This year has proven to be a very bad one for three-ring binders and spreadsheets. The shift to remote work and a number of other factors have added to the legal team’s burden, and many are watching their workflows unravel.
Consider simple access to the corporate record. Many teams discovered in mid-March that, deprived of access to the office and their filing cabinets, certain questions couldn’t be answered. Otherwise active and responsive legal and business teams were forced to sit and stew.
As we explore in our new infographic, below, a cascade of evidence suggests that paper records and spreadsheets cannot cut it in today’s digitized world.
The Pandemic Didn’t Create These Problems
Legal teams are growing more important than ever. As the costs of compliance, governance, cybersecurity, and cross-border trade rise, organizations are finding it is crucial that someone with a birds-eye view is managing the change. But unlike other business units such as sales and operations, the tools legal teams use haven’t kept pace.
For instance, paper-bound files and backup tape decks were once cutting edge, but so reliant upon geography that they no longer make sense. When an auditor or regulator sets up shop and asks to review the paper trail, the auditor could be in Singapore, the firm’s representative in New York, and the files in Brussels.
It’s not a dissimilar story with spreadsheets. According to Diligent research, companies of $100-500M in revenue have, on average, hundreds of spreadsheets to manage information like signing authority and intercompany agreements. While it’s a valiant first step, this approach has not fared well in 2020:
- No audit trail: Once data in a spreadsheet is altered, the prior data is gone.
- No permissions: Someone with a spreadsheet can either edit it or not. There is no middle ground.
- No security: Many spreadsheets exceed the 25MB file send limit of most email providers and thus must be shared via file-sharing services. Often, these services are not secure against attackers.
- Multiverse hazard: If a document is downloaded several times, and each owner makes edits, you suddenly have multiple “universes” of information that are not easily reconciled.
- No intelligence: Without someone actively monitoring the information in the spreadsheet and cross-referencing it with governance and compliance requirements, it’s easy for it to fall out of date, and companies to fall out of compliance.
When the risk of cyber breach is up 350% since the pandemic and the cost of non-compliance up 45%, spreadsheets are not only unhelpful—they encumber the firm’s response.
As if this were not enough, the rate of change is accelerating. Spreadsheets are creaking and groaning. This year marks a six-year leap forward in digital transformation and communication, reports the messaging service Twilio. Audit committee oversight continues to expand, finds EY, and there was a 69% drop in M&A activity in the first half of 2020, according to White & Case.
There is no simple story to tell from it all except that it spells a certain sort of chaos for the legal teams upon which companies increasingly depend. In our infographic, we explore how they are fighting back.
