Challenges and best practices of managing client UCC portfolios
ComplianceFebruary 04, 2021

Challenges and best practices of managing client UCC portfolios

Law firms are often required by their clients to maintain or update over extended periods of time the UCC filings used to perfect their clients’ security interests after closing large financing deals.

Why? Deals are often large and complex and involve millions of dollars in assets spread across multiple borrowers’ names and filing jurisdictions.

For a client to manage these portfolios on their own is risky. Many of the firm’s clients are not banks or traditional lenders, so managing a portfolio of UCC liens is not within their wheelhouse. Not equipped with the right expertise or tools, they rely heavily on outside counsel for help.

After all, if a filing were to inadvertently lapse, or if a mistake were to be introduced when continuing or amending a UCC original financing statement, millions, potentially billions, of security interest could be put at risk.
Careful processes and helpful tools are needed to navigate the risk and liability involved in helping clients manage their UCCs over time.

In this article, we explore the intricacies of UCC portfolio management and outline best practices for law firms tasked with this challenging process.

What does UCC portfolio management entail?

There are several important tasks that comprise UCC management after the filing of the original financing statement.

Expiration tracking and continuation of interest

UCCs have a finite period of effectiveness and must be tracked and continued prior to expiring in order to maintain perfection of the security interest. While relatively uniform, these effective periods can vary depending upon the type of asset and the filing jurisdiction.

Successful management of the UCCs is contingent on your law firm informing your client when UCCs are approaching their expiration date. This may entail follow-up steps to ensure the client is aware of the import. The client may request that your firm file UCC-3 continuations on their behalf to extend the liens’ effectiveness. In this process, you may need to file other UCC-3s to amend, assign, or terminate filings based on your client’s needs. After all of this, any continued UCCs will need to be managed through their new effectiveness period.

New financing, loan restructuring, or refinancing

If a deal is revisited due to new financing or restructuring of the existing financing, then the new UCC original financing statements will need to be filed and pre-existing UCCs will likely need to be amended, terminated, or assigned.

However, the public record may have changed since the original deal. In this scenario, your law firm must determine if there are new, conflicting UCC liens on record that may need to be cleaned up.

You must also find out if there have been any changes or amendments to previously filed UCCs that may affect the legal content of any amendments you need to file for this transaction.

Throughout each of these tasks, effective collaboration and communication must be maintained between paralegals, attorneys, partners, and end-client stakeholders.

Challenges managing client UCC portfolios

Law firms encounter several challenges when managing their client UCC portfolios.

Risk mitigation

Managing the UCC workflow is a time-intensive process that requires close attention to detail. This is a primary concern since UCCs can secure large amounts of money in assets.

Any mistake in the process (such as losing sight of expiration dates) can have significant ramifications. If the lien lapses inadvertently, the secure party loses their priority claim and the ability to reclaim losses in bankruptcy or loan default — costing potentially billions of dollars. Given this, managing UCCs requires a process that mitigates risk over time.


For portfolios of any size, managing UCCs can be challenging and labor intensive. This process is exacerbated by the limitations of current workflow tools. Law firms must get involved each time any of these scenarios is triggered:

  • When a deal is refinanced or restructured
  • Amended if the debtor, secured party, or the assets pledged change
  • Assigned if the liens are turned over to a new secured party
  • Terminated if the lien is being satisfied as part of a refinance or a new financial transaction

If the UCC is extended by filing a continuation statement, your firm will need to continue to assist the client with the UCC(s) over the next effective period.

Decentralized records and processes

It can be hard to maintain an accurate, holistic view of each UCC filing. This inhibits your firms’ ability to assess the overall health of the lien portfolio and take corrective action if needed.

Often each client is managed by various partners and each deal is worked on by multiple associates, attorneys, and paralegals. Tracking all these liens is typically done manually using a Word or Excel chart and Outlook calendar reminders — an inefficient and error-prone process.

Visibility and follow-up for varying stakeholders

It can be difficult for your firm to know how UCCs are being managed for a given client or deal, let alone who is managing the process over the years since the original UCCs were filed. Plus, it may not be apparent to paralegals who they are supposed to alert when UCCs are due to expire.

Furthermore, stakeholders who are not UCC experts, may not understand the implications or may not be immediately responsive, so consistent follow-up alerts to partners and clients are a challenge in itself.

Turnover and personnel changes

UCCs are typically effective for a five-year period. This can further complicate the management of client UCC portfolios.

Consider the amount of staff turnover during this time and the potential nightmare scenario where a paralegal who manages UCCs in their Outlook calendar then leaves the firm. Merely having a management process in place may not be sufficient to overcome these challenges. After all, what is clear today may not be clear four or five years down the line.


Managing a UCC portfolio involves a significant amount of data entry. Information — such as calendar alerts, email alerts for stakeholders, UCC filing extensions, and filing amendments — must also be rekeyed multiple times. Each time this happens, the risk of errors is introduced.

Best practices for maintaining UCC portfolios

Given the complexities and potential for error in maintaining client UCC portfolios, here are some best practices that your law firm should consider.

Equip your client and set expectations

Whenever possible, equip your clients to manage UCCs themselves. Systems, such as the UCC Hub or iLien, can help lenders with UCC portfolio management. iLien integrates with CT’s UCC Hub which is specifically designed to help law firms with their UCC filings. Any filings created in UCC Hub can be pushed automatically to iLien. From there, the client can take care of the ongoing UCC management.

If your client still pushes your firm to handle their UCC portfolio, be sure to set expectations around what you are and what you aren’t liable for and include these specifics in your closing agreements. Your firm may not want to directly assume liability, even if you’re assisting the client with other tasks.

Implement uniform processes with oversight

If your firm does assume UCC portfolio management for its clients, it’s important to dedicate a team of UCC experts to the process. Augment these resources with a centralized system of record that provides visibility across all your locations.

Automate alerts to reach all stakeholders

Paralegals are rarely permanently logged into UCC software. This necessitates the need for automated alerts outside the system. When setting up alerts, designate the alert recipients by deal and include the option to notify associates, partners, and even the client directly. Be sure to update the email recipient group if the team changes.

Plan for change and be ready to share or shift UCC records

To accommodate employee turnover, your UCC management process should be straightforward with information access portable so that it’s easy to onboard new personnel and designate the new person assuming responsibility for the UCC records. Processes that are overly complex or cumbersome due to excessive customization can pose challenges for later adoption years down the road. Intuitive tools designed to simplify steps will help future-proof your UCC management against any challenges from staffing fluctuations.

Automate data retention

To reduce error and save time, take steps to eliminate rekeying and use data from the original financing statement. Taking simple steps to reduce the amount of redundant data entry across UCC-3 forms can maintain efficiency when the portfolio is limited in scope and there are sufficient resources to audit the forms for any inadvertent inaccuracies.

However, these steps often prove to be resource inefficient when managing UCC portfolios. There are several digital solutions, such as CT’s UCC Hub, and services that can reduce the steps to rekey information. These solutions often automate the manual rekey steps, thereby reducing risk involved with data re-entry and speed the time to serve clients.


Law firms face a series of risk and process challenges when managing UCCs for their clients. These challenges can endanger the millions in perfected security interests for their clients, but by following a few essential best practices, your firm can avoid any obstacles to maintaining UCCs throughout the lifecycle of the liens.

UCC Hub offers unique benefits to law firms looking to manage UCCs from search and filing to ongoing UCC management. Learn more online or contact us today to set up a demo. 

Shawn Kastle
Associate Director, Product Management
Shawn Kastle, Associate Director of Product Management for Transactional Services at CT Corporation is responsible for developing and marketing due diligence related products and services, especially for law firms.
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