Features - Pragmatic Approaches to Knowledge Management

An Article Based on a Presentation at the Interwoven Legal IT Leadership Summit [1]


Introduction

Knowledge Management ("KM") may be one of the bigger frustrations law firm CIOs face. This is not to minimize other challenges. Dealing with infrastructure and application problems is hard, but solutions exist; solve a problem and move on. KM, in contrast, is like a mirage: no matter the distance traveled, the "real" KM answer always hovers over the horizon. Of course, law firms have made much KM progress. But as goals, processes, and definitions change, the "ultimate" answer always seems far off.

So it's time to step back and ask where we are today with KM. What's working and what's not? More importantly, are we even asking the right question? KM is important, but should CIOs focus on it? Instead of asking "who should do KM" or "is KM a process or technology," CIOs should ask a more general question - what's best for the firm?

KM Overview

KM Defined

KM has many definitions but a short one will do: capture, create, and re-use know-how. The figure below graphically summarizes the types of legal KM. Explicit know-how refers to knowledge reduced to writing: (A) forms, precedents, and model documents, which are vetted documents that lawyers or other professionals designate as valuable for re-use and often annotate; and (B) work product, which is substantive matter documents with re-use value. In contrast, tacit know-how has not been reduced to writing - it's in peoples' heads. This ranges from understanding how to run a big matter to bringing in a new client to knowing how to address a legal problem. Some firms tap tacit know-how with expertise location systems; the goal is to connect people to people rather than people to documents.

A range of tools and processes support each type of KM, from off-the-shelf software, to highly customized systems, to the near ubiquitous use of broadcast e-mail messages. And some might add collaboration and specific tools such as document assembly into the mix.




Why Do KM?

Why should a law firm invest in KM? Some say it's about professionalism, but in the age of Big Law, idealism will not do. The real answer is profits. Some say KM is a competitive necessity to protect profits. That's probably truer in the UK, Australia, and Canada than the US. Others say KM increases profits by improving realization, utilization, and client retention. And KM can help avoid some malpractice risks (malpractice judgments being bad for profits!).

KM Challenges and the Move to Automated Approaches

Because KM is inherently hard and doubts linger about its value, KM faces many challenges. Perhaps the biggest is capturing context. Documents without context - information about the case or the deal - may not be that useful. Outside of the US, manual efforts by Practice Support Lawyers ("PSLs") not only identify "good" documents, they also provide context (e.g., matter information and taxonomical categorization). In the US, few large firms have the appetite to employ many PSLs; instead, they focus on automating KM. Anecdotal evidence suggests that large UK law firms may be cutting back on their manual efforts.

Examples of Automated KM Approaches

Off-the-Shelf Approaches

Several off-the-shelf automated approaches are available. One is enterprise or federated search, systems that retrieve information from multiple repositories and present relevance-ranked results; product examples include Recommind, Autonomy, or X1. A second is work product retrieval, which automatically finds useful documents from within the document management system and automatically profiles them with accurate meta-data; product examples include Practice Technologies' RealPractice, West km, and LexisNexis Total Search. And a third approach is to use matter-centric features within document management software. Firms can set up client and matter folders that reference contextual information captured during the intake process and also create a default set of sub-folders that reflect the document types usually associated with that kind of matter. When properly executed, the matter-centric approach improves capturing documents in the appropriate context, enables discovery of matters instead of just documents, and makes searching far more reliable because of the the improved metadata accuracy.

Enhanced Automated Approaches

Some firms have created customized automated solutions:

  • McCarthys, a large Canadian firm, built Robinette[2], a system that facilitates lawyers contributing both work product and contextual information. Rolling it out required significant change management work.


  • Freshfields recently released its Athena system[3], which captures and catalogs precedents in a customized system built using Verity.


  • A large NYC law firm (a Notes shop) has built forums that capture e-mail traffic seeking answers to questions. Lawyers have become accustomed to searching the forum prior to sending out questions. PSLs filter the e-mail that go into forums.


  • Morrison & Foerster developed AnswerBase[4] (with Recommind as the main component). It relies on accurate and detailed information about matters (including a taxonomy) to relate information from multiple sources and rank results accurately. It is probably one of the most sophisticated and promising approaches today. Note though, that it required significant in-house and vendor effort.


  • Future KM Directions

    Don't wait for a KM "killer app." Advances will be gradual, not sudden. Taxonomies and taxonomy-management systems will likely play a bigger role. In many firms, marketing and finance departments drive taxonomy work. These departments gain big analytic benefits, especially if they use business intelligence software, by categorizing matters into substantive and industry "bins." KM professionals can "ride the coattails" of these often better-funded departments. Other possible advances may turn on Amazon-like rating engines, "social tagging" (e.g., del.cio.us), and better inference engines.

    What's the Right Scope and Focus?

    Later on in this article, we'll ask if doing more KM is the right strategy. Let's assume for now it is; if so, firms must consider the appropriate scope and focus.

    Enterprise v. Practice Solutions

    Tools such as federated search, matter-centric document management, or work product retrieval make sense to roll out firm-wide. The real work of firms, however, happens at the practice group level. Foisting KM solutions on practice groups will fail. Central staff can seed practice group efforts or, better yet, find pockets of interest and support those.

    KM Beyond Substantive Legal Content

    KM solutions typically involve work product, precedents, forms, or experience location. Creative firms should consider a more expansive view that includes managing and delivering external data, tools to support marketing, improved matter intake systems, and resources for the firm's business managers. This approach recognizes that lawyers are not the only knowledge workers in firms and staff may benefit from KM as well. More importantly, it allows KM efforts to tap additional resources of marketing and finance departments, which are often better funded!

    Internal v. External KM

    Most KM efforts today support a firm's own lawyers. Re-directing effort toward clients could provide competitive differentiation via better service and "stickiness" (to use the dot-com term). Furthermore, delivery to clients - whether for a fee or free - creates a "feedback loop" that can sustain the effort. Many firms have trouble maintaining precedent systems because the original proponent loses interest and there is no vocal constituency supporting it. Delivering knowledge resources to clients - whatever the form -avoids this fate. Clients either like what they're getting and ask for more or they don't. With client delivery, it's pretty easy to see whether the effort is worthwhile.

    KM or Practice Support

    Lawyers have many support needs - who said KM is most important? Some progressive firms are evaluating a more broadly conceived "practice support consultant" role. PSCs can be business analysts, applications developers (with the skill to relate well to users and knowledge of law practice), practice support lawyers, librarians, and experienced paralegals. They figure out what tools and processes will most help a particular practice. PSCs take a "blank slate" approach to practice support. Instead of assuming KM is most important, they go out into the field, talk to lawyers and practice groups, form relationships with them, figure out what they most need, then deliver and support that.

    Asking the Right Question

    KM primarily answers the question "how can a firm reduce the effort required to advise clients." It's a good question but not the only one. CIOs should also ask "how can IT help grow the firm's revenues and profits?"

    The graphic below illustrates a way to think about these questions. "Reduce effort" versus "increase revenue" projects can be plotted on x- and y-axes (where x measures hours and y dollars). Rather than plot points to represent projects, put in circles with area proportional to cost and color representing old, new, or leading edge technology.

    Arguably, a traditional KM effort such as precedents is a big circle in the lower right quadrant. It's expensive to do and it reduces lawyer effort. Work product retrieval systems can achieve similar results at much lower costs.

    In the upper right quadrant, online legal services arguably reduces lawyer effort and increases firm revenue. For example, a firm can collect its content, package it, and sell it on a subscription basis.[5]

    There are many potential initiatives in the upper-left that may not reduce lawyer effort but help increase revenue or profit. Examples include business intelligence, relationship discovery software, work force management software (increasing lawyer utilization by even one-half percent is huge), client matter budgeting systems, deal databases, or proposal generators.

    Using this graphic approach, CIOs can assess their project portfolios. Moreover, they can use this approach as a communication tool with firm management to help gain consensus on appropriate projects to pursue.






    Summary and Conclusions

    KM has been a challenge for a long time. We are now seeing the limits of manual approaches and a corresponding move to automated approaches. The latter hold out significant promise for firm-wide solutions but ultimately, KM should happen at a practice group level. It also needs to tie to marketing and finance department initiatives

    As KM moves to practice groups and coordinates with marketing and finance, the emphasis may shift to a more general form of practice support consulting. With the PSC approach, the slate is blank - a small team works with a practice to uncover the area of greatest need. The solution may or may not fit traditional KM.

    Even the PSC approach overlooks a more fundamental issue - the relative importance of growing revenue and profit versus reducing the effort lawyers need to advise clients. The savvy CIO should think carefully about opportunities to help the firm grow revenue and profits. A portfolio approach that lays out projects and options to measure their impact on reduced effort and on potential to grow revenue is a good way to assess options.

    [1]About the Legal IT Leadership Summit

    The Legal IT Leadership Summit is an invitation-only event sponsored by Interwoven for 40-50 large law firm IT leaders. It focuses on issues with significant impact on large global law firms. Sessions are led by experts and include extensive discussion. Interwoven planned this event in collaboration with an Advisory Board of 10 leading law firm CIOs.

    The 2006 theme - Navigating New Frontiers - explored simpler solutions to increasingly complex challenges:

  • How does IT partner with firm management to better understand requirements and drive change?

  • How can we drive new levels of productivity for fee-earners? What are the next frontiers?

  • What strategies can be employed to manage and mine growing terabytes of information?

  • How can IT departments be structured from a governance and staffing perspective to best be aligned with the needs and expectation of the business and its clients?
  • This article reports on the session titled "Pragmatic Approaches to Knowledge Management" which was moderated by Ron Friedmann. The purpose of the report is to document the key takeaways, insights and actionable strategies that were discussed during the session. For more information regarding the summit or for a copy of the summit report please email cmiller@interwoven.com.

    Footnotes

    [2] For more information on Robinette, see a case study at http://www.ii3.com/case_studies/mct.html or the article Cultural obstacles to a successful KM initiative in large law firms at kmworld.com.

    [3] For more information on Athena, see A World of Wisdom in the premier issue of the Legal Technology Journal (subscription required) or IT @ Freshfields Bruckhaus Deringer: In Search of Athena in Law Technology News (free registration required).

    [4] For more information on AnswerBase, see Lawyers as Shoppers - It's All About Finding Information at Prismlegal.com or IT @ Morrison & Foerster: Lessons Learned from Retail in Law Technology News (free registration required).

    [5] Though there are quite a few online services, it is not clear that they have generated significant revenues yet. A list of Online Legal Services is available at Prismlegal.com. Linklaters Blue Flag is one of the better known subscription online services. For a more general discussion of online legal services, see Richard Susskind's book, The Future of Law.