Knowledge management -- the process of identifying, capturing, disseminating and using the knowledge created by a law firm -- should be key to a law firm's business. However, a recent study of 16 leading U.S., U.K. and Australian law firms found that among U.S. law firms, knowledge management, or KM, largely remains a narrow theoretical concept, without full management support. Consequently most firms have not made an adequate investment in KM. Even among U.S. law firms that have made the investment, many have not focused on tying KM initiatives to the firm's business objectives.
In late 2001 Curve Consulting, a consulting firm focusing on KM in the legal
industry, interviewed eight U.S., three U.K., and five Australian firms about
their approach to KM. The firms were multioffice, multipractice operations,
with an average size of 1,000 lawyers.
The firms were selected on the basis of their commitment to KM. As the head
of Curve Consulting, I conducted comprehensive interviews with the head of
KM or a representative at each firm. I interviewed participants on a broad
range of topics, including KM strategy, objectives, organization, culture,
technology, client service and metrics. The 2001-02 Global Law Firm Knowledge
Management Survey Report contains the results of those interviews.
Everyone I interviewed said that KM was a key business driver, yet it was
evident that their firms don't focus sufficiently on KM. I have identified
three primary shortcomings. Firms define the scope of KM too narrowly. Their
KM organizations are too small and not properly positioned. Finally, few firms
have introduced formal processes to measure the value of KM and cannot demonstrate
how KM helps achieve the firm's business objectives. Let's look at these shortcomings
separately.
TOO NARROW
KM involves both technology and nontechnology elements. U.S. firms emphasize
the technology element. Of the four U.S. survey participants with a KM strategy,
three focus heavily on content delivery via technology tools. That is necessary,
but not sufficient. Building a culture that encourages knowledge sharing is
critical to the success of KM in a firm. So is creating a dedicated KM team
to support the identification, capture, dissemination and use of knowledge.
U.K. and Australian firms have taken a broader approach, which emphasizes
the nontechnology aspects of KM such as culture and organization.
Knowledge can be both explicit and tacit. Explicit knowledge is what is "between
the bookends"; tacit knowledge is what is between a lawyer's ears. While
they say that they recognize the importance of tacit knowledge, U.S. firms
do not adequately focus on how to identify, capture and share it. They are
content capturing explicit knowledge, such as best practice documents and
research materials.
U.K. firms have focused on tacit knowledge and nontechnology processes. For
example, U.K. firms routinely conduct postmatter debriefing sessions between
KM staff and lawyers to capture tacit knowledge acquired during a matter.
This knowledge may then be converted into multiple forms of explicit knowledge,
such as methodologies, precedent documents or a record of newly acquired skills
and expertise.
U.S. firms approach knowledge management too narrowly in another key respect.
They concentrate on legal knowledge and know-how at the expense of critical
nonlegal categories, such as knowledge about the firm and its clients.
Staff members must know about their clients and the industries in which they
operate in order to give commercially sound legal advice. Even so, three of
the eight U.S. participants did not consider client information a category
of knowledge they should manage. The same number of U.S. firms do not consider
firm and practice area information, or the skills and expertise of staff,
as categories of knowledge to be managed.
TOO SMALL AND ISOLATED
Too often at U.S. firms KM stops at the top. Five of the eight U.S. participants
have appointed a director of KM, but those directors tend not to be in charge
of robust KM organizations. The typical U.S. firm has proportionately less
than half the KM staff of U.K. and Australian firms. The Australian and U.K.
firms have one KM staff member for every 20 lawyers. Only one U.S. participant
has this ratio. Two U.S. participants have one KM staff member for every 21-30
lawyers. Three of the U.S. firms have a ratio of one KM staff member to 31-40
lawyers, while two U.S. firms spread each of their KM staff members across
100 or more lawyers.
U.K. and Australian firms recognize that KM involves many different skills.
At those firms, for example, the roles of knowledge manager, professional
support lawyer and information officer are well established. The professional
support lawyer is responsible for creating content. The information officer
is responsible for delivering content.
The knowledge manager has one of two roles. At firms with professional support
lawyers and information officers, the knowledge manager typically has a central
management role, responsible for managing professional support lawyers and
the implementation of firmwide KM initiatives. At other firms, the knowledge
manager has a practice group role, responsible for meeting the KM needs of
the group -- a hybrid of the professional support lawyer and information officer.
The size of the KM organization and the specialization of personnel have enabled
U.K. and Australian firms to develop sophisticated KM systems and processes.
Precedent libraries and best practice work product repositories are standard
features at those firms. By contrast, U.S. firms are only beginning to focus
on such systems. U.S. firms are limited in their ability to build those systems,
because of their small KM teams.
U.K. and Australian firms also understand the need to involve practicing lawyers
in KM. Some firms have introduced incentives for lawyers to contribute to
KM. Sometimes KM is part of the performance review process. U.K. firms in
particular regard contribution to KM as a job requirement. Mindful of the
cost of having partners and associates involved, those firms involve lawyers
only in value-added tasks -- such as identifying valuable knowledge and presenting
training sessions. U.S. firms have not yet taken those steps.
The KM organization must be visible to succeed. Unlike administrative functions,
KM requires the involvement of every practice and function within a firm.
It often requires drawing together knowledge that has been traditionally housed
in different areas of the firm.
To implement KM initiatives, the KM organization must be able to work across
all areas of the firm. However, there are some startling gaps in the positioning
of KM in firms, especially with respect to KM's relationships with the finance
and human resources departments.
Critical elements of knowledge such as client, matter and practice area information
typically reside in systems managed by the finance department. However, seven
out of the eight U.S. firms reported either no relationship between KM and
finance or a reliance on informal collaboration between the two functions.
There is a similar disconnect at U.S. firms between KM and human resources
activities. Again, seven of the eight U.S. firms reported either no formal
relationship between KM and human resources or a reliance on informal collaboration
between those two functions. It's no wonder that U.S. firms are having trouble
with the cultural barriers to KM, such as lack of reward and recognition.
Knowledge is not the same as information, but at U.S firms, it's hard to tell
the difference. At three of the five U.S. firms with a director of KM, that
role is combined with the role of chief information officer. Those dual roles
perpetuate the view that KM is strictly a technology initiative and hamper
a firm's ability to develop a broader understanding of KM.
Finally, many U.S. firms have not implemented an appropriate reporting structure
for the KM organization. At one-half of the U.S. firms in the study, the head
of KM reports directly to the executive director. This suggests that KM is
viewed as an isolated administrative function. This reporting structure limits
the ability of the head of KM to influence cultural change or gain management
support for long-term investment. At the eight U.K. and Australian firms,
only one reports to the executive director; the rest report to the firm's
top lawyer or to a committee of lawyers.
TOO LOOSE
Success is admittedly hard to measure in KM, though firms around the world
don't seem to be trying hard. Few firms have introduced formal measurement
processes. Thirteen of the survey participants do not measure the return on
investment in KM initiatives. Few firms know how to assess whether a KM initiative
meets a defined business need. Seven participants do not record KM staff time,
making it a challenge to measure the investment in KM.
Without measuring the success of KM, the KM organization cannot demonstrate
its value. Successful KM takes several years and requires significant investment
in infrastructure and staff time. Yet six of the eight U.S. firms say that
management does not regard KM as critical to the firm's success.
In order for KM to be more than just a buzz phrase, U.S. firms need to figure
out what they want to achieve, how they plan to achieve it, and how they plan
on measuring it. Know-how is a firm's primary asset. It's a valuable asset
to waste.
Gretta Rusanow is chief executive of Curve Consulting, with offices in Sydney
and New York.