KM for SMFs


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If your firm is a small to medium-sized firm experiencing or anticipating a period of growth, you may wonder how KM can help you with your firm's efficacy. This article, originally in Solicitors Journal, will explain.

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KM for SMFs

  1. 1. KM for SMFsHave you ever faced these problems? You have a serious problem with a file, with no obvious solution. You’re sure someone somewhere in the firm knows the answer, but you don’t know who. You have just finished a tricky document (a contract, a lease, a statement of case) which has taken significant time. On your way home, you bump into another fee earner who mentions that they’ve just finished the same tricky document and you secretly fear their answer may be better than yours. How will you bill your clients? You need to review a particular case for some research, but Joe, who you usually phone when stuck, has been made redundant and you don’t know where to start. You are Managing Partner of a High Street firm and you wonder how to differentiate your firm and compete with “Tesco Law” following the Legal Services Act 2007 (LSA).You may think that Knowledge Management (KM) is only suitable for Magic Circle, but all Law firmsare knowledge businesses and KM may be your solution.This article aims to explain what KM is and some of the potential benefits to small and medium-sizedfirms (SMFs) which place KM at the heart of their businesses.What is Knowledge? What is Knowledge Management?You can divide “knowledge” in a number of ways in order to understand it better: some academicseven divide it into “data”, “information”, “knowledge”, and “wisdom”1. Most lawyers, however,instinctively understand what is meant by knowledge, although two definitions will be used in thisarticle: “explicit knowledge” (objective facts and figures) and “tacit knowledge” (subjective insightsand experience), as this article will show how solicitors can differentiate themselves in the newcompetitive landscape.The definition of “Knowledge Management” is still subject to debate2. KM definitely isn’t IT systems.It isn’t having Professional Support Lawyers. It isn’t even understanding web 2.0 and havingcollaborative worksites. Magic Circle firms may not have begun formally developing KM systemsuntil 1980s, but lawyers have been “doing” KM in practical terms since lawyering began. In simpleterms, KM is at the very heart of law firms and is how firms create, capture, access, apply, interpretand utilize the combined knowledge of their employees to improve their businesses.What benefits can KM offer?In a knowledge business such as a law firm, the benefits of successfully implemented and culturallyintegrated KM systems (“systems” in the broadest sense, not IT systems) are many and continuing.KM systems can:- Capture and document valuable existing knowledge for use by all fee earners Avoid knowledge leakage when individuals leave a firm1 See “At a glance jargon buster” at ibid
  2. 2. Enable a firm to produce documents more efficiently Improve profitability Aid transfer of knowledge between lawyers to ensure knowledge is available for re-sale by others Improve communication and collaboration Improve quality, consistency and enable a firm to speak with a “house-style” Improve risk management and reduce the cost of professional negligence suits Improve training and learning Improve employee satisfaction, attract talent and reduce employee turnover Help to integrate new starters and reduce lead-in time Improve customer satisfaction and build client relationships Improve knowledge-based marketing Offer a sustainable source of competitive advantage into the future and ensure growth and sustainability of a firmImproving efficiency and profitability through KMTurning to the list of situations in the introduction, how often has one of your fee earners finished atricky piece of research or document only to discover later that a colleague had done somethingsimilar before, and possibly reached a better solution?KM systems, such as precedent databases (externally provided or developed in-house, in a paperformat or online), knowledge packs on an intranet, quick guides, document management systems, awell-organised library, even shared e-mail or document folders, workflows, checklists and casemanagement systems, can all help to avoid this problem, preventing costly write-offs, enabling feeearners to take advantage of best practices and avoiding unhappy clients. Such systems also help toimprove consistency and quality, leading to a reduction in litigation costs and professional indemnityinsurance. They can also improve the productivity of support staff, enabling a firm to manage withfewer without compromising quality.Where existing knowledge is captured and supplemented by workflows and appropriatecollaboration, mentoring and supervision, work can be commoditised, improving leverage. Wherebills are based purely on chargeable time, this won’t necessarily improve profitability, but it canimprove volume of work, client satisfaction and profitability in fixed billing. Senior fee earners mayresist commoditisation of their work, believing it to be too complex, but a surprisingly large numberof tasks can be satisfactorily commoditised, and, once embedded, this improves senior fee earnermorale as it frees time to develop client relationships, work on more complex legal matters ordevelop new products and innovations. This commoditisation can also help smaller firms to attractsenior talent who appreciate being freed from more mundane tasks to concentrate on building aclient following.Smaller firms new to KM can benefit from the learning curves of larger firms and early adopters inrelation to such internal knowledge sharing. Research3 suggests that codifying explicit knowledgedoesn’t necessarily deliver as great a return on investment as systems which encourage3 “The New Organisational Wealth: Managing and Measuring Knowledge-Based Assets” Sveiby
  3. 3. collaboration and the sharing of tacit knowledge. Therefore, once basic precedents and workflowsare in place, a smaller firm can get a greater return by concentrating on connecting people andencouraging collaboration and a knowledge-sharing culture, than by spending money on costlytechnology.In the internet age, a vast amount of information is freely available, so clients expect a clear “value-add” (a lawyer’s experience and insight) to justify the cost of instructing a professional. This iswhere law firms can differentiate themselves in the future: by the added tacit knowledge that theycan apply to the explicit knowledge available to all.Also, once the LSA takes effect and SMFs compete with “Tesco Law”, law firms may find thatbusiness clients will not pay lawyers to deliver work in apparently inefficient ways and even if priceand quality are actually the same, so without KM systems to differentiate themselves, they may loseclients.What would happen if an important client phoned your firm out of hours with an unusual problem?Would the last fee earner in the office be able to put them in touch with the right person? What ifthe relevant fee earner was sick? Would another fee earner have access to sufficient knowledge tobegin work or manage the crisis until that expert was available? Well-designed and integrated KMsystems (such as a White Pages, a well-designed knowledge database, a training and networkingprogramme) can help others tap into expertise and generally help to ensure that work is assigned tothe right fee earner, improving quality and customer satisfaction.Do you exploit all the talents within your firm? Many fee earners may be excellent technical lawyers,but poor at seeing the commercial potential of their knowledge. Do you have systems in place toconnect your technical experts with business-minded individuals? Why concentrate on developingnew products and income streams, when you have existing knowledge within the firm that is not yetfully exploited?Are your in-house training systems tailored to your staff or is it a last minute scramble for CPD? Arethere plenty of opportunities for staff to collaborate and learn from each other across practice areas?It is often through collaboration opportunities that innovative thinking, the kind that offerscompetitive advantage, occurs4. KM systems that encourage collaboration and networking, such asteam work, seminars, cross-practice meetings, on-line discussion forums and communities, can allhelp to encourage collaboration. Firms can supplement seminars with e-learning, webinars and on-line chats and then re-use knowledge in client-facing marketing.Lastly, many SMFs fail to exploit the full potential of their knowledge-based marketing, such asnewsletters, e-zines, client seminars and social media such as Blogs, Twitter and Facebook. If theknowledge within your firm is organised and your tacit knowledge shared openly, then its reuse asarticles, blog-posts, client seminars, internal training events etc becomes far easier, meaning lesseffort by your fee earners and lower non-chargeable time spent on marketing.Conclusion4 “The Knowledge Management spectrum – understating the KM landscape” Binney 2001 p37
  4. 4. When implemented correctly and embedded within a firm, successful Knowledge Managementsystems enable a firm to fully and efficiently exploit their existing knowledge and offer a sustainablefuture competitive advantage that is not easily replaced or imitated by others. Whether a firmworks with its existing technology and people or invests in new software and advice will depend onits circumstances. There are plenty of steps a firm can take to improve its efficiency and profitabilitywithout investing in costly technology if it places strategic Knowledge Management at the heart ofits business.Author profileHélène Russell of The Knowledge Business provides consultancy services in Knowledge Managementto the legal sector. After a decade as a solicitor specialising in clinical negligence litigation, she carespassionately about practical solutions to help lawyers work smarter. Her book “A lawyer’s KMHandbook” will be published next year. Hélène is also Founder of Knowledge Network West, theknowledge-sharing and networking group for KM professionals in the West.Contact her on 07548 912 779, visit, follow her on twitter@heleneadby, or e-mail her at the month of November, Helene is offering a free KM Healthcheck (usual cost £250) to the first10 firms which apply quoting “SOL-JO-10”i.
  5. 5. i Terms and conditions apply and are available on The Knowledge Business’s