Curve Consulting’s Gretta Rusanow has a passionate belief in knowledge management and international experience in its use. She gives Rebecca Fahey some practical advice on what law firms must do to take advantage of it.
“Gone are the
days when clients stayed with their lawyers for 100 years and never questioned
the bill”. With the arrival of the sophisticated and informed clients and
the advent of new technologies, the emphasis in the legal office has moved
from the practice of law to the business of law. For Gretta Rusanow, the shift
couldn’t have come at a better time. Understanding that law firms must focus
on knowledge management and e-business in order to survive in the longer term,
Rusanow formed Curve Consulting last year.
Curve Consulting provides knowledge management consulting services to organisations
and management and technology consulting services to the legal services industry
around the world. Gretta has focused on knowledge for at least ten years -
long before the popularist term “knowledge management” was even coined. Commuting
between offices in Sydney and New York, she comes from a background in legal
consulting with PricewaterhouseCoopers in New York peppered with project management
in the Legal Precedents Group of Mallesons Stephen Jaques.
With a clear focus on advising both Australian and US law firms on strategies
for managing their knowledge, she defines the concept as “the leveraging of
a law firm’s collective wisdom by creating processes and technology systems
to support and facilitate the identification, capture, dissemination and use
of the knowledge of lawyers and staff”.
“I take it beyond just the traditional legal knowledge [precedent documents,
legislation and case law] to all the pieces of information that you need to
know to be a top legal practitioner in Australia. It really does extend into
your business development areas and financial areas,” says Rusanow of her
approach to defining the scope of knowledge that should be considering during
the strategy development process.
“Knowledge management” is the current buzz phrase in legal circles. However,
Rusanow sees its application as going well beyond the simplistic computerised
organisation of documents and database that support many knowledge initiatives.
“I think that knowledge management is one of those terms that is bandied around
all over the place. It means all things to all people,” says Rusanow. Intellectual
capital includes a great deal more than the traditional forms of knowledge
that law firms have traded in up to now. Rusanow notes that the most overlooked
assets on the intangible balance sheet are the skills and expertise of staff,
along with their knowledge of third parties.
“The focus should be on understanding the skills and expertise of your colleagues
so that, when the opportunity arises where there is a demand for multi-disciplinary
work, it is a simple matter of tapping into the right person in the organisation”.
The uptake of this sharing of knowledge involves the effective adoption of
the most tangible part of the knowledge management concept technology. Recognising
the progress that law firms have made in the last ten years in moving technology
from a back office function to the forefront of how a legal office now works,
Rusanow foresees endless opportunities for law firms to enhance and revolutionise
their traditional practices and she applies this vision practically. A truly
integrated “attorney desktop” is the way of the future as far as she sees
it. This would allow the lawyer a single user interface to obtain any form
of information without having to go separately into every native application.
It would be a seamless incorporation of financial, document, client relationship,
marketing and research management systems.
Rusanow also sees the relationship between knowledge and e-business as key
to a law firm’s success. As we evolve into an e-business world, lawyers should
embrace e-business solutions to meet client needs. The concept of the client
Extranet holds as many possibilities as can be imagined. One dilemma created
by this concept is how much access a law firm should give their client base.
Rusanow believes that, once law firms have developed good internal knowledge
management systems, they should leverage those systems by developing client
specific work product repositories made available via an Extranet. She acknowledges
that cost can be the stumbling block. The initial outlay includes lawyer and
staff development time, the software and hardware necessary to support a secure
Web-base Extranet, availability 24 hours a day, seven days a week, and a dedicated
help desk. However, corporate law departments are increasingly coming to expect
their law firms to provide these services. “Law firms should embrace the Extranet
and knowledge management systems as a means of distinguishing themselves in
the market.”
To benefit from knowledge management, law firms must address their traditional
billing model. “While law firms continue to charge for work based on time,
there is little incentive to invest time in developing knowledge management
systems designed to reduce the time it takes to do work for two key reasons.
First, lawyers must initially lose revenue while they invest time in developing
knowledge management initiatives. Second, under the time based billing model,
the law firm will recover less revenue for work performed in a shorter time
frame. There is simply no incentive to work more efficiently.”
Under the current law firm model, Rusanow believes that partners have to see
that there is a cap on how far they can grow. The revenue of the firm is based
on how many fee-earning employees they have. She is of the firm opinion that
law firms are missing opportunities to develop other revenue streams based
on efficient work processes facilitated through knowledge management. For
example, some law firms have developed subscriber-based legal advice Extranets.
Law firms can develop such sites if they have well developed knowledge management
systems creating alternative source of revenue.
Coming from a recent past of advising in-house counsel of Fortune 500 companies
and American Lawyer 100 law firms on a full range of technology and management
issues, she is in a unique position when it comes to consulting to the large
Australian firms and corporate law departments. She was well placed to foresee
the trend in management towards the focus on knowledge management. “I knew
that law firms would have to adopt knowledge management strategies and really
focus long and hard on how they were going to transform the way they delivered
legal services through knowledge management and through e-business,” Rusanow
contends.
Rusanow’s passion for her subject is abundantly clear. She fears that law
firms will overlook the importance of knowledge management and relegate it
to the pile of management fads that they discarded in the past. Based on her
North American experience, she observes that Australia is a long way ahead
of the competition in terms of organisational aspects of their practices but
that they cannot rest on their laurels. Lawyers’ notion of law-firm knowledge
needs to be expanded past documents and databases into the realm of the tacit
information that is all too often left untapped.
Inventive e-business solutions, unique billing systems and truly integrated
“attorney desktops” need to be implemented in order to ride the knowledge
management wave. Rusanow leaves the hanging question: “At the end of the day,
if the only asset you have is your knowledge and you are not managing that,
then what is your business?”