Knowledge is power: Making knowledge management work for law firms

Despite the obvious importance of knowledge management (KM) to an expertise-driven business, many still believe that law firms lag behind other industries in their knowledge-sharing activities. With this in mind, Caroline Poynton talks to some law-firm KM professionals: Joy London (Allen & Overy, New York); Lucy Dillon (Berwin Leighton Paisner); Keith Pearse (CMS Cameron McKenna); and Helena Hallgarn (Vinge). She asks them about their roles and views in realising firm-wide knowledge sharing, as well as the challenges they have faced along the way. Bob Bater, principal associate at Infoplex, who is currently writing an Ark Group report on legal KM1, also joins the discussion, providing his insight on the current KM landscape.

It has been argued that ‘knowledge management’ is an inadequate term for what has become such a broad discipline. Where discussions commonly focus on tacit as well as explicit knowledge, fee-earner buy in and communities of practice, knowledge management appears too restrictive a descriptor, its bias seeming all too technology based and/or database oriented.

Despite potentially misleading terminology, however, Joy London of Allen & Overy (New York), Lucy Dillon of Berwin Leighton Paisner, Keith Pearse of CMS Cameron McKenna and Helena Hallgarn of Vinge, fully appreciate KM’s strategic significance. All talk about KM as a combination of technology, strategy and culture, with Dillon summing up the general opinion when she says: “The successful implementation of KM depends on lawyers taking knowledge management seriously. Acknowledging that active participation in KM investment activities is critical to sustaining fee-earning capability.” Hallgarn points out quite rightly that too many firms still think of KM as being technology based, an observation with which consultant Bob Bater agrees. “First, I think law firms must stop confusing KM with technology. Technology has a vital role to play, but it is people and their knowledge that are at the core of KM,” he says. “There’s a rule of thumb that says if you’re expending more than 20 per cent of your available resources on technology, then you’re doing an IT project, not a KM one.”

While technology continues to play an important part in the KM process, the realisation that true knowledge sharing must surpass any technology implementation becomes clear when focusing on the differences and interrelation of explicit and tacit knowledge. London sums up the dilemma well: “I think it’s safe to say that most large law firms in the US, UK, Canada and Australia, are on a level playing field in terms of their technology (for example, document-management systems, e-mail, CRM and accounting/billing systems, intranets, extranets, firm websites, etc.) But, legal technologies have been less successful, despite their strenuous efforts, in the development of systems that can capture and reuse the hard-to-codify experiential knowledge of seasoned law practitioners – the firm’s so-called ‘tacit knowledge’,” she says.

Pearse adds to this saying that the real challenge in KM is to recognise that knowledge is distinct from merely data and information. His view comes from his experience working as a production chemist with BP. There was strong encouragement from the management team to share what they knew, so Pearse and his team would write up reports and send them to production rigs around the world, or place them in a shared database. Only later did he discover that engineers were disposing of the reports because they had little or no trust in them. As Pearse says: “This was an example of one of the pitfalls of the ‘knowledge management’ process. How does an organisation create new ideas and know-how, transfer it effectively to where it is needed and, most importantly, ensure that is acted upon?”

It is a fundamental challenge that has made the role of the KM manager both broad and complex. For instance, London develops and co-ordinates the knowledge management and training (legal and soft skills) offered to lawyers in Allen & Overy’s US law practice. She works closely with other know-how, training, library/information services and marketing-support areas in relation to the global firm-wide initiatives, as well as those targeted at particular practice groups that are relevant to the global US law practice. Responsibilities cut across different geographical and legal practice areas in various countries, as London strives to ensure that people use their shared knowledge on a day-to-day level.

Bater believes that effective knowledge management demands such multi-faceted skills. “Knowing what expertise your firm has, legal and otherwise, and where it is, that is, the people who have it, shows that you take KM seriously, but it’s not enough on its own,” he says. “You need to be able to show that an expertise directory, for example, is actually useful to people – there’s little point in having it if it’s not used.” He also argues that a firm’s knowledge must be exploited to generate revenue, whether it’s through more efficient working, new products and services or value added for the client. For instance, there’s no compulsion to offer legal products and services over the internet, but it’s a channel that can be used to address new types of clients and enhance service quality to existing ones. He points to Linklaters’s Blue Flag and CliffordChanceConnect as one of the many examples that have shown what can be done to extend a firm’s knowledge in this way.

London has also taken the personal initiative to leverage know-how through sharing experiences in an online environment. She has launched a blog, ‘excited utterances: more than just an exception to the hearsay rule’, to record her thoughts about legal KM. As opposed to the technology bias of many law web logs, London was keen to explore the sociological and psychological aspects of implementing KM in law firms. It is her personal repository to informative and reliable law-firm KM articles, presentations and research reports, from which she can retrieve information for projects on which she is working. Most significantly, however, it also serves as a valuable resource for other law-firm KM managers, law librarians, information and learning officers, lawyers, judges, and academic structures.

It is surely the next step to applying knowledge for the general benefit of the legal profession, but such an open exchange seems surprising in the usually guarded and sensitive legal landscape. London, however, is unfazed. “I’m always concerned about posting potentially sensitive information about KM activities at any law firm, not just Allen & Overy,” she says. “But, if I find web links describing the KM or training activities of law firms (in press releases, annual reports, conference announcements/brochures, KM studies, etc.), I have to assume that the information has been authorised for publication by the law firm’s managing committee or managing partners.” She also believes that it is best for law firms to share their KM initiatives with each other. “I don’t believe that any law firm holds the key to the safe that contains the answers to all of our KM questions. As a matter of fact, more law firms are beginning to share their internal know-how with each other,” she says.

While some firms may be taking a far more open approach to their KM, for many, the thought of sharing their know-how on an external level is still daunting. However, there is a significant trend of law firms realising that there is competitive advantage to be won from opening up some know-how to clients. Berwin Leighton Paisner has taken the first steps down this path with some know-how being shared with specific clients. Dillon explains: “We work closely with clients to offer tailored services via our individual client extranets. These include specific know-how, bulletins, training and PSL support. Our intranet has been developed initially as an internal tool, but the underlying technology will enable us to offer selected know-how elements of it to clients.”

The firm’s ability to offer know-how on an external level must at least partly be down to innate confidence at the level of internal knowledge sharing that has been attained within the firm. Dillon would undoubtedly agree as she says: “I have made it a priority to involve everybody in the organisation as they all have knowledge to share.” Through the redesign of the firm’s intranet, Dillon has ensured that each practice area and support department has a site where everybody is encouraged to populate the intranet with information of interest. She says that it is used regularly by an impressive 85 per cent of the firm, while 15 per cent of the firm’s members across all departments are now involved in some way in growing the intranet (drafting editing material, loading and monitoring currency of data, etc.). While Dillon believes this demonstrates firm-wide cultural acceptance of the KM initiative, it has also provided some good groundwork for extending the firm’s knowledge sharing to the next level.

Vinge is not yet at the client-sharing level in its knowledge-management initiative but it is something that Hallgarn is looking forward to in the future. In the meantime, the focus is to build a true knowledge-sharing environment as a base for client sharing. On that basis, she is very happy with the results so far. “We moved our document collection to a KM database 18 months ago and it is now quite widely used. We are constantly receiving new documents and information,” she says.

There are inevitably challenges, however, to getting KM right. Hallgarn admits that she has encountered some internal resistance to the KM programme with some saying that the know-how is of no use to them as the various areas of practice look at know-how in different ways. Hence, in M&A, it’s easier to get fee earners involved in producing standard documents that tax lawyers or litigators do not have as much call for. Hallgarn’s answer is to understand the differences and approach them accordingly. “You have to show them the value of the know-how they need. With a tax lawyer, it may not be standard documents but legal opinions that are required, which can be collected and used the next time they are looking at a similar issue,” she says.

The issue of internal resistance is also raised by Bater, particularly within the context of hourly billing. He argues that law firms need to move away from the ‘eat what you kill’ model, which is a significant barrier to effective knowledge sharing. Instead, he says that it’s the collective power of the firm – all of its resources, knowledge included – that needs to be harnessed.

London agrees. “When you’re spending most of your billable time just trying to get transactional documents drafted and signed, it’s difficult for partners and senior associates to take the time to sit down, face-to-face, with less experienced lawyers within the firm.” Like Bater, she believes that KM within law firms will only work when a radical, cultural change occurs. That change might be anything from reforming the traditional billable-hour model to introducing a formalised learning, mentoring and coaching programme.

This cultural approach particularly fits in with Pearse’s experiences and attitude to KM. While he believes that a lot of useful material, such as precedents and standards, can and should be captured and made available, the majority of the more valuable knowledge remains within the heads of the people who have experience of the subject. “This sort of knowledge is best transferred using processes based upon human interaction like story telling, mentoring or more formal facilitated learning sessions,” he says. It is an approach that he says is being piloted at CMS Cameron McKenna with great success.

Talking about cultural change on this level is one thing but making it a reality is, for most firms, extremely difficult as organisational processes are deeply embedded across departments and offices. There are also difficulties in terms of resources available for such significant change-management programmes. Hallgarn well demonstrates this when she describes her firm’s approach to PSLs. To adequately cover the many practice areas at Vinge, the firm would need to employ around 20 PSLs. Hallgarn explains that to do so would neither be a profitable way of managing law or financially feasible for the firm. Instead, they have introduced KM lawyers who work as project leaders while the fee earners produce the documents. The KM team, including the KM lawyers, assistants and librarians, manages KM across the firm’s nine offices in Sweden and abroad, working with fee earners to ensure that their differing KM needs are adequately met.

This individual strategy would meet with Pearse’s approval, as he dislikes the one-size-fits-all approach. Rather, he says the priority should be to focus any KM work on some key initiatives that address what’s really important to the business. Otherwise, he warns, firms will end up with vast quantities of unusable material.

While firms may have some way to go before they can truly boast of their KM capabilities, it is clear that most have taken major steps to put KM at the centre of their business strategies. Measuring its effectiveness, however, continues to present a challenge. Bater agrees that measuring KM is difficult but he does have a few tips. “If you take your client relationships seriously, make an effort to understand their circumstances and their needs, what pleases them, and actively manage and use that knowledge, then I think that’s a pretty good indicator of successful KM,” he says. “Do your people share their knowledge readily? Do they organise themselves into sharing communities around specific topics or activities? Those are good indicators too.” Ultimately, however, he sums it up simply: “I think the success of KM can be seen in the degree of satisfaction of all stakeholders in the business – clients, managers and staff, and shareholders too, if you have them.” While that may in itself bring about problems of measurement, it is at least a start to assessing a return on a notoriously intangible investment.

For most firms, the days of having to justify KM in strictly monetary terms have passed, as have the times when knowledge sharing could be effectively ignored as a sideline to a lawyer’s fee-earning work. As Pearse says: “Knowledge management is critical to law firms because, essentially, professional-service firms package up what they know and sell it to their clients.” With law firms now sharing knowledge, not only with clients but with each other, the signs are looking good for law firms truly joining the so-called knowledge economy of the modern age.

Reference:

The report, ‘Knowledge management in the legal profession’, by Bob Bater, will be published by Ark Group in April 2004. For further information, please contact Jason Schofield at: jschofield@ark-group.com.

Bob Bater is principal associate at Infoplex Associates. He can be contacted at: infoplex@online.rednet.co.uk.

Lucy Dillon is director of KM at Berwin Leighton Paisner. She can be contacted at: lucy.dillon@blplaw.com.

Helena Hallgarn is head of KM at Vinge. She can be contacted at: helena.hallgarn@vinge.se.

Joy London is knowledge and training manager at Allen & Overy, New York. She can be contacted at: joy.london@newyork.allenovery.com. Her blog is available at: www.excitedutterances.blogspot.com.

Keith Pearse is director, knowledge and information management at CMS Cameron McKenna. He can be contacted at: keith.pearse@cmck.com.