Janders dean 2011 Legal Knowledge & Innovation Conference
Legal Gone Flat:What It Means for KM Tom Baldwin Chief Knowledge Officer
For Today Globalization Mergers Convergence Cost Predictability Winning Managing
Clients get bigger, more power Pfizer buys Wyeth: 64.5B Merck buys Schering Plough: 46B Wells and Wachovia merge BofA and Merrill Lynch merge 5% of corporations, control more than half of the $100 billion U.S. corporate legal services market 80% of the market is controlled by a mere 200 GCs
Global 500: 2010 vs. 2005 U.S. leads, but is down to 139 companies from 176 Japan remains flat with 71 U.K. down to 30 spots vs. 35 Australia remains flat with 8 China continues its march with 46 companies, vs. just 16Corporate globalization means law firm globalization
The Competitive Landscape It‟s not bad, it‟s worse than we thought Larger, more demanding clients - Super Convergence (30% 2006, 56% 2009) - „Purchasing‟ now driving it - Efficiency is now front and center Larger, more global firms
The Competitive Landscape “General counsel, you hold the purse strings. Go for it.” - Sept 20th Corporate Counsel article - “(firms) still managed to increase prices 70% in the ten years leading up to the recession of 2008, compared with a rise in non-legal business costs of 20% during that same period. Its a disconnect thats alarming to CFOs and increasingly difficult for general counsel to explain”
BTI 2011 Survey of Corporate Legal Spending 2011 spend remains below 2006 levels Obtaining “value” is now the second most important goal Corporate counsel need law firms that are focused on achieving the client‟s business goals in the most efficient way possible
Cost Containment & Predictability AFA Fair Market Value Finance & Procurement Management Convergence to Leverage Price Electronic Billing and Audits Increased Use Of: Outsourcing, Staff Attorneys and In-house Resources??Online Reverse Auctions??
Cost Containment: Reverse Auctions Pricing Tactic Spooks Lawyers August 2, 2011 By Patrick G. Lee
Firms get bigger, more global44 completed mergers in 2010 and 44 announced mergers YTD 2011Done Deals Hogan Lovells: 2,000 lawyers Norton Rose: 1,800 lawyers SNR Dentons: 1,400 lawyers Squire Sanders and Hammonds: 1,300 lawyersIn the works? Blake Dawson / Ashurst Mallesons Stephen Jaques / King & Wood Norton Rose / Fulbright Jaworski
Growth in Global 50 Firms 2000: 821 lawyers / 6 countries 2005: 1108 lawyers / 8 countries 2010: 1288 lawyers / 10 countries 2017 Projection: - Global 50 will be reduced to Global 20 with average of 2150 lawyers in 17 countries / across all continents - Erosion of middle market, regional, firms - Local boutiques continue to prosper Does this feel any different that accounting or consulting firms?
Enough Already, What Does ThisMean? How we win business is changing How we manage business is changingThe best thing that ever happened to KM, was the economy taking a nose dive
Getting New Business is a New Business Old relationship may not be enough - Firm mergers bring new relationships to other firms - Cost pressure - Corporate mergers bring new relationships to the GCs
What Are Clients Looking For? Project Management Efficiency Legal skills are somewhat assumed What does your firm do to stand out from the crowd?
Where do KM Opportunities Exist? Process Project Mapping/ Management Process (the „cog‟) Improvement (the „cog‟) Pricing
Richard Susskind’s Cog Trusted Advisor: - Subject matter expert Enhanced Practitioner: - Think PSL Process manager: - Process deconstruction - Project management Routine workers: - In-house review (discovery, due diligence) - Staff attorneys
The Role of the Process Manager“Who, in the future, will take on the responsibility for legal process management (process analysis and project management)? This is a fascinating question, upon which the future health of the legal profession may in part depend.”
The Benefits of LPM – A Win for Both Clients and Law FirmsFor Clients For the Firm Increase client satisfaction Increase client satisfaction Improve client communications Improve efficiency Enhance predictability – *Improved Realization* Deliver what the client wants Improve risk management on budget, on time, no surprises Attract new business Create greater efficiencies Ensure greater consistency across offices Enhance quality of the work *Often billable*
Project Management Many consultants pontificate that these must be lawyers Transitioning hard-core PMs can fail Susskind suggests “imaginative” lawyers might find this a unique career path Many firms have tried training lawyers, but.. And… they pay for themselves
Process Mapping? - Susskind suggests we learn from Industry - Capture of current-state processes, including Tasks Roles Time Know-how (precedents, forms & guidance) - Refinement of processes for enhanced efficiency and service - The map itself can be an academic exercise…
Process Mapping + ouRSite Once folded into ouRSite, a process map now becomes an actionable list of tasks Task based know-how is integrated Our team, and clients, can see the status of a given matter: - How we are progressing against the budget - Who‟s assigned to each task - What tasks are completed/outstanding Let‟s take a look….
Once a task is opened, guidance onhow to complete the task is shown All of the tasks from the process map now become measurable tasks in ouRSite Any model forms needed to complete the task are just one click away.
We can track this level of detail for the entire matter, or individual phases.Not only do we display the budget for the matter against WIP, but we also display that figureagainst how many tasks have been completed for the matter.These two figures together provide context to the overall progress of the matter.
Pricing How do you price something? - Start by knowing your costs (current data is lacking) - Codes (matter classification & time entry taxonomy) After Action Review - How did our end result match up to our original price? - Could we have staffed it differently? - Did we use technology to automate? - Did we manage it well enough? - These aren‟t just finance questions…
Conclusion „Traditional‟ KM is being repurposed Many opportunities abound Getting in tune with your firm‟s business issues and strategy – you‟ll find a sweet spot