Challenges For Law Firm KM and How To Address Them

20 Apr

Post by ILTA KM Steering Committee Member Chris Boyd

Definition and scope

For purposes of this topic, I’m defining KM as “delivering more value to clients by putting the collective experience and expertise of the firm’s attorneys at the fingertips of every other attorney.”  I’m bounding the scope of KM by the “three P’s”:  work product (e.g. form and sample documents), projects (e.g. matter profiles / documents / fees), and people (e.g. expertise locators, referral databases, and who-knows-whom).

Challenges in law firms — and how to address them

Providing more value to clients is not only the right thing to do, but also a competitive necessity.  Putting firms’ collective knowledge to use on behalf of clients seems like an unambiguously good and rational course of action.  Why, then, do law firm KM leaders face challenges in designing, developing, implementing, and improving KM resources?  What are some of the most common challenges, and how can law firm KM leaders address them?

Below are some of these challenges.  Some are common to all companies, or at least to all professional services firms; others are law-firm specific.

  1. KM viewed as a nice-to-have rather than a must-have.
  2. The billable hour revenue model.
  3. Little or no evidence of return on investment.
  4. Some KM requires attorney expertise but attorneys get no reward for the time spent doing KM.
  5. Individual, group or other cultural barriers to knowledge-sharing.
  6. IT infrastructure configurations.

I’ll address the first challenge below.  More to come on the others later…

KM can suffer from being viewed as a nice-to-have rather than a must-have.  Yes, standard M&A forms are a great idea.  Yes, a more powerful search tool will help attorneys find precedent briefs faster.  Yes, we should be able to quickly find the attorney who can credibly answer questions about privacy standards for online retailers.

But these “good hygiene” benefits of KM are dispersed and fuzzy, while the costs are all too clear.  Salaries and overhead for KM specialists are easy to pinpoint, as are software licensing and consulting fees.  But the cumulative value of better-written contracts, or faster-found experts, or a better state-of-the-market deal terms – well, those accrue bit-by-bit to many different people at many different times, and are very tough to quantify, let alone roll up into a compelling aggregate.

So when law firm KM leaders pitch KM generically as a good idea, or as the right thing to do, the business case can be tenuous and our success rate low.  Selling firm management on KM people, processes and tool investments is hard at the best of times.  In a downturn, the case for “more KM” may be even tougher (although thankfully the ILTA KM Survey suggests that KM programs are holding their own or even expanding among ILTA members).

Better, then, to tie KM directly to a key service or client and make it a must-have rather than a nice-to-have.  If a practice group has to use a defined set of forms to do an important kind of work – especially at a fixed fee – well, then those forms will get drafted and revised.  If a firm has to keep an expert list updated for a key client’s portal site – well, then that list will be kept up-to-date.  If a firm sells subscriptions to a database of practice-specific regulations and caselaw – you get the picture.  The revenue, profit margin, or client relationship imperative will drive the firm to invest in the necessary KM resources.  Much better for a CKO to ride the wave than fight the tide.

How, then, to do this?  Two suggestions to start:

  1. Tie KM to firm alternative fee arrangement (AFA) efforts.  Ideally, be part of the project team when AFAs are discussed, modeled, piloted and deployed.  Figure out what current or new KM resources would help the attorneys deliver better service faster, and make that resource part of the offering.
  1. Tie KM to a key client relationship.  Partner with Marketing on key client relationship initiatives and find out what resources the firm provides its best clients.  The firm should, of course, provide these to all clients, but often larger clients provide the impetus to get client relationship initiatives started or expanded.  Add a KM resource valued by clients to the offering.

Many firms are using one or both of these strategies. Here at Wilson Sonsini Goodrich & Rosati, we’ve had the most success with #1 and tied forms drafting and document assembly tools to specific service offerings.

How about some other examples?  Please feel free to contribute ideas or real-world examples in the comments.  You’ll also be able to see other examples in the ILTA white paper scheduled to be published in June.  The ILTA conference in August will also feature a panel with case studies on how KM can support innovation in legal service delivery.

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