Agile support: Make the most of the adaptive nature of KM

The shift of economic activity to the Eastern hemisphere continues. The workforce is diversifying. A generation of workers who regard email as a hopelessly antiquated mode of communication are about to co-exist with a generation who got by very well for many years without a computer on their desk. Cost pressures are not letting up. Clients are raising their expectations and are becoming genuinely global in their outlook. Firms are getting larger and more complex. These are not transient conditions: this is the new environment. Some firms are tapping into their knowledge functions to help them to adapt.

Adaptability is perhaps the ?key differentiator of effective ?knowledge functions.

To be effective, knowledge teams must learn to balance efficiency, quality and innovation in the right mix for their firms. They must uphold standards and create credibility, yet be entrepreneurial and opportunistic - knowing when to seize the moment and be able to work with what's available. They must work across teams and think beyond silos. They must use their peripheral organisational vision to avoid unintended consequences and to maximise the impact of small improvements. They must combine analytical skills with communication skills and speak lawyer fluently.

It's not a coincidence that many firms are realising that they can go well beyond the theoretical and accepted benefits of having a knowledge function. Some are beginning to treat their knowledge functions as agile business units, making use of their adaptive qualities for initiatives that lie outside the traditional vision of what legal knowledge management is ?and does.

Common ancestry

Law firms first began introducing formal knowledge management initiatives more than 30 years ago. The fundamental principles that originally drove this still apply - the need for efficiency, quality, consistency and value. The basic components of a typical law firm knowledge strategy are familiar from firm to firm. However, look more closely, and there is huge diversity in the details.

A recent expert panel discussion on legal KM perspectives in Asia revealed the diversity and complexity of forms that have evolved over time. It seems that legal KM functions have fanned out in unique ways into many different processes, content and systems. Content, systems processes, governance, people, culture - there is a vast number of possible combinations and variations of these components. This has not come about purely by chance.

Environmental pressures

The diversity of legal KM hasn't evolved randomly. KM functions are shaped by environmental pressures - that is, the business context and priorities of their firms. If an operational cost centre isn't working for a firm or a practice area - if it isn't delivering palpable value - it's unlikely to be around for long. It must adapt or die. KM is no exception.

Internal and external forces interact to produce unique adaptations. Legal reforms around upfront cost disclosure and estimation, localised downturns in markets, market expectations around value and billing in particular practice areas or geographies - all of these can interact to produce quite different outcomes. KM functions began to specialise according to the unique needs of their firms - they had the same fundamental features, but these were expressed in different ways.

A KM function in a premium practice area trying to edge out long-established competition on the basis of expertise and relationships will look quite different to a KM function in a practice area on the cusp of commoditisation. The premium practice may devote its energy to thought leadership and client-centred analysis, and may even use a solid knowledge base to drive innovation. A practice in the process of becoming commoditised will be focused on operational efficiency and consistent, predictable outcomes.

A knowledge function in a practice where there is a general sense of the external market value of the work, or a tacit 'ceiling' for a particular client, might prefer core sets of templates, clauses and how-to guides to free up fee earners to focus on higher value activities and enable relatively more junior staff to produce a better standard of work. KM in a firm where, historically, all recorded hours can usually be billed and recovered may focus more on search and retrieval than on the pre-packaging of written work product.

As many firms have learned through bitter experience, the process of building a positive knowledge culture starts with creating practical value, not the other way around. Value creation drives engagement, which in turn leads to culture change. Waiting for the perfect conditions to arise - instead of adapting to the conditions that exist - is a recipe for disengagement, squandered investment and possible extinction.

Isolation and convergence

Up until recently, it seems there were two distinct approaches to KM:

1. a primarily systems-based approach (historically tending to be dominant in US firms); and

2. a primarily content-based approach (historically tending to be dominant in UK, Australian and Hong Kong firms).

Of course, systems aren't much good without content to populate them, and content isn't much good without systems to organise and locate it, so both approaches contain elements of the other. The very largest firms have tended to have a fairly even balance. However, if we judge based purely on where investment goes, clear priorities emerge.

Whereas some firms have tended to invest mainly in systems to enable users to search and mine existing matter-based data, others have preferred to invest in people to filter and aggregate existing data, extracting only the highest quality material, and in generating high-quality template material from scratch.

Recently, in Asia, with the influx of new market entrants from both 'traditions' as well as established firms, significant cross-pollination has occurred and more blended approaches have emerged.

Some previously very distinct species of knowledge function are now converging. Firms that previously relied on a model involving time and people are realising that technology has finally reached the point at which virtual knowledge exchanges can operate without the need for constant shepherding and filtering. Firms that built their knowledge initiatives around the quest for the perfect system are realising that, just because you build it, it doesn't mean that they will ever come.

For some things, dedicated human quality control, discernment and filtering is essential. There has consequently been a rise in job advertisements for professional support lawyer (PSL) positions in firms where, previously, these roles did not exist. Yet, diversity in the detail remains.

Diversity in function

All firms have some core expectations of their knowledge team. That said, exactly what 'keeping the lights on' entails varies from firm to firm - it might be systems or content based, or a mixture of both. Beyond that, a defining feature of most, ?if not all, knowledge teams is more or less constant involvement in transformative projects, many at their own instigation ?(see box: Recent initiatives driven by ?law firm knowledge functions).

 

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Recent initiatives driven by law firm knowledge functions

Below are some recent examples of the types of initiatives (usually involving cross-disciplinary project teams) that are driven by knowledge functions in law firms.

• An ‘app-based’, fully user-customisable approach to knowledge content via the firm’s intranet, designed primarily around function rather than source (Large US firm)

• Coordinating a cross-disciplinary firmwide response to the complete overhaul of a core piece of commercial legislation (HK office of a global firm)

• Measuring and analysing data about client usage patterns of the firm’s website, using search term analysis to ensure readiness to meet clients’ actual (rather than assumed) content needs (Global firm)

• Tuning a firmwide enterprise search for emerging markets and non-Western scripts and terminology (Asian offices of a global firm)

• Facilitating knowledge transfer and connecting experts via social media as an early step towards the integration of recently-merged organisations (Global firm)

• Overhauling trainee development programmes to fuse foundational legal skills with technical skills and acclimatisation to the practice environment (Hong Kong and London offices of a global firm)

• Linking regulatory reforms around cost disclosure in civil procedure to global legal project management and fee estimation initiatives (London office of a global firm)

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Diversity in function has required knowledge professionals in firms to develop a diversity of skills. For example, many PSLs - originally tasked with creating and updating the firm's core sets of 'template' documents (agreements, clauses, checklists, research papers, how-to guides) and current awareness (legal updates, training) - now find themselves increasingly working closely with marketing and BD functions to turn a solid knowledge base into a competitive advantage. Others have extended more into internal capacity building through involvement with trainees, on-boarding laterals, internal learning programmes and coaching.

The naturally close relationship between knowledge and technology has resulted in some senior knowledge professionals crossing formally into IT roles and vice versa. A growing cohort are applying their project management and analytical skills to process mapping and improvement, with some involved in outsourcing strategies.

Competition for resources

Firms are continually battling each other for the scarce resources they need to survive - clients and talent. Many of the major disruptors to the legal market (not coincidentally, predicted around the time the first legal KM functions were established) are now here. These environmental shifts are changing the ?face of the legal market and some firms are drawing on their knowledge functions to help them adapt.

Some of the transformative trends that are particularly influencing knowledge functions are:

1. the move toward 'true' globalisation ?of legal services;

2. increased competition for commoditised work from lower-cost providers and the rise of legal process outsourcing; and

3. the war for talent and increased ?lateral mobility.

 

1. Globalisation of legal services

Many firms have been global only in the most literal sense that they have lots of offices around the globe. In reality, there was a head office and branch office culture. Nowadays, regardless of underlying business structures and regulatory barriers, clients are expecting us to be genuinely global in our approach.

This has a strong influence on the way knowledge is handled in firms. The easterly drift of centres of economic activity and growth, coupled with a harsh downturn in some traditional 'head office' jurisdictions, has meant that offices in Asia are no longer able (or willing) to get by with materials and processes totally designed with someone else in mind.

2. Increased competition and outsourcing

Many firms are now embracing outsourcing as a means to defend market share against low-cost service providers and to increase their own profitability in commoditised practices. However, as some have discovered, ill-conceived and poorly-managed legal process outsourcing can be a false economy.

There are natural and obvious parallels between the way credible legal process outsourcing firms work and the sort of process mapping/continuous improvement approach that knowledge functions adopt. After all, many firms task their knowledge teams with document automation initiatives. But, it's not possible to automate document creation unless you fully understand the process it represents in context. A few firms are tapping into this expertise and applying it to the process of outsourcing in a way that optimises the outcomes and maps the risks.

3. Talent recruitment and retention

A little-recognised way in which knowledge assists firms to compete is in its impact on talent. For the past few years, there has been a proliferation of firms seeking to establish a presence in Asia to take advantage of new markets and the eastward shift of global economic activity. New entrants typically seek to entice talented fee earners across from more established local and international firms.

The ability to efficiently locate and use knowledge has an impact on lateral integration. Firms are increasingly recognising this by making knowledge orientation a key part of lateral inductions and building out a practice-based knowledge strategy with the need to support a new practice.

The level of knowledge support available has a direct impact on the work mix of a new lateral hire. Time spent casting around for the basics comes at the expense of more satisfying work and/or personal life, and hinders business development. This affects engagement; suddenly, the hiring firm has an integration problem.

'Poor knowledge infrastructure' probably hasn't featured heavily in many exit interviews or failed lateral integration attempts, but its presence or absence has an important influence on the employee value proposition. This goes to engagement, productivity and, ultimately, talent retention.

Knowledge functions have a role to play at the other end too. With partners more mobile than ever before, knowledge functions are helping firms to minimise the damage and the lesions in organisational memory created when partners jump ship.

Need for adaptability

The changing face of knowledge functions in law firms reflects their adaptation to survive the market pressures of the past three decades. By tapping into this adaptive quality, leaders can unlock new ways to use their existing knowledge functions to help their firms to thrive in new and challenging environments.

Stephanie Abbott is director of knowledge, learning and development at Mayer Brown JSM (www.mayerbrownjsm.com)