At Legal Tech a few weeks ago, I moderated a session on clients paying for KM and subsequently posted session notes. That prompted interesting comments from panelist Jeff Rovner, Director of Knowledge Management for the Americas Region, Clifford Chance US LLP. 

In my follow-up notes, I wrote that one session highlight/conclusion was that

“Firms should be willing to invest in KM where they face a lot of competition or offer services on a fixed price basis. That’s ok as far as it goes, but large law firms tend to “move up the value chain,” meaning as practices commoditize, they tend to do less work in that area and move to new, higher value areas. So the impetus for KM is rarely that great. “

In a follow-up e-mail message, Jeff wrote

” I’d amplify your point about the value chain as follows:
1. The strategy of moving higher and higher up the value chain to seek greater and greater premiums strikes me as exactly the approach that Clayton Christensen described as so often leading to disaster in the Innovator’s Dilemma. If the big firms leave enough work behind, then innovators will eventually figure out how to do that work in a very economical fashion, and then all clients — including those generating what we now call premium work — will want to use the new approach. If the big firms don’t prepare to play in that new world, they’ll find themselves at a big disadvantage when it arrives.
2. It’s true that law firms have a hard time figuring out how to apply KM to non-commodity work, but that’s because they’re viewing KM too narrowly. Sure, explicit knowledge tools, such as brief banks and document assembly systems, aren’t the right approach to one-off work. Instead, collaboration tools, expertise location systems and things like my “servicing manual” deal distillations may be a better fit. [Jeff explained at the session how one client paid for a manual explaining how to manage certain debt after the deal closed.] And if we look beyond the law, there are plenty of examples of companies using KM to generate new products, establish new work processes and achieve other non-commodity objectives.”

I agree entirely with Jeff’s comments. Given my experience trying to develop interactive online services for the legal market, however, I am not optimistic that law firms will in fact avoid the Christensen disaster. I’ve recently heard at least a couple of inhouse counsel speak highly of content provided by LRN for training and compliance. LRN and its ilk could be the harbinger of the type of “disruptive force” Christensen describes (see for example, my post re the WSJ article on compliance training, which features LRN).

I also agree with his second comment. But adoption of new tools and processes, however, has been glacial; in general, lawyers are very slow to adopt new ways of producing or delivering their work, sometimes even under direct client pressure. This creates a real opportunity for firms that can adapt new ways to deliver better service. My favorite example would be using web conferencing to deliver updates to clients. It’s technically trivial and would, I suspect, be of value to clients. Yet I see few firms doing this. Similarly, in spite of all the hoopla over blogging, only a few large firms have firm-branded blogs.