Effective management of KM can create and maintain a competitive advantage, produce savings and plug the gaps in a firm’s expertise. Jody Raynsford reports.
The real value of any firm lies in its people. More accurately the value lies in the skills, expertise and experience of those people — the intellectual capital — they bring to bear within the firm.
Knowledge management (KM) is seen as the key to protecting the firm’s most valuable asset. Potentially there are great benefits. When harnessed effectively KM can create and maintain a competitive advantage, produce savings in time for lawyers and plug the gaps in expertise after losing staff.
In theory, the availability of an entire firm’s expertise, experience and knowledge, brought to focus on a specific issue in a few simple clicks is a powerful thing. In practice, the large amount of investment that has gone into trying to implement a KM solution that fulfils these goals has left a bad taste in many firms’ mouths. The promised return on investment (ROI) has not been delivered and productivity gains remain unrealised.
Outside the legal industry some firms have found huge success, but it is often misleading to make direct comparisons with the KM strategy of other business sectors. The framework in which other commercial organisations operate and their needs require something different from KM than a law firm.
“Law firms tend to focus first on KM as a way to improve service delivery to clients,” says Sally Gonzalez, senior consultant at Baker Robbins. “Since producing work product is central to service delivery, law firms have historically looked to KM to help them produce work product faster and more cost effectively, while maintaining assured quality levels. Other industries focus on very different goals.”
It may never have been possible for KM to live up to the early promise and expectations of those firms that have invested but have failed to realise the benefits. One reason might be that firms have not clearly defined their objectives and worked towards tangible, measured targets, which directly benefit fee earners.
“One of the key measures is identifying a specific objective, like looking to increase a particular fee rate by 10%, for example,” notes John Kay, a member of the management group at PA Consulting. “Objectives are not being defined in a sufficiently hard-nosed manner.”
Although the delivery of a specific target may concern some IT directors as the measure of success, Kay believes it is a good exercise. “Organisations that have taken this approach have had the most success. It is easier to find tangible objectives, and if firms set them, they will work. They become almost self-fulfilling objectives,” he says.
“Many firms hop on the KM bandwagon without thinking carefully enough about the specific business problem they need to solve within their own firm’s immediate situation,” Gonzalez says. “Making your first KM effort one to develop standard forms for an estates and trust practice will result in little business benefit unless estates and trust is a critical part of your firm’s business future.”
Reiterating a point many IT and knowledge directors have made, Gonzalez points out the flawed thinking of firms that look to ‘buy’ KM from a technology vendor.
“Two results are possible,” Gonzalez continues. “Doing nothing and continuously seeking a solution that does not exist. Or, worse yet, buying technology, installing it, doing little else, and wondering why the firm’s KM efforts fail.”
As well as failing to define objectives, equally problematic is measuring success. The difficulty in measuring the ROI on many IT projects also applies to KM.
Law firm Bird & Bird is monitoring the effectiveness of its KM project by investing 10% of resources in feedback, according to Andrew White, partner and director of The Solutions Lab at Bird & Bird. An individual is employed primarily to use surveys to find out how people use the systems and gauge responses.
“Firms should invest around 10% of their resources on feedback,” White says. “Both the process of taking feedback and acting on it. I think the average could be as low as below 1%, and in many cases it is not structured, not taken seriously.
“Waiting for an e-mail from a partner, for example, is waiting to hear about problems rather than going out and finding them.”
Spending resources on monitoring and gauging outcomes may not be an option for many firms. Relying on lawyers is usually not an option either.
“It creates a real pressure on law firms — if lawyers are not working then they are not generating their fees,” says the knowledge director of a major UK law firm. “The alternative would be to recruit additional people to do this, although a large number of people creating information who do not have legal experience, means the KM system losing its edge in addressing problems.”
The sheer task of pulling together the disparate information from the huge number of sources throughout a firm is a major undertaking. Even trickier, and the goal many firms have yet to achieve, is presenting that information from those sources in a useful way for fee earners. Understanding what is useful and leveraging information in a way that translates it into knowledge is the key to KM, focusing on the output rather than input.
Nor it is simply a case of making more information available to more people. KM requires data and information regularly used by lawyers to be classified in a particular way for use at a future time.
Taking advantage of the often informal nature of knowledge and relationships within a practice, firms look to develop ‘know-who’ as part of the KM strategy. In many cases, the connectivity and inter-relationships between experts, experienced lawyers and the junior fee earners is more important than the actual documents and information.
Phone calls and e-mail may be quicker and more effective ways of dealing with resolving an issue — learning from those that have done it before, rather than simply looking at the documents they produced.
“Instead of hours spent classifying work done on judgments and looking through annotated documents and written notes, it is usually a better idea to focus on the ‘who?’ — who to ask when a requirement in a particular area is needed by someone,” says David Robbins, independent legal IT consultant at Parnell.
“By providing a simple, effective breakdown of CVs and phone call or e-mail outline lawyers can interact on a personal level.”
Balance is needed when approaching a KM project. Like many projects in which IT systems form a part, the technological implementation invariably has to be accompanied with working on the ‘people’ aspect of the project — business process, best practice and working behaviour.
“The technology is pretty straightforward for KM,” Robbins adds. “The resources are available — web-based indexing, contextual searching are the bread and butter of KM.”
Bringing together the technical aspects may not be the major element in the implementation of a firm’s entire KM strategy. However, it does not mean major problems do not arise unexpectedly. Getting bogged down in a mire of the problems around connectivity, compatibility and consistency takes valuable time and effort away from the wider task of developing the ‘people’ side of KM.
The message from KM partners and IT directors having already faced a KM roll-out seems to be clear — keep it simple.
“The first thing we learned was to keep things simple,” says Phil Whitehead, IT director at Hugh James. “We had the databases and the systems in place, but it was bringing these together that proved to be the difficult part.
“Secondly we had to ensure the data was clean. By this I mean we reviewed all the information which was unnecessary or was not up to date, such as old expert witnesses or duplicates. We had to guarantee our knowledge was accurate and useful.”
One potential nightmare scenario is the proliferation of mini-KM projects within departments and with them several different types of databases and knowledge research systems.
To avoid this Bird & Bird’s White says: “Not even knowing of each other’s existence, let alone compatibility, just shows that have to keep the communication going.
“Keep centralised, keep communicated, keep simple. Do as much as you can off the shelf and with existing systems before trying to be too clever. Only look to those clever products to add value to what you already have.”
One IT director points out that: “The main problem is with firms looking at a codified strategy automatically, when there may be a more appropriate strategy to use.
“Simple things work effectively. There have been many examples of real success using traditional desktop resources, like simply allowing access to Westlaw or Lawtel through the firm’s intranet.”
The elements that actually go towards creating the knowledge rely on business process and working practices of lawyers. Technology is very much only an enabler rather than a solution.
Alun Davies, head of KM at Lovells, points out that “a lot of law firms made the leap from physical collections to virtual collections about 15-20 years ago. There is, in KM terms, the legacy of existing systems in most larger law firms, which may come at some price. I do not think law firms have been slow to take up and use the technology, but it is a fair point that they do have a certain amount of baggage”.
In the past, KM has failed to deliver in its ability to produce relevant and useful knowledge resources on demand, which lawyers return to time and again. Part of the reason for this lay in the substandard way data may have been classified, being inaccurate, incomplete, insufficient and often with no quality control. Getting it right at the point of classifying the documents produced is a necessity in order to produce more effective results for those trying to access this knowledge at a time in the future.
At Richards Butler, the award-winning KM project ‘ouRBase’ is driven by an information professional, but coordinated by professional support lawyers, who monitor the quality of the knowledge submitted and promote the application of this knowledge throughout the firm.
“It was recognised that some research was being duplicated,” says Lee Hanley, IT director at Richards Butler. He adds that buy-in was easier because “the need was established at partner level and launched at a partners’ conference”.
According to Hanley, in designing the system the firm looked to make the interface as easy as possible and by linking the firm’s knowledge to external content providers this allowed immediate access to cases and legislation as well as linked updates for fee earners when these are amended. The major reduction in the time spent finding information has been achieved by striking a balance between practise and technology in implementing a taxonomy to suit the firm’s needs.
“One problem was how to avoid the scattergun approach,” Hanley explains, “preventing an open house on submissions and ensuring the quality of the input was maintained.
“An external taxonomy was purchased, but each business group was given a say in how their own subject field was dealt with.”
Developing a consistent taxonomy may be the first step for many firms. For global firms working in several jurisdictions the consistent use of basic legal terminology, which may vary from country to country is a case in point. Larger firms such as Freshfields have developed firm-wide, unified taxonomies to deal with this type of problem.
Kay argues that a firm needs a good taxonomy as a starting point. In making a comparison with the pharmaceutical industry, Kay says: “When you are working you need to know that you are talking the same language — a language you have agreed to use. If you do not have that, your capacity for sharing is genuinely difficult.”
Kay continues: “The counter view that a taxonomy does not matter is based on the assumption that an individual can understand which is relevant in the context. Perhaps this is true, but if you repeat your efforts you are wasting time.
“Another view is that you do not need a taxonomy for your knowledge. You can just throw in all your information and rely on a ‘brilliant’ search engine to find it.”
Birmingham law firm Wragge & Co used this approach to deal with a similar problem. Using the Falcon knowledge server the firm’s KM system has now been live in most groups for 12-18 months. The knowledge submission process allows fee earners to send documents to a secure area, where material is reviewed and put on to the KM system.
“When we started material was originally categorised by document type and source, but we ended up with small numbers of huge ‘buckets’ of information, which made it difficult to keep reviewing within one group.” explains David Halliwell, head of compliance and professional support at Wragges.
“By rejigging the system at a late stage, we changed the system to create a larger number of smaller ‘buckets’ of information. So, to try to avoid replicating know-how internally, we use an internally-categorised taxonomy based on different aspects.”
However, not everyone is in agreement as to the emphasis placed on developing a taxonomy.
“A lot of the best knowledge projects do not even refer to a taxonomy,” says Bird & Bird’s White. “One partner is an editor of an encyclopedia for a particular area of law. The index page is the taxonomy for that area — it is better than any off-the-shelf product. There is a lot of hype around taxonomy, but it is more important to understand how lawyers perceive the core information they need.”
Further to this, the major issue law firms are dealing with — central to any KM strategy — is creating an environment where knowledge-sharing is encouraged. Without a situation where lawyers feel comfortable sharing their expertise and experience with other employees, the project is doomed to failure.
Historically for UK lawyers this may seem as though a major shift in attitudes is necessary, yet Lovells’ Davies believes law firms are actually in an advantageous position. “In KM terms the legal industry has a bit of a headstart,” he says. “Lawyers are fairly knowledge intensive because of their background in their function and sharing this should come naturally.
“A knowledge-sharing culture is a given in the UK, but not so in the US, where the culture exists of independent practitioners regarding their relationships with clients as their own. By contrast, law firms in the UK regard their clients as clients of the firm.” Lawyers may be more geared towards knowledge-sharing than their counterparts across the water, but many share the view that the culture of law firms is not conducive to producing a sharing environment.
“The culture and rewards structure of law firms is not necessarily geared towards sharing knowledge,” says one IT director of a global law firm. “In order for KM projects to find success, firms need to change the rewards structure to encourage those who contribute knowledge. The reason why a lot of KM projects fail is the unreasonable expectation that fee earners should undertake altruistic gestures without necessarily rewarding the fee earners for doing so. And they are surprised when people do not contribute!”
Robbins agrees that lawyers are not intuitive sharers: “Lawyers by training and reward are not keen to share knowledge, even on mundane things such as precedents.
“It seems a cultural tendency not to share widely. Additionally it is not a culture that positively promotes spending a few hours each week annotating and making notes for the future. The challenge is to figure out ways to be comfortable with knowledge-sharing, so we can go about capturing data.”
Robbins feels that although information can be captured with minimal cost, if it is dependent on requiring lawyers to do something extra without any obvious advantage to themselves, at the expense of billing time, it will always be very difficult to get them to participate. “But if you can get them to do something as part of their normal business process it becomes much easier,” he says.
Developing ways of encouraging fee earners to contribute to KM, using their current working practices and behaviour requires an understanding of how lawyers operate, underpinning the necessity of KM as a lawyer-led initiative.
When designing and developing their KM solution, Keat, Travers Smith Braithwaite put an emphasis on ensuring lawyers’ working practice was the focus. Knowledge partner, Julian Bass was part of the team driving Keat and the emphasis was very much on maintaining a lawyer-centric perspective.
“One of our fundamental assumptions was that users of KM facilities are lazy in their use and contributions to them,” Bass explains. “We do not have teams of people, as some other firms do, whose job is simply to maintain a KM system. It was important from the outset that Keat will retain its integrity which means that it will be continually fed and edited, becoming a familiar tool.”
Success in replacing process has been enjoyed by firms where better processes and systems have been offered and consistent tools provided in order to help lawyers with their jobs. Without direction from a legal perspective against the practicality and usability of new measures, lawyers will quickly abandon tools that hinder their work.
“The success of Keat will depend on the frequency with which it is used,” continues Travers’ Bass. “The lawyers here are very able and impatient; something which is not of the right calibre and quick to use does not survive long.
“With that in mind those working on the setting up and designing of Keat, were all lawyers, working along side our IT and information department colleagues. The response from the pilot group suggested that the thought and work which had gone into the design and layout of Keat was pretty much right and I am sure that is because lawyers predominantly rather than IT experts set the ground rules.”
Welsh law firm, Hugh James, invested in its VisualFiles solution. As a combined CRM/KM project, IT director Phil Whitehead believes identifiable gains can be achieved — such as automating precedents — without impacting on business process.
At the front end of the KM strategy is the upcoming roll-out of Sharepoint, a browser-based interface providing lawyers with a range of functionality including setting up collaborative groups and accessing management information.
Whitehead says: “It captures the information without making lawyers deviate from their normal working practice, sometimes by just asking a few standard questions. By capturing this basic information, it is the best way to build up a body of knowledge as to how lawyers work. The issues that jumped out were why should I share and what am I getting out of it? So we decided to incorporate as much behind the process, without the lawyers actually knowing they are feeding in knowledge, such as common precedents. We achieved top-level buy-in on these, so we can use the knowledge on precedents throughout the firm.”
White says the key to firm-wide acknowledgement for KM may not necessarily lie with just buy-in from senior partners. KM needs those partners to make a commitment to translating the buy-in into action and to be left in no doubt in understanding what is actually involved.
But White has a word of caution. “Look after your junior people, because they are the early adopters,” he says. “Do not relegate them to second division in dealing with partners’ needs. In many ways, junior people’s needs are more important, as they are people for whom buy-in comes naturally. Junior staff have grown up with the system and have no migration issues to deal with.”
“I do not believe in mandating people to use KM systems,” he adds. “If KM has to be mandatory then they are not delivering value. If the value was so great people would not need persuasion.”
“Do not underestimate how long it will take to achieve a system like this,” says Wragges’ Halliwell. “Get people used to different ways of working. Lawyers are conservative animals — never underestimate how long it will take people to buy in. KM is not at the forefront of their job, so we have to keep thinking of ways to make it useful and communicate this back to the lawyers.”
The generic approach to KM for firms looks to be positive, with widespread recognition of the elements that need to be present to even contemplate success in a firm’s KM strategy. PA Consulting’s Kay points out that, far from a lofty set of ideals that firms can never get to grips with, KM has had more of an impact than is commonly believed.
“When did the word KM start being used?” Kay asks. “It has often been accused of being a fad, or another set of consultant jargon, but I believe we are now in the third stage of KM.
“The first stage was the arrival of an exciting brand new concept. The second stage involved IT directors saying they did not ever want to use KM again. At the third stage all the elements that we used to do in KM in the past have been hijacked by the supply chain and are now embedded within the firm creating an element of genuine maturity. That has to be healthy.”
