The truth about Service of Process and why it needs to be managed efficiently
Staying on top of your service of process (SOP) documents is easier said than done. With entities operating in multiple states, these important legal documents could easily get lost in the shuffle. That’s where your registered agent must go above and beyond on intake and delivery.
The question is how does your registered agent handle your service of process? Who receives them? How quickly do they get to you?
When your service of process lacks efficient procedure to route this critical information to you, your company is at risk. The outcome can be default judgment, a fine or a suspended license to operate, to name a few.
What is service of process?
Service of process commonly refers to the legal documents received by a registered agent on behalf of your company. This can come from a summons, a subpoena or a lawsuit initiated by another party against one of the entities. These legal matters can also originate from an employee-related matter, particularly wage garnishment.
Less discussed is the fact that service of process can also refer to written notification from a government agency of a compliance issue. Missed sales tax filings, a suspended business license, or some other violation are examples of entity compliance service of process matters.
Service of process can’t be missed
Service of process matters come with hard deadlines. Once your registered agent receives the legal document, the clock is ticking. With multiple entities your company could have any number of incoming and ongoing compliance issues and legal matters to track, monitor and update. Quick delivery of these documents is crucial. And it doesn’t hurt to have all these documents housed in one place for easy accessibility to delivered service of process documents.
What are the consequences of missed service of process?
In legal matters, your company can face a default judgment for things like missing a court hearing. Worse, missing a subpoena to testify or provide evidence can result in contempt of court penalties.
A missed notice from an entity’s secretary of state or a city licensing department also results in your entity being fined. But the more pressing matter is whether the compliance issue affects their ability to operate. If it’s serious and prevents the entity from operating legally, you need to act quickly. Fines can accumulate daily, which can add up quickly.
Negative publicity is another unwanted outcome you’ll want to consider when evaluating your service of process system. Given the speed information can travel these days, this can easily catch your company by surprise. Particularly when, say, a court ruling or license suspension hits the news cycle before the problem had a chance to surface at your company.
How to manage service of process efficiently
Having a flexible registered agent in place to receive subpoenas and government notifications is critical. But it’s equally important to establish a transparent process that streamlines access and delivery.
It starts with routing notifications to the appropriate departments custom to your company needs, whether it’s legal, operations or human resources. But effective management should also prevent this information from being siloed off, barring access to the most updated information. Quick and efficient delivery keeps time-sensitive and urgent matters from getting lost or overlooked.
Centralized onshore SOP review
Some traditional registered agents find it more expedient to contract with an overseas vendor to handle their service of process. But the delays and risks associated with the delivery of service of process documents from offshore vendors can quickly cancel out any pricing advantage.
Having a registered agent that processes your SOP at the domestic level ensures you’re getting the quickest delivery of your documents. Intake is always done at the state level, and delivery should be done electronically, saving you time you’ll need to prepare to respond to these documents.
Efficient security
Service of process documents contain highly sensitive and confidential information. It’s important that you can trust your registered agent provides the necessary data security, keeping this data safe and secure. Keeping confidential information within the U.S. eliminates opportunity for your sensitive data and documents to get into the wrong hands.
Your registered agent should also provide you the security of knowing you’re getting every SOP document. Although providing no legal consultations on your service of process matters, your registered agent should summarize the documents for you, providing data points such as who is suing you, when you need to appear in court, and where you must go for your court appearance. A strong entity management system also offers secure and protected document storage of these important documents for your reference as you move forward through the required processes.
Timely management of received documents
Ideally, your registered agent receives legal and compliance notifications through a variety of means — including electronically — and then creates summaries and keywords before uploading these into a single management system. A management system ensures real-time delivery creating a single source of truth for all SOP matters.
Flexible electronic routing and notification
Consider who has a line of sight on the service of process. Your registered agent needs to provide flexible processes routing notifications based on case type per your request or requirements. For example, wage garnishments can and should go directly to human resources. Flexible routing rules customized based on case type should be available from your registered agent ensuring the right teams are getting the right documents as quickly and efficiently as possible.
Single source of truth
Document storage of your service of process documents is critical. While these important documents are delivered to you electronically, you’ll still want to have a single source of truth storing your service of process documents. Your registered agent should provide a single password-accessible system giving permission-based employees access to SOP documents. With quick access to important documents all within a single system you can confidently manage any SOP documents that come your way and greatly reduce the risk of default judgments and compounding fines.