Business and practice: KM and the law

As one of the most knowledge-intensive "industries" around, the legal profession is perfectly suited for knowledge management. Law firms have vast amounts of information that should be exploited to cement a competitive advantage over their competitors, and, of course, for their clients.

Late last year Curve Consulting and ALM Research conducted an extensive study with 71 of the world's leading law firms (34 from the United States, 12 from Canada, 11 from the United Kingdom, 10 from Australia, two from New Zealand and one each from Italy and the Netherlands). The average firm had a total of 611 full-time equivalent attorneys, including 193 partners and 787 support staff. The mean firm revenue was in the range of $200 million to $299.9 million, and the average firm had 9.3 offices.

The results of the study—the most extensive of its kind to date—were just published in September and show that law firms have yet to fully exploit the benefits an enterprisewide knowledge management initiative has to offer.

In Global Law Firm Knowledge Management: 2006 Survey, Curve Consulting's Gretta Rusanow defines knowledge management as "the leveraging of a firm's collective wisdom by creating systems and processes to support and facilitate the identification, capture, dissemination and use of a firm's knowledge to meet business objectives." She found that although firms are expanding their management of knowledge in the practice of law, they have yet to place the same emphasis on the business of law and as such are missing a tremendous opportunity.

Roughly 84 percent of the companies surveyed indicated they have a culture that supports knowledge management. However, and not the least bit surprisingly, the survey identifies many of the fundamental disconnects in the legal profession that prevent KM from succeeding in other industries.

For example, although the champions of KM are expected to lead the implementation, they are often not responsible for leading the organization. And, while everyone is expected to contribute to the initiative, appropriate systems aren't always in place to facilitate effective, nearly seamless contribution.

Another impediment to KM in law firms is the emphasis on billable hours, which is identified as the greatest cultural barrier. So while KM may be considered as a component for performance, it may not be when it comes to compensation. Only 13 percent of the firms surveyed measure the return on investment in knowledge management.

The firms report that they rely heavily on informal collaborative relationships to spread KM throughout other functions and departments in the organization, and more than 60 percent believe they need to improve those relationships. They see better use of technology as the most effective means to accomplish that important goal--for both the firm and its clients. A typical stack of KM technology tools might include a document management system, an intranet, databases and an e-mail system, but they aren't fully leveraged. Nor are systems storing financial, business and staff information (such as BI systems, HR information and financial/practice management systems) tied into the KM system, which reinforces that the business of law has yet to benefit from knowledge management tools and theories.

We'll be following up with more information about Global Law Firm Knowledge Management: 2006 Survey in upcoming issues and plan to feature a case study of a law firm that has successfully implemented knowledge management throughout the organization.