Wednesday, October 9, 2013

Knowledge Management Panel at the International Bar Association

I just spoke on a knowledge management panel at the International Bar Association today titled "Knowledge Management:  A Law Firm's Secret Weapon."  The IBA is a huge organization; there are over three thousand lawyers here in Boston today, discussing topics such as "legal issues related to photography as an art form" and "strategic positioning in the global investment market" and, of course, networking up a storm.  There aren't really many people tweeting here; as a side benefit to this not being a tech conference, however, the wi-fi is working very well.

I spoke about knowledge management technology, specifically, what makes a piece of technology effective for KM purposes.

I concluded that effective KM technology:
  • Connects people, content, and firm processes; 
  • Is easy to use for attorneys; 
  • Signals or provides access to information about content's trustworthiness; 
  • Does not normally require massive investments of attorney time outside their normal work; and 
  • Is consistently leveraged at the right time during the course of work.

Since the session is broken up into two separate panels, and I am speaking on the second panel, I am taking notes on the first session. I found it to be a strong session providing an excellent overview of justifications for knowledge management in legal and other professional organizations.

  • Aku Sorrainen, the organizer and chair of the session, is the founder of an Estonian law firm, a lawyer advising corporations in the areas of mergers & acquisitions and real estate.
  • Shelley Dunstone is a consultant from Australia, moderating the first panel.
  • Gerard Tanja is from Venturis Consulting, which advices governments, law firms, and corporations on HR and organizational matters.  He founded the Clifford Chance educational academy.
  • Michael Peer is from KPMG (forensics).
  • Silke Gottschalk is Director of Compliance with the Luther law firm from Germany
  • Charles Coward is an attorney with Uria Menendez in Barcelona

We start from the premise that law firms have done a lot to reduce their costs.  Law firms need to get creative about increasing their productivity since their continues to be pressure to reduce rates.

Gerard Tanja--What is the Knowledge We Want to Manage and Why?
He was at McKinsey, an organization that so effectively manages its know-how that it is considered a "learning organization."  Know-how is systematically available there.  He is seeing convergence between how other professional organizations like consultancies and accountant firms, and law firms are managing their knowledge.

The global legal market is a "Red Ocean" environment (think sharks and blood in the water). New entrants, fragmentation, and consolidation all roil the market.  The market as a whole is not expanding. In a Red Ocean you compete in existing market, as compared to in a Blue Ocean "open water" environment, competition is much less.  

This environment means you need to make systematic assessment of how to manage know-how.

Going forward, from the client's perspective, law firms will make available for free a lot of the templates that they have, via secure client portals.  Doing this does not lead to fewer requests for assistance. 

Operational efficiency is key.  Much of that will be outsourced eventually.  That's necessary if you want to compete in your existing markets.

Firms need to make clear trade offs and choices vis-a-vis your competitors.  How you deal with know-how in relation to your clients becomes a major differentiator. 

Firms should drive their knowledge management efforts in two areas; is the partner's knowledge only tacit, inside their heads, or has it been made explicit?  And, is the organization's know-how unstructured, or structured?  Firms need to encourage knowledge to be structured and explicit.  [I believe that you can't really make a partner's knowledge explicit--but you do need some way of connecting the partner with the person who needs the tacet knowledge at a given point in time.]

How did McKinsey do it?

Know-how criteria is included in the compensation, evaluation, and "brainwashing"; at every level it is made clear that sharing knowledge is an essential part of the culture of the firm.  When a colleague asks for help, you give it, even if it is not immediately rewarded.

Learning and professional development needs to be integrated with know-how.  People need to get rewarded for contributing to know-how. Law firms should invest much more in technology and know-how systems. 

McKinsey generally left their post-engagement review and client reports open, unless the client specifically requested (which happened less than 10% of the time).

The biggest return on investment is in ensuring that reinventing the wheel no longer takes place, and that the precedent quality is high.  This will increase margins without requiring more people.

Michael Peer

He is from KPMG (an IBA sponsor), responsible for dispute advisory services across Eastern Europe.  He runs a team that covers 45 jurisdictions. 

You have to embed knowledge-sharing into what you do every day or it gets lost.

KPMG is a series of individual entities with fairly small global integration.  Most sharing used to happen within each country's entity.  They hired 50 people at a global level to support each practice and service line and developed a knowledge management strategy for each (cross-geographical) practice.  They worked with designated "knowledge champions" who were there to collect and share information for each practice.

It was a major challenge to motivate these individuals.  They built the level of effort into the evaluation process.

The global team had to do some "anonymizing" of the content to avoid sharing client-specific details.  They also realized that they had to evaluate and periodically remove outdated content.

They wanted to create a credentials /  experience database.  Requests for experience can come in at the last minute.  

They also established a Facebook-style portal whereby you could have discussion threads; it was used to replace private "have-you-done-anything-like X" requests, but in a searcheable and retrievable form [I would call this an enterprise social network-- I believe theirs is based on Tibbr].

How at a global firm do you quickly find the right individual?  How do you leverage the best practices others have developed?  

They have a set turn-around time for conflict resolution (24 hours to ID conflicts, 24 hours to resolve / address). 

They handle client confidentiality concerns by having the knowledge champions encourage their teams to share information in anonymized form and by putting up credentials. 

KPMG will keep files limited to a particular group such as the "Czech practice" group, unless the clients impose specific restrictions.

They spent a lot of time developing methodologies, such as how to approach a disputed advisory project, or how to collect information from a client.  The documents were made available in conjunction with online videos.

Silke Gottschalk--KM Do's and Don'ts


Most of the knowledge in a firm lies in the heads of the practitioners.  You need to establish a formal process to build up a KM system.

Clients expect a mature KM system where clients can access your firm's knowledge.  Clients also need to provide their know-how and information to firms.

You need to develop forms and precedents to get the most.

You need to set up KM goals and standards that comport with what clients expect from you.  

Create a culture of knowledge sharing by showing the benefits of KM systems and incentives for contribution, keeping in mind that voluntary contributions will usually not work.  You should set up formal criteria and systems for contributions. Incentives at her firm include reputational and financial rewards.

The partner on the "service line" needs to monitor the quality of the KM inputs, to avoid "gaming" the system.  They track the level of effort in terms of numbers of hours.  You have to set up a culture where it is "normal" to contribute to the KM system.


Look out for the "lone ranger."  The only way to overcome him is to have top management support.  If you don't have it then it can be very difficult to implement.

Your firm's KM and technology systems have to be up to date.

Her firm is sharing precedents, forms, business development information, and market information (deal terms?) with clients in a secure portal.
Charles Coward

Benefits of KM

Knowledge management systems avoid the risks of losing important information.

You lose a lot of partner knowledge if it hasn't been recorded.

KM contributes to integration of a firm and its profitability.

It saves time in the preparation of documents, standardizes formats as well as quality and response time for services.

It provides much more precise information about who knows what, the firm's expertise.

Barriers to KM

Strict time and billing can be an obstacle to an effective knowledge-sharing strategy.  Partner compensation needs to include KM, but KM is hard to measure (you need quality more than quantity).  Public recognition can go a long way.  Get away from a culture where hoarding precedents is acceptable.  Speciality groups may take special negotiation and treatment, for instance requiring notice to the specialty group of a precedent download. 

Another obstacle is the belief that everything is artisanal and unique.  

His firm has 19 KM staff, half of whom are lawyers, with 600 lawyers.

Technology is essential, but is merely the conduit and distribution network that allows the interaction.  

It's easier to have KM in a "lock-step" firm than in an "eat-what-you-kill" law firm.  

How much is knowledge being accessed by lawyers? By clients? Who is monitoring this?

KM is essential.  It gives many things that are intangible and hard to measure. If you spend money well, there will be an enormous return; if you don' t do it, you may not survive in today's world.