Why Legal Tech Still Isn’t Delivering — And What Teams Actually Need

Today’s legal teams have fully embraced technology in their everyday work. Entity management systems, compliance tools, workflow platforms and AI-powered solutions are now standard across in-house legal departments. The challenge of adoption has been solved.

And yet, satisfaction remains strikingly low.

According to the 2025 State of Entity Management Report, 84% of teams use technology to manage entities and governance work, but only 21% say they are satisfied with their tools. That gap tells a deeper story about why legal tech has struggled to deliver meaningful improvement, even as complexity, expectations and risk continue to rise.

The problem is not resistance to change. It is that most legal tech was not designed for the reality of modern governance work.

The modern governance burden legal teams carry

Legal teams today are operating in conditions that did not exist when many entity management tools were first built. Organizations are more global, structures are more layered, and governance work now touches nearly every part of the business.

The report shows that 67% of organizations manage entities across three or more regions, each with its own regulatory frameworks, filing requirements and reporting standards. At the same time, most legal teams responsible for this work remain lean. The majority consist of one to three people managing dozens, or even hundreds, of entities across jurisdictions.

Governance is no longer a contained legal function, and entity data is needed by tax, finance, compliance, treasury and M&A teams. It is relied on during audits, transactions and strategic planning. When that data is incomplete, outdated or hard to access, the impact is felt well beyond legal.

This is the environment legal tech is meant to support. Yet too often, it falls short.

Why current legal tech still misses the mark

Technology adoption has increased, but many of the underlying assumptions behind legal tools have not evolved at the same pace. Three structural issues continue to limit their effectiveness.

Legacy tools were built for static recordkeeping

Many entity management systems were designed to store records, not to support ongoing governance operations. They assume relatively stable structures, predictable workflows and limited cross-functional dependency.

That model breaks down in organizations where entities are created, restructured and repurposed frequently. Spreadsheets and legacy platforms may technically “work,” but they do not scale in step with the rising speed and complexity of the industry. They turn governance into an exercise in maintenance rather than an operational capability.

Entity data is still scattered and fragile

Even with systems in place, entity information often lives in too many locations. Some data sits in a platform. Some lives in shared drives. Some is held by outside counsel. Some exists only in email threads or personal spreadsheets.

This fragmentation creates uncertainty and rework. Teams spend time validating information instead of using it. The report found that 93% of global organizations view poor entity management as a serious litigation or veil-piercing risk. That risk is not theoretical. It is the direct result of governance data that cannot be trusted or accessed with confidence.

Legal tech rarely connects to the rest of the business

Governance work intersects with finance, tax planning, risk management and deal execution, yet many tools are built to serve legal in isolation. Limited integrations and disconnected workflows keep legal reactive, pulling information for others rather than operating as part of a shared system.

When legal tools do not connect with the broader business, governance becomes a bottleneck instead of an enabler.

What teams actually need today

The gap between adoption and satisfaction exists because legal teams need more than incremental improvements. They need a different operational foundation.

What teams are really asking for is not a longer feature list, but a way to manage governance work with confidence, speed and alignment. That starts with a few core needs, beginning with a single, trusted source of truth for entity data that is accessible to the right stakeholders across functions and regions. When data is centralized and reliable, decisions move faster and friction disappears.

Teams also need workflows that reflect how governance work actually happens today, not how it happened ten years ago. Legal, tax, finance and compliance must be able to work from the same information without duplicating effort or creating downstream risk.

They need automation that removes real work from their plates, not tools that add more reminders or manual clean-up. Automation should reduce dependency on external counsel for routine tasks and free internal teams to focus on higher-value work.

And they need AI that is purpose-built for governance, embedded directly into entity workflows, and focused on accuracy, usability and trust. AI should not be a novelty layered on top of broken processes. It should quietly eliminate friction where it matters most.

Governance operations as the evolution of entity management

Meeting these needs requires more than better tools. It requires a shift in how governance work is structured and supported.

Governance operations represents that shift. It is the evolution of traditional entity management into a connected operational model that aligns people, data, workflows and systems across the organization, integrating governance work directly into the tools and processes teams already rely on.

Rather than treating entity management as a compliance task to be completed, governance ops treats it as shared infrastructure. Entity data becomes a living operational asset, surfaced where work actually happens. Governance workflows connect legal with finance, tax and compliance by design. Visibility replaces guesswork.

This approach does not discard entity management. It builds on it, expanding its role to support enterprise-wide governance with clarity and consistency.

What becomes possible with a governance ops model

When governance operations are in place, the day-to-day experience of legal teams changes materially.

Teams spend less time searching for information and more time advising the business. Cross-functional partners trust the data they are working from, which reduces back-and-forth and accelerates decisions. Governance processes move faster without sacrificing accuracy or control.

Well-maintained entities and up-to-date records improve audit readiness and transaction execution, allowing for more efficient due diligence and earlier risk identification. No longer perceived as a bottleneck, legal becomes a proactive contributor to strategic outcomes.

Most importantly, governance work becomes sustainable. Lean teams can operate with confidence even as structures grow more complex.

A necessary path forward

Legal teams have shown they are willing to adopt technology. What they have not been given are systems that truly reflect the complexity and cross-functional nature of modern governance work.

The dissatisfaction highlighted in the 2025 State of Entity Management Report is not a failure of intent, but rather a signal that the operating model needs to evolve.

Governance Ops™ is the necessary next step. It aligns entity management with how organizations actually operate today and equips legal teams with the clarity, visibility and confidence they need to keep pace.

The future of legal tech is not about adding more tools. It is about building connected governance operations that finally deliver on the promise technology was meant to fulfill.

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