Entity Management

Using Entity Management To Recession-Proof Your Business

May 18, 2025

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Athennian

Articles

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With interest rates climbing and inflation all-time high,  economies are hovering around a recession. Although, according to the optimistic forecasts, it can be 'mild,' one thing is clear: the economy is on the downturn. So one of the main questions organizations are facing today is how to recession-proof their businesses and stay afloat during economic hardships.

Some of the most popular business strategies for recession have been to cut expenses and streamline operations. Sometimes, these approaches are mutually exclusive because optimizing workflows requires new technologies and investing in new processes. Here are more considerations to keep in mind when choosing your priorities during a recession and why law firms and in-house legal teams need new tools during the recession as never before.

In a Recession There Could Be More Work For Less Reward

In an economic slowdown, one of the most common consequences is that there are less paying customers. Businesses may have to put more value into their offer to stay ahead of the competition and work more for their existing clients. In a recession, one thing that almost always true is that everyone has to work harder than ever before to stay afloat, sometimes for the same or less reward.

For legal teams, there could be more work too. As organizations optimize their structures, they may dissolve some of their legal entities, change their tax or business structures or open new ones in other jurisdictions. There can be more work related to the removal or appointment of shareholders and directors or shareholder reporting. 

Recession is No Excuse for Non-Compliance

Lowering the standards for compliance is never an option and especially so during a recession. With harsher penalties for late filings and failure to meet reporting obligations, businesses have to keep a close eye on the maintenance of their legal entities and compliance work.

As regulators like FinCEN set short deadlines for reporting obligations, companies have to embed compliance into their processes in the early stages. With almost 90% of organizations expressing concern about their entity management, law firms and in-house legal teams have to put more effort into corporate compliance to avoid adverse regulatory action and fines that can be especially devastating during an economic slowdown. 

Recession Is a Perfect Time to Adopt More Productive Practices

While some businesses may choose to freeze their activities during the slowdown, many organizations can take advantage of the recession and develop stronger operations. In fact, recession calls for revisiting and reevaluating the workflows and processes, cutting off inefficient ones and making the whole organization most productive.

In a recession, organizations cannot allow inefficiencies, duplicative work or omissions. If they have concerns about their entity management or antiquated legal tools, these issues tend to multiply during economic hardships. In a recession, organizations more than ever before need better visibility into their corporate structure, data integrity and strong governance to drive continuous improvement and stay afloat.

When a recession hits, and there is overall less work to do, it is a perfect time for migrating to modern and effective legal technology to create a more productive environment. There is no better moment to revisit old inefficient workflows, tighten the nuts and bolts in the organization and replace obsolete tools with modern entity management technology than during the period of a slowdown.

Recession-Proof Your Business with Athennian

Recession or not, organizations need modern entity software to stay compliant, be on the pulse with clients and competitors and effectively manage the ever-growing number of legal entities. During the time of economic slowdown, those businesses that streamline their workflows and make better managerial decisions through better visibility into their data gain a competitive edge over competitors and can deliver better value to their clients.

Those organizations that take economic change not as a threat but as an opportunity can emerge stronger after the recession by implementing effective legal technology and migrating to modern entity management software. If you are interested in learning more about how to recession-proof your business with legal technology, please don't hesitate to contact the Athennian team for a customized demo with an expert.

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