Next week, I will finish interviewing AmLaw 200 managing partners and senior executives for my study of Client Value and Law Firm Profitability, and in January we will begin formally analyzing the results. But I’ve been doing a lot of thinking about the data we’ve collected so far, and I must admit that the area I am most puzzled about is knowledge management (KM). Some of the firms I’ve interviewed have been extremely pleased with their results, and others have been very disappointed, and I am still trying to figure out why.
Part of the problem may be that there are so many approaches to KM, and even different definitions of the term. KM is built around the idea of systematically leveraging the value of firm-created intellectual property such as documents, insights and experiences, but there are many different ways to do that ranging from informal sharing to sophisticated computer systems.
While some experts treat KM as an independent area, we see it as a key component of the larger discipline of legal project management (LPM). For example, in our LPM coaching programs, lawyers often share and improve checklists that they already have, and some of these quick wins evolve into more ambitious and formal KM efforts. At a recent workshop we conducted for the Ark Group, client John Paris described one of the sophisticated templates Williams Mullen has developed to increase efficiency: a “Road Map for Undertaking a Rule 506 Private Placement” outlining best practices for the firm’s private equity group. Similarly, as described in last week’s post, Bilzin Sumberg, another client and Ark panelist, has established an LPM sustainability committee whose mission includes identifying existing firm documents that can be used as templates for future legal projects so that professionals at the firm don’t constantly have to reinvent the wheel.
A fair number of the decision makers I’ve interviewed for my current research are in the process of expanding their KM programs. Consider, for example, these quotes from three of the interviews:
We are launching a brand new intranet here in about three or four weeks. I think it will be a game changer in a lot of ways, because we’re doing it in a way that it should improve the way every single person in this firm performs their job. We have built certain efficiencies into the program, and lawyers will have access to much more information than they’ve had in the past. It’ll be really interesting to see if we can accomplish all that we want to through this change, much of which is driven by trying to leverage our knowledge management…
Knowledge management has come to the fore a little bit in the last year or so, as we have heard and begun to realize that there is some value in it. We’ve had actually a pretty robust version of that institutionalized for many years. But at the practice group level now I think there’s beginning to be a greater appreciation for the value that that brings to client service… I’ve seen some progress on the understanding that our internal work product has some value and can be shared and leveraged more than we have been accustomed to doing, and that you can bring that to bear for more efficient client service.
We’re starting to do more knowledge management, with the expectation that it will improve efficiency and allow us to deliver the same legal services in a more cost-effective manner.
But will they get the benefits they are looking for? Some firms certainly have, as you can see in these quotes from three other firms that are further along in their KM efforts:
Knowledge management has been very, very positive for us… We have 12 attorneys in a firm of nearly 1,000 that just do knowledge management. So we’ve spent a lot of time there.
We’ve been at the knowledge management business for years… Our corporate group, our funds group, and our private equity group have done an especially good job.
We have brief banks, and we have form files, but we may need to accelerate our efforts there to keep up in terms of innovations and the way we deliver services.
But, on the negative side, here’s what three other firms said about their experience to date:
I think it’s tough to make a KM investment pay off, because it’s such a huge project to really maintain it, and we’re not in the widget business. We have some commoditized practices, but that’s a very small percentage of our overall work. It’s questionable whether the knowledge management model is really worth the effort.
We, like many other firms, have been disappointed in the knowledge management systems that have been available to firms over the past decade. The systems have not produced the productivity gains promised.
We put a lot of time into our knowledge management system before the lawyers working on it got frustrated because everybody had their own idea about how it should be set up. It’s very hard to get several hundred lawyers all committed to the same exact system and to put in the time necessary to make it work… We just haven’t found the best ways to make documents prepared by lawyer A easily findable and searchable for lawyer B. People aren’t going to sit down and do the type of indexing that you really need, and it’s always tweak this or tweak that, and there are still people who say, well yeah, this document was so negotiated, I don’t want anybody else to see it, and then there’s people’s general reluctance to allow access to work that someone else may criticize. We just don’t have as good a knowledge management as I know we ought to be capable of generating.
Exactly what’s the difference between KM initiatives that work well and those that don’t? As we analyze the data over the next few months, we hope to find some hints. But in our research, the KM discussions were short since this is just one small part of the much bigger picture of value and profitability. Those who want a complete answer may have to wait for someone to do a study that focuses exclusively on KM and exactly how it is implemented at different types of firms.
As with so many things in life, the basic idea is easy to agree with: of course it makes sense to share documents and leverage the value of a firm’s intellectual property. But when you dig into the details of exactly how to do this, the answers get more complex and controversial.