Knowledge management programs require a deft mixture of the data used and the people with the right legal expertise, according to a panel at the recent Law Firm COO & CFO Forum
NEW YORK — For law firms to design and leverage a truly successful knowledge management (KM) program that can put the collective expertise, experience, and insight of the entire firm at each individual lawyer’s fingertips, the focus must remain on both data and people, according to several KM legal experts.
In a breakout panel, Expansive View: Developing a Growth-Focused Knowledge Management Strategy, held last week at Thomson Reuters’ 21st Annual Law Firm COO & CFO Forum, panelists discussed how a successful KM initiative within a law firm can pay tremendous dividends around collaboration, efficiency, and client service, but only if it can remain properly focused on its mission.
Knowledge management often describes a purposeful system that is created within a firm to gather and organize all its internal and external expertise and legal acumen, along with its documented work product, contracts, libraries, and other information resources in order to create a single repository of all the firm’s collective data and knowledge. “Knowledge is the most important asset a law firm has,” said panelist Judy Mackenzie Stuart, Global Chief Knowledge Officer at Bryan Cave Leighton Paisner. “This pool of knowledge and expertise is what clients are paying for.”
Traditionally, firms’ knowledge management efforts were embodied among singular individuals in professional support roles within the firm; now, however, with the explosion of vast troves of data and digitized information that law firms can access, that role has expanded beyond people. Today, it takes a melding together of individual expertise with all that data to craft a methodology to make all this information and collective wisdom accessible to the firm at large, the panel argued.
“Knowledge is the most important asset a law firm has — this pool of knowledge and expertise is what clients are paying for.”
Panelist Kimberly Gardner, Chief Operating Officer of Holland & Knight, said that although many law firms “may have difficulty getting this fire started”, they likely already have pockets within the firm in which people from different practices and departments are coming together and talking about how to get things done in an informal way. These fledgling efforts are the real beginning of the cooperative process that can lead to a full KM program.
“It’s important to take inventory of what a firm has — take stock and see what really exists,” Gardner explained, adding that bringing people together around data and knowledge-sharing can ultimately lead to a more formal KM effort that can be communicated with the rest of the firm.
The key, of course, is keeping any KM initiative focused on the reasons the firm has decided to pursue this strategy, said panelist Cindy Thurston Bare, Chief Data & Innovation Officer at Frost Brown Todd. “You have to know the why.”
By building their KM initiative around three basic categories — experience, matter types, and industry — Frost Brown was able to understand its clients better and look for ways to serve them better as well, while supporting its own legal teams, Thurston Bare explained.
Bryan Cave’s Mackenzie Stuart agreed, noting that the core of any good KM strategy relies on turning data into useable information while remembering that a vast amount of tacit knowledge resides in the heads of the professionals within the firm. “And you risk losing that every time they walk out the door,” she said.
When a firm’s KM program is working well, it can provide ways for the firm to help “clients see around corners,” Stuart added, while bringing together technology and people “to make things happen in the right way.”
State of the legal market
At the opening of last week’s Forum, James Jones, a Senior Fellow at the Center on Ethics and the Legal Profession at Georgetown University Law Center, and Gretta Rusanow, Head of Advisory Services in the Law Firm Group at Citi Private Bank, took a deep look into the state of the US legal market.
“After coming through more than two years of chaos, the legal industry has been dumped into a sea of uncertainty around such issues as pricing demand and return-to-work strategies — and this requires a particular type of leadership to keep a steady hand.”
While 2021 was another record year for law firms, as data in the 2022 Report on the State of the Legal Market shows, cracks began to appear in 2022 as firms found themselves entangled in an elongated war for top legal talent, all while balancing higher expenses and early signs that legal demand in some areas was slowing.
“After coming through more than two years of chaos, the legal industry has been dumped into a sea of uncertainty around such issues as pricing demand and return-to-work strategies,” Jones said. “And this requires a particular type of leadership to keep a steady hand.”
In 2021, the legal industry was really seeing some extraordinary yearly statistics around profits and demand, Jones explained. Then, higher talent costs and rising associate turnover brought some dark clouds into the picture. Now this year, as demand slows mostly because of the fall-off of corporate transactional work, the picture may be darkening further.
“You’re really getting a counter-intuitive picture because profits remain high and rate growth is robust, yet demand is falling,” he said. “It’s a mixed message.”
Rusanow said much of this could be attributed to a timing issue, and that this year’s nascent slowdown hasn’t really impacted individual firm numbers in areas such as realization and rates yet. In fact, she added, that in speaking with individual large law firms, the vast majority of them are still making plans to bring on larger associate classes in the near future, indicating that a possible economic slowdown hasn’t altered their plans for growth.