but decided to postpone it until a "better time" rolled around. At the same time, this prestigious firm wouldn't like their clients to know that their paralegal goes through a mad scramble to calculate ownership information and even to locate minute book documents.

The Medium Firm: The third firm has about 50 attorneys, is the leading business law firm in an exciting region of the West coast, and tracks about 200 client minute books. One of the paralegals present at my meeting was working on a closing recently and the paralegal on the other side of the table asked her colleague how she printed the 45 stock certificates. After hearing the groan from the first paralegal, the other recommended Corporate Focus and said she can print 45 stock certificates in less than 15 minutes without any errors. The first paralegal brightened instantly and she got approval to get started with Corporate Focus in the next few weeks.

Should You Standardize Now?

Imagine if you were an attorney at any one of these law firms. Do you think you should get Corporate Focus now--or later? What if you were a paralegal working for one of these firms? Or a client?

I frequently talk with lawyers who clearly see the value of Corporate Focus for their work and their clients, but they're just not sure if it's the "right time" to get it up and running. There's no question that moving to a consolidated online system for equity management and corporate compliance tracking will change the way you currently work. But change is often a good thing. Efficiency is critical when you are providing high-value services at high billing rates--and you don't want to waste any time on low-value work.

Take a look at the real-life examples above. Maybe they will help you decide if it makes sense for your firm to use a streamlined, centralized online system to better manage your clients' critical information.

If you're still not sure, ask yourself the question:

What would our clients and staff want us to do?

Over the past 15 years, we've helped hundreds of law firms make the move to a more efficient, accurate and collaborative way of working. We'd love to help yours get there, too.

How Corporate Focus Can Make Your Life Easier: Check out this list of 10 key problems that are quickly solved by Corporate Focus:

http://www.twostep.com/CFsolveproblems

Over the past 30 days, I came across four articles that made me sense a shift in the air regarding online access to legal client data. Collectively, these pieces focused on a trend that’s sweeping the corporate landscape: Realizing the tremendous productivity and client service benefits—and the fact that email, laced with inefficiency and security issues, simply isn’t cutting it anymore—lawyers are finally getting comfortable with the idea of their confidential client data being stored somewhere outside the four walls of the firm.

Fortunately, it seems that this comfort level is starting to jive with available technology—and the small current is becoming a wave.

At Two Step Software, where we track online minute book information for over 150,000 client companies, virtually all of our new law firm customers over the past few years have stored their client data at our hosting facility. Why? Because our hosted solution offers better performance, greater security (i.e., biometric checks, 24/7 surveillance, and diesel generators for power outages), and vastly reduced support costs (no upgrades, no in-house servers). The hackneyed phrase "better, faster, cheaper" comes to mind.

As discussed in these articles, the objections of yesteryear regarding online client data no longer carry the day. Imagine when all of your client information is online and available to you and your clients 24/7—whether you're in the office, at a board meeting, or on a"so-called" vacation.

In March, a law firm blog posted the question What about an online minute book? The writer’s comments were:

"Don’t you think it would be nice if you could do corporation minutes online? And keep them in an online minute book? Instead of keeping them in a 3-ring notebook? Well, I do. I dream of it. Minutes in the cloud. I’d type them up, hit the upload button, and watch them magically appear, organized in chronological order, right there on the web page. The online minute book web page. It would have to be secure, of course. Only those with permission could see them. But they’d be there all the time. Whenever you needed to review them, you’d just click and down they would come from the Internet cloud onto your computer screen. Like rain. Minutes would come from the cloud like rain. Ahh. That would be nice."

Later that month, the International Legal Technology Association (ILTA) published their March 2009 White Paper issue, which included an article I wrote entitled: Client Intelligence: Answering the Call for Greater Productivity. It discusses the numerous productivity benefits—for both lawyers and their clients—of a centralized information repository for client information and documents.

A week later, Brett Burney wrote the article "Storing Your Firm's Data in the Cloud" in the Legal Technology section of Law.com. In it, he acknowledges lawyers’ past reluctance to store client data outside of the firm, while stating that today's online storage usually involves "a server-class machine, probably in an ultra-safe bunker." Burney notes the common acceptance of "deal room" data centers such as those offered by Intralinks, DataSite or Firmex, which have proven their superior security compared to traditional conference rooms.

A few days later, in the blog Compliance Building, Doug Cornelius wrote a post entitled "Extranets for Law Firm and Client Collaboration - Moving Beyond Email" where he discusses some of the challenges of deciding on the right extranet platform. Cornelius made the point that email no longer counts as "collaboration" in the Sharepoint, Web 2.0 world.

These are just a sampling of the growing number of articles that are discussing the topic of moving client data “to the cloud.” Where does your firm stand on the issue? If you're not doing it yet, maybe it's time to explore the brave new world—and the big benefits—of online client data ... one cap table, one minute book, one client at a time.