On the knowledge

Knowledge management is more than just brining various parts of a firm together, says Helena Hallgarn, former head of KM at Scandinavian firm Vinge, who argues that to deliver benefits, KM has to look beyond legal knowledge alone.

Law firms sell knowledge. Because this knowledge is valuable to clients, firms, in turn, invest in ‘knowledge management’ (KM). But what exactly is the role of the KM function at a law firm? Is it simply about legal know-how and documents, or is there more to it? And are the strategic issues for law firms really so different from those that affect production or industrial companies?

At Vinge we recently revised our KM strategy and broadened our scope to focus on business knowledge compared to the mere legal knowledge that many other KM initiatives take as their sole focus. We have also tried to think along the lines of a production company rather than limit ourselves to legal knowledge. To this end we support the whole business with the development of different KM tools; to give the firm a competitive edge; and further, to increase profitability. With such a focus, could it be argued that the KM function is actually a business-development function in itself?

Background

Vinge is one of the leading law firms in Sweden and employs approximately 450 people, of whom just over 300 are lawyers. The firm is primarily focused on commercial law, particularly international transactions. Vinge has offices in Stockholm, Gothenburg, Malmö and Helsingborg, as well as in London, Brussels, Hong Kong and Shanghai.

Initially the focus of knowledge management at the firm was about working with standardised legal documents; making them easily available through the intranet. We had engaged in collecting other kinds of legal documents, however, to support our fee-earners and prevent them from doing repetitive work. If someone has done extensive analysis of a particular legal issue, this should be easily accessible for other fee-earners to reuse the next time the question arises. It is a way of making the fee-earner’s work more efficient so they can focus their time on more value-added work.

If we compare this to a manufacturing industry producing, for example, cars, they also need all the different parts to be put together at the right time, and in the right way, in order to produce a car. Toyota has worked on constantly enhancing its production capability to improve business. This has become a concept known as ‘LEAN’. It is not about doing things faster, but about doing things in the most efficient way. One part of this is the standardisation of procedures, which could be compared to our standard documents.

In other industry types, management naturally also looks at how to improve business by building new models, new and better services, new ways of producing goods, and so on. The function responsible for this is often a business-development function.

Is this really comparable to our KM function? In order to explain, I will first further describe our work.

KM at Vinge

We chose to organise the KM work at Vinge with a central KM group focusing on organising and managing the KM work, but with fee-earners responsible for the content in our systems (i.e. the documents), as they are our specialists in the legal field. This means we have partners responsible for updating standard documents, fee-earners responsible for contributing sample documents, and so on.

The KM group currently consists of one head of KM, one KM lawyer, three assistants and local library personnel. As we are a very small KM group we have to limit our focus to the management and organisation of knowledge and the exchange of knowledge. We have been working towards making document work, such as our standard documents, only a part of the daily knowledge work of fee-earners. That way we can make knowledge work more transparent so that it is simply another part of conducting business.

Now this also seems to be working in practice. The fee-earners realise how much they benefit from the KM work, and they share their strong know-how documents and assist in the production of the standard documents. We receive around 75-180 spontaneous contributions to our KM database each month – that’s one per fee-earner every two or three days. Fee-earners don’t usually focus on KM, but now it has become an integral, natural part of their knowledge work.

However, when considering gaining competitive advantage through our KM work we did not consider it enough to focus on the documents alone. We had to further investigate how to develop our KM strategy to support the business as a whole.

Broadened scope

We started the process of developing a new KM strategy by looking at our business. Our lawyers are not only focusing on solving legal problems, but also on solving business problems. For KM purposes this means it is important to focus on more than legal knowledge alone.

A lawyer solving a business problem needs to have knowledge about the company, the industry, the business environment, what knowledge the firm already has that can be of use, and so on. Accordingly, we broadened our scope to focus on business knowledge as a basis for our new strategy.

The spectrum of matters

When deciding the best way to manage knowledge to support the business we had to look closely at the kinds of matters that were handled by our firm. Vinge offers legal services ranging from simple company registration matters to more complex M&A, public M&A, and situations where our partners are acting as trusted advisors. The fees naturally vary depending on the complexity and the value added in the service. Even within more complex transactions, however, there are often several less complex issues, such as registration matters, which should be taken care of in a competitive way.

Looking at this spectrum of matters it is easy to see that there is no one KM solution applicable to all. Instead we decided to apply three different approaches to support the spectrum of matters: standardisation, knowledge sharing and innovation. Based on these approaches we have developed applicable KM tools to support the business. When talking about a KM tool I mean a combination of procedures, structures, IT solutions, and so on. It is sometimes part of a change management process too, as it sometimes also changes the way the fee-earners work.

Standardisation

When it comes to the more basic issues the focus must be on standardisation. We can only compete with firms charging lower fees for handling similar issues if we can manage them more efficiently, and spend less time on each matter while maintaining our high quality. Our goal is to secure quality of client service by focusing on supporting more efficient client work. The focus here is on efficiency.

Our initial KM work included the development of standard documents. However, to increase focus on standardisation we also implemented a document-assembly tool, used for different kinds of registration matters such as new share issues, mergers and company liquidation. When initiating such a matter, the lawyer accesses a web questionnaire where information about the company and details about the new share issue, for example, are submitted. Based on this information, a package of about 10-15 documents will be produced and saved into our document management system. The registration number, the company name and the number of shares to be issued are only filled in once, reducing the risk of typing errors. More importantly, the different packages are quality assured, pulling in appropriate statements from the auditor, reports by the board of directors and resolution proposals. The time spent on this matter can thus be focused on specific issues related to a particular client and matter, and not on the general issues that arise.

Knowledge sharing

Because clients come to us for our experience in handling complex matters, it is important to make good use of the skills and experience at the firm. KM supports this, where our goal is to leverage the experience at the firm.

The first tool developed by our KM team was our KM database. Instead of just being a document repository with a search tool, however, it is a true basis for knowledge sharing. We have a lot of different kinds of documents easily available, but it is not only about finding a document. We also have a taxonomy that can guide the lawyers through the process in several types of matters. Instead of just searching by using the right word, you can get into the context of your types of matters to see which documents might be most useful. If looking for an asset transfer agreement, for example, you will be guided to that area in our taxonomy structure, and find not only an agreement, but also a memo regarding tax issues, and another on employment issues, which could be quite important. In addition there might be a short notice about some legal changes that you should be aware of. Our goal is therefore that the fee-earners should find more relevant information than they expected.

The structure of our KM database is vital in many ways, however, not just for our taxonomy structure. We have also structured the documents by dividing them into several different categories, and we are using cross references connecting different areas of law, and therefore making the lawyer aware of questions to consider in other areas. Furthermore, the KM database is also a support for ‘know-who’, as you can find an expert at the firm based on the documents he or she has produced. If you find, for example, two memos regarding product liability, the best way to access further knowledge in that area is to talk to the author.

Vinge is consistently ranked among the leading law firms in Sweden in the area of public and private M&A. This is an important area for knowledge sharing. Therefore we have also implemented a deal database to disseminate knowledge regarding deals done. This gives us a much better view of the experience possessed by different people; a know-who support within the M&A field.

We also want to make better use of our external information sources, and are working on the development of a business intelligence service support. For example, this can support you when you have an interesting client case and need some information about a particular client. We collect knowledge about the different databases, make packages of ‘best practice’ sources for specific searches and train some personnel to handle this. Instead of spending time doing searches in some of the external databases you are used to, you can instead ask for the information and get a complete package of the information available. This is to ensure an efficient use of our sources and access to the right information.

We also support shorter training sessions, such as discussions regarding a certain case or a specific ruling, combined with lunch. That way there can be a lot of exchange of knowledge, as these sessions also attract senior fee-earners.

Innovation

There are also situations which the client has not experienced before, where we must give new advice on ways of solving a business issue. The focus here is on expertise, and on lawyers acting as trusted advisers.

In a firm supporting knowledge sharing, it will be easier to receive information about new ways of solving problems, new business ideas and new ways of delivering our services. In our KM and deal databases we have new ways of solving problems, new ways of formulating legal structures, and so on. By making this kind of information easily available to our partners they will be aware of new possibilities.

A partner receiving information about the client and the industry in question, and who is able to combine that with information on new ideas in the legal field, will have a good basis for being a valuable advisor to the client.

Supporting the business

The whole business is a knowledge business and all fee-earners are considered to be knowledge workers. KM has become a true management issue.

The only thing that gives the firm a competitive edge, the only thing that is sustainable, is what it knows; how it uses what it knows; and how fast it can learn something new.

Looking at KM in this light, it is a management function supporting the business, developing the tools and working towards making the business even more profitable. In other words, it is simply another business development function at the firm.

– helena.hallgarn@vqab.se