New directions: How KM managers are 'shaping law firm strategy

Kate Clifton explores how KM managers are '¨shaping firm strategy and development

The trouble with knowledge management (KM) is that it seems to be stuck on an eternal loop. Every few years, law firms realise that scant attention is given to this business-critical function and up their games. There is a flurry of activity, the latest technological fads are debated (and perhaps implemented) and then everything goes quiet, until the next epiphany.

With leaner times imposed by the global economic crisis, KM teams have been among the first to feel the pinch. But KM has nevertheless gained real gravitas in the past decade. The sector has seen outstanding examples of innovative firms that have made knowledge work for them. The transition from back-office support to trusted business advisor has been slow but sure. And the notion of KM as the application, rather than acquisition, of knowledge is filtering down through the echelons of the legal sector.

“It’s absolutely critical to our ongoing growth and we have developed our KM into a discrete and extremely focused function,” says Ted Burke, managing partner at Freshfields. “As the world becomes more complex, it becomes increasingly difficult to stay on top of legal developments. So, to continue to perform cutting-edge transactions, we need a focused effort on KM.”

The one-firm approach

Freshfields has long been associated with the innovative use of technology to support its vision of being a ‘virtual single office law firm’. From the creation of the firmwide intranet, Athena, through to the introduction of wikis, blogs and electronic bulletins, the firm has strived to make high-quality information easily accessible to its people.

“We have tried to move into the '¨web 2.0 world,” explains Burke. “KM has to be efficient. People need to be able to locate information within 30 to 40 seconds. To make it really work, it has to be essential – the information has to be unavailable anywhere else, so that you drive people to it.”

That idea has been one of the biggest drivers in KM’s rise to prominence in recent years, resulting in a more integrated and cohesive approach to knowledge work, especially as firms have expanded geographically.

Ogier, for example, has relied on its KM team to provide the ‘glue’ which makes it possible for its lawyers to practice consistently across jurisdictions – again, supporting a one-firm approach.

“KM is the bedrock for any future innovation,” says Rosemary Gray, group head of KM at the offshore law firm.

When she first arrived at Ogier four years ago, KM was very much a ‘cottage industry’ within each jurisdiction. Gray was tasked with ‘shaking things up’ and creating a global KM function. Today, '¨the firm’s systems and processes are '¨on par with those of major onshore firms.

“The one-firm strategy has been a fantastic coat hanger for KM, enabling us to implement a major change project,” says Gray. “We now have a global house style and have gradually standardised documents across jurisdictions. The larger firms may already have done this ten years ago, but it’s been a really important step for us.”

Taking the lead

It is a given that well-aligned KM drives efficiency, enables value-added services and supports firms’ longer term growth strategies. As a result, the role of the professional support lawyer (PSL) at many UK firms has evolved dramatically, in many cases becoming a knowledge/business development hybrid.

Allen & Overy is one of many firms whose PSLs are actively involved in delivering client pitches and training. The firm uses a decentralised approach to KM and its PSLs are active members of the practice groups in which they operate, rather than separate resources called in on an ad hoc basis.

“For some time we weren’t getting the best out of our PSL community and it tended to be a little bit forgotten in terms of its value,” says global senior partner David Morley. “We’ve really tried to bring it to the floor and the key is integration. Otherwise, it’s very easy for the PSLs to lose touch with what is going on at the coalface and, vice versa, the fee earners can lose touch with the know-how.”

In a presentation to the firm’s global PSL community a few months ago, Morley highlighted three core aspects of the role they should be playing. “The first was that they should be active not passive; the second was they should be integral, not separate; and the third was that the focus of their work should be specific, not generic,” says Morley.

By encouraging PSLs to be “leading edge research scientists as well as '¨wildcat prospectors” – to follow their hunches and adopt an innovative approach to know-how work – Morley recognised the importance of KM in giving the firm '¨an edge over its competitors.

“I want PSLs to be setting the agenda and finding new ways of working,” explains Morley. “I don’t want generic legal updates; it’s a waste of everybody’s time.”

Board level KM

The move away from more traditional KM has been widespread. But, are firms really making the most of what their KM teams have to offer? Rather than simply aligning themselves with business objectives, should heads of KM be more involved in strategy development?

“KM is increasingly involved in strategy, because there is a growing realisation that it needs to be in order for those projects to be a success,” says Cora Newell, founder of KM Insight Consulting.

While it isn’t common for KM directors to sit on law firm management boards, those that have been involved at a strategic level have reaped benefits.

Duncan Ogilvy, KM partner at Mills & Reeve, reports directly to the firm’s managing partner and is a regular attendee at board meetings. As a former managing partner who moved over into knowledge work and completed an MBA, his individual circumstances have shaped the role.

“There’s a general consensus here that we have derived value from having a KM specialist at the centre of any thinking that is occurring for two main reasons: what you can contribute and what you can learn,” says Ogilvy.

“It’s not just being at the meeting where ‘item seven: knowledge’ comes up. You can always get someone in for that. But if the business of the firm is organising know-how, and its competence in doing '¨so is such a key enabler, then KM ought '¨to be contributing.”

So, if a firm’s management are asking ‘what do we expect from our lawyers?’ it would seem odd not to have the head of knowledge involved in the discussion.

“Having the head of the team in the know helps keep the whole department aligned with the business,” says Ogilvy. “It’s the glue that supports the firm’s competence in performance and growth.”

Mark Gould, head of KM at Addleshaw Goddard, takes a similar view. He works closely with the firm’s managing partner and board and notes that it’s individual, rather than institutional, relationships that make such arrangements successful.

“It has been important to find ways to get the ear of the management. It says something about the way the firm views the whole knowledge process” he says.

“In terms of how my relationship manifests itself, if I see things that I think could be done better, I will say so, in the appropriate context. And similarly, if I see things outside that I think we could usefully consider, I will feed that back and keep that information flow continuous. People might not see that as part of a KM head’s role, but I think that institutionally it’s something that should be part of the norm at any firm,” adds Gould.

Lucy Dillon, director of KM at Berwin Leighton Paisner, sits on the firm’s board but acknowledges that KM might not always be the natural choice as a strategic lead.

“There has been a significant increase in the profile of the team over the past three years or so,” says Dillon. “Client-facing KM has been a revelation for some partners who may not have had KM front of mind previously. It has put us in situations where we have been able to deliver on some novel projects.”

She also points out that the transferable skills that KM people bring to the table are invaluable. For example, while they may not be involved in deciding where a firm will open up a new office, their project management skills will be essential when it comes to the implementation of that strategy.

Another KM leader says that when their firm does involve KM in ongoing strategy development, it really works. '¨But day-to-day input into decision making is patchy.

“We’re quite liable to pitch for something that we don’t have a hope of winning and it could well have been someone on my team who helped the practice group reach that decision,” he says. “In the real world, firms are just more disjointed than they ought to be. On the hoof decisions are made and often KM teams are inadvertently overlooked.”

Ogilvy cites mergers and lateral hiring as other areas in which KM brings a valuable perspective to the table. Indeed, he argues that a failure to include KM in strategy implementation can be to the firm’s detriment. “If you take in a lateral hire, how you integrate that hire into the business is a key differentiator in making the appointment a success,” he says.

“A senior partner can come and park his car at the firm and make some money, but the real achievement is in integrating him with the wider goals of the firm – which is a knowledge remit. KM can make a real difference in bedding in a lateral hire, or during a merger. It’s a knowledge contribution that makes the difference between the theoretical business case and actually making it happen.”

Essentially, it comes down to risk management. “Better knowledge processes lead to lower risk, so we have a common cause with our risk colleagues,” says Gould.

“But if you drill down further, the basic starting point for a risk manager is: ‘we need to close things off’. For a knowledge manager it’s: ‘we need to open things up’. There is a constant tension between the two functions, even though we are focused on the same outcome. The firm’s management needs to make the balancing decision.”

Gould, Ogilvy and Dillon all recall instances where KM has played an invaluable role in practice development strategy (see box: How KM is making a difference), but it may be some time before it’s the norm for KM directors to have a seat at the boardroom table.

“That doesn’t mean that KM can’t play an important role in the future success of the firm,” says Newell. “Simply having a KM director on the board doesn’t mean KM will receive more attention than in those firms which do not make this choice. Success depends entirely on individual personalities and the culture of the firm.”

As ever, an open and communicative approach to know-how work will position KM teams as key players in their firms’ future success. And a proactive, measured approach from individual PSLs and KM leaders will help to promote them as trusted business advisors.

“It’s about using that incredibly valuable knowledge to support the firm,” says Dillon.

“It’s a bonus to have someone with '¨a knowledge perspective at a senior '¨level, as it brings another dimension to decision making. Firms may be looking '¨at a completely different business model '¨in five years. But I still think that KM will have a huge influence in delivering wider firm strategy.”

 

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How KM is making a difference

Getting KM a seat at the management table

• KM is a service – ensure that everything you do meets the requirements of '¨your internal (lawyers) and external (clients) customers, while cutting back on unnecessary or unwanted projects.'¨

• There is no ‘I’ in team – PSLs should be fully integrated into their practice groups. They must be relevant, proactive and willing to ‘sell’ the services they provide.'¨

• Knowledge is power – but it’s not enough to merely acquire information. '¨Real value is achieved when knowledge is refined into products or services '¨that are beneficial to lawyers and clients.'¨

• Alignment is key – it’s not a new concept, but many KM teams still struggle with this fundamental principal. All KM projects should be closely aligned with the firm’s strategic objectives.'¨

• Take the lead – don’t wait for people to approach you. Walk the floor and speak to the lawyers. Understand the issues they – and the firm – are facing. You might not have a seat in the boardroom, but you can still bring business-critical insights gained from industry groups and personal networks.'¨

• The sky’s the limit – don’t be afraid to challenge existing processes. Be '¨open-minded, observant and confident enough to share your ideas of how working practices or strategy development can improve.'¨

• It’s good to talk – don’t forget to communicate with stakeholders around '¨the firm. The best KM professionals are noisy, even if it goes against their '¨usual characteristics.

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Endnote

1. See ‘Re-engineering processes’, Duncan Ogilvy, Managing Partner, Vol. 14 Issue 1, September 2011