Internal social media sites — also called enterprise social networks — are becoming a routine part of corporate America. In fact, last year Deloitte predicted that by the end of 2013, more than 90 percent of Fortune 500 companies would have an enterprise social network — and those companies are getting a positive response from employees. For example, three years after Humana launched its internal social media site, 26,000 of its 40,000 employees were on it, with an average of 200 more joining each week.

These stats aren’t at all surprising when you consider the benefits.

On the business side, enterprise social networks streamline communication in project management; they help create and collect knowledge, which becomes easily searchable; they enhance innovation through this easily accessible repository of knowledge; and ultimately, they lead to better decision-making. Beyond the business advantages, enterprise social networks also serve to improve a company’s corporate culture by encouraging a dialog among employees and between employees and management, allowing them to build stronger relationships that reach beyond topics that are regularly discussed in business meetings and ultimately improve employee satisfaction and retention.

Of course, the easy connectivity, streamlined information sharing and informality that makes internal social networks such an effective tool also raises legal risks.

First, the fact that an internal social network looks more like Facebook than official company correspondence doesn’t change the fact that the information housed within the network is discoverable. Just as employers a decade ago admonished employees to remember that emails created a record, the same is true of posts on internal social media sites. This may be a particularly difficult message for employees who are used to posting on Facebook, Twitter and other external social media sites without much thought to how the post may later be interpreted.

Second, if information or work product of a group isn’t being shared with the rest of the company, it’s important that it not be inadvertently disclosed via the internal social media site. If such projects and information will be discussed on the site, it should only be in protected subgroups.

Third, the informal nature of social media and the mere act of encouraging employees to share their out-of-work personas raises the risk that employees will post information that others might view as offensive, or even harassing. It isn’t hard to envision a situation where an employee posts a cartoon she thinks is funny without really thinking about how others might interpret it, or shares an article or video without reading or watching it in full.

Say, for example, an employee shares an article about Donald Sterling’s recent racist comments without reading the article all the way through, and without realizing it was in defense of the Clippers’ owner. Some employees may feel the post was harassing, or even that the post contributed to a hostile work environment.

Despite the legal risks, for most companies, the benefits of enterprise social networks far outweigh the disadvantages. The key is effectively incorporating these tools into organizations by helping employees to understand the role the network plays in the workplace, how their use should differ from external networks like Facebook and Twitter, and other expectations for using the tool, all while honoring company culture.

There are several steps legal departments can take to help find the right balance:

  1. Educate employees on the purpose of the network and how it can and should be used. The concept of an internal social network may be new to many employees, so make sure that they understand why it’s being rolled out, how management hopes it will be used, and the fact that while the site is social, it’s still work, so company policies apply. Adding a disclaimer at the log-in prompt is a good way to remind employees that the company monitors the site and reserves the right to remove anything it deems inappropriate or to be in violation of one of its policies.
  2. Make sure the legal department and human resources are on the team overseeing the network. While the team that “owns” the site is often the one that decided to implement it, legal and HR are critical players in the site’s proper implementation. They should be actively involved in training and ongoing administration.
  3. Monitor. Because internal social networks are an extension of the workplace, it’s important for management to know what’s being posted, and to respond to any inappropriate posts. In addition to regularly reviewing sites, many employers have added technology to their review workflows with alerts. Such alerts may be based on any number of criteria, such as key words or timing of posts. Find the alert systems that make the most sense for your business and use them to stay in front of any potential problems.
  4. Don’t overreact. Chances are that employees will make posts that are critical of the company. Don’t overreact, as doing so may draw additional attention. Also take care not to take employment action (such as discipline or discharge) for posts that constitute protected activity.
  5. Take steps to preserve confidentiality, but don’t assume content will remain internal. Train employees on security protocols for the site, including the use of secure subgroups to prevent over-sharing of confidential information. Information on, and access to, internal social networks should also be referenced in confidentiality agreements and policies.
  6. Disconnect employees on termination. It should go without saying, but employees’ access to internal sites should be promptly discontinued on termination (unless the site has been set up to allow limited access to specific alumni sections).

Enterprise social networks are an exciting opportunity to improve communications and processes and allow employees to engage and connect on a personal level and—with HR and legal involvement and practical management that matches your business’ needs and culture — this new connectivity is an opportunity that inside counsel can truly embrace.