Knowledge Management first appeared as a chapter in Leaders in Legal Business (Stephen McGarry, 2018), a collection of essays by thought leaders in the legal market, published by AILFN (the Association of International Law Firm Networks). Click here for a direct link to this chapter in the book.
KM Definition and Benefits
Knowledge Management (or “KM”) helps law firms win and keep business. For law departments, it supports more efficient and effective operation. In a market where clients demand value and efficiency, KM is an essential approach to reducing cost while maintaining quality.
KM captures and reuses lawyers’ collective wisdom and helps identify lawyers with relevant experience. It consists of both processes and systems that identify, save, profile, disseminate, and use prior work and accumulated expertise to solve legal and business problems. KM means many things to many people; this short article provides an overview of how leading legal KM professionals view their own discipline. This includes the recent expansion of KM to related disciplines, including artificial intelligence (AI), legal project management (LPM), and process improvement.
Initial KM Focus: Documents, Precedents, and Professional Support Lawyers
Legal knowledge management started with a focus on documents: identify and index prior work product, and create precedents. Work product is any substantive document lawyers create; in contrast, precedents refer to vetted, more general documents specifically designed for regular reference and reuse. Precedents can include legal research, templates of litigation filings, model transaction documents, and checklists.
Early work product retrieval systems relied on key word (or “Boolean”) searches. These systems turned out to be only somewhat helpful because they often yielded too many irrelevant results. Moreover, even a relevant result might prove not as helpful as hoped because it is so situation specific.
The limited reuse value of work product led lawyers to try to develop precedents. They quickly discovered, however, that creating precedents requires dedicated resources. Good intentions notwithstanding, busy lawyers lack the time to convert client-specific documents into more general precedents. To address this gap, law firms hired professional support lawyers (PSLs) whose job includes creating precedents. They also monitor legal updates and perform other functions.
PSLs are expensive and typically not billable. This led to rise of commercial services such from Thomson Reuters, LexisNexis, and Bloomberg Law, which serve as centralized, outsourced PSLs. Of note is that U.S. law firms hire fewer PSLs than the U.K., Australia, and Canada. Law departments typically have no PSLs.
The explosion in the volume of email has challenged the document paradigm, and not in a good way. Many lawyers now dispense advice via email. Furthermore, too many lawyers use email software such as Outlook as a way to manage documents instead of using central document management systems. Capturing and reusing the advice rendered in email turns out to be even harder than doing the same with documents. Approaches to managing email are still maturing.
KM Evolves from Documents to Experience
Even when lawyers can find relevant documents, precedents, and email messages with good content, these materials have less reuse value than expected. The context in which they were originally used is very important to understanding and reusing them; rarely, however, do documents convey that context.
An example of capturing context — and immediate learning — is the U.S. military’s “after action reviews” (AARs), a technique to debrief after an action and capture the learning from it. A few firms and departments do engage in AARs, but that is the exception.
Consequently, knowledge management emphasis shifted from finding documents to finding experts. The expert could both identify useful documents and explain their context and use. Early expertise location efforts relied primarily on self-rating. These attempts almost always failed because lawyers would not participate and, if they did, they typically under- or over-rated themselves. As discussed below, search systems initially and now, specialized systems help manage and locate experience.
Other, bigger forces also shifted the emphasis from documents to experience. The 2008 economic crisis spawned many changes: First, Marketing and business development grew in importance. Second, firms hired pricing professionals to set budgets and alternative fees. Third, management started analyzing profitability by matter, client, partner, and type of matter. And fourth, lateral partner movements markedly increased.
These new initiatives require accurate information about both lawyers’ experience and the matter’s area of law:
- Winning Pitches Require Presenting the Most Relevant Experience. Companies want lawyers with proven expertise to solve their problems. Proving expertise – whether in formal, written proposals or informally in discussions – requires assembling a dossier showing the firm’s relevant experience and best fitting lawyers.
- Establishing Expertise Publicly. To win the opportunity to pitch, firms must establish their expertise publicly. This requires presenting specific matter experience by practice, earning league table top rankings, and winning awards. All three require locating relevant lawyer experience and matters.
- Pricing and Profitability Analysis Requires Accurate Historical Experience. Pricing professionals need to find similar matters to estimate costs and set prices. To do so, they need an accurate record of matter type and experience. Likewise, analyzing profitability by matter type has the same requirement.
- Integrating Laterals and Cross-Selling. With lawyers regularly moving laterally to new firms, the complexion of cross selling has changed. Personal connections and memory of prior matters no longer suffices. To cross-sell effectively, partners need a constantly refreshed source of information on matters and lawyers.
Enterprise Search Solved Many Problems – And New Products Will Do Even More
Around 2005, technology emerged that helped address the challenges of PSL costs, absence of context, increasing email volume, and an inability to systematically identify experienced experts. Enterprise Search, a method of organizing information derived from multiple sources, went well beyond keyword searches of Word and PDF documents. This technology searches multiple sources of information — documents, email, time entries, matter intake databases, and client relationship management systems — and applies sophisticated algorithms to create a retail-shopping-like search experience inside of law firms and departments. These systems also demonstrated that finding a related matter is very helpful, as finding a case similar to the one at hand identifies both lawyers with experience and relevant documents.
With a few words, lawyers can search for documents, email, matters, or experts and have a very good chance that the system would show highly relevant results at the top of a search result hit list. They also display search filters to narrow results (for example, by jurisdiction, lawyer, or file type). Today, several products are available to accomplish this.
Starting in 2016 and continuing into 2017 and beyond, enterprise search options have changed and improved. Many law firms are moving or are planning moves to newer software with greater capabilities. Some choices incorporate sophisticated artificial intelligence that will improve search. First, the software will “know” who the user is, his or her practice, and recent work. Those factors, previously untapped, will improve search results. And second, search likely will become embedded in other platforms such as document management or Microsoft Word. In that scenario, “search comes to the lawyer instead of the lawyer going to the search’. This has significant potential to improve lawyer efficiency. (For more detail on this point, see an August 2017 article my colleagues and I wrote, Transforming How Lawyer Work: AI-enabled Document Management.)
The Emergence of Specialized Experience Management Software
Around 2014, a new class of software came to market designed specifically to manage experience. These offer a single, enterprise system that can power marketing, knowledge management, finance, and other functions. The software allows collecting important details about lawyers and matters, offers flexible reporting, integrates with other law firm systems, and has a simple-to-use interface. Certain key information in these systems can be populated by enterprise search discussed above but experience software collects and manages much valuable data beyond that.
For robust experience management, however, software alone is not enough. Someone must populate the data, if not lawyers, then staff to take a first cut and, ultimately, to visit lawyers to collect the correct information. Reluctance to hire staff for this has fallen as firms respond to the need to pitch, price, and analyze profitability. Many Marketing Departments already invest heavily to capture this type of data. Finance and new business intakes often contribute. Likewise, KM departments happily contribute because they can ride on the experience system coattails.
The Rebirth of Intranets as Practice Portals
Law firms and law departments started building Intranets around 1995, shortly after HTML was invented. Early Intranets focused on administrative information and static legal content. With tremendous advances in the Web and content management, forward-thinking legal organizations now build portals with dynamic legal content.
Dynamic content alone, however, is not enough. The advent of the iPad and iPhone has dramatically affected design sensibility for all computer interfaces. Today, a good user experience and user interface (UI/UX) is critical if lawyers are to use any tool, especially if it is a portal designed to support practicing lawyers.
Modern portals are a great way to share KM content because they allow ready access to large quantities of information with just a few mouse clicks. It is essential to understand that they do not create content, though; they merely present it. Consistent work is required to collect and categorize content and then to design an interface suitable for a lawyer’s workflow
But few U.S. firms have enough KM content to populate more than a few areas of an Intranet. Additional value comes from using the Intranet to provide lawyers with information to manage matters and clients. Modern Intranets have pages for both clients and matters. Content on them come from other systems – document management, financial, and news services – so that updates are all automatic. Firms increasingly use matter pages to present financial dashboards that allow lawyers to monitor time they bill and partners to monitor total matter spend.
Making sure the right people see the right data requires using “personas,” or user profiles, to drive what the portal displays. A persona can be as general as a lawyer or staff, or as specific a senior associate in a certain practice. Since network login credentials identify a particular persona, the system can display the appropriate legal content. The next level of sophistication is when portals “know” what a lawyer is working on based on recent time entries, email, or documents, and further customizes content based on that information.
The best portals rely on searches to populate some content, humans to populate other content, and an “app store” to allow for customization of the experience and quickly performing common functions such as looking up a client-matter number.
Specialized Content and Tools, including Artificial Intelligence, to Enhance KM
Law firms and law departments can deploy a range of specialized tools to enhance KM across practices. For litigation, West km and Lexis Search Advantage, products offered by Thomson Reuters and LexisNexis, respectively, enhance enterprise search by building document profiles, which then allow users easily to filter search results by, for example, jurisdiction, judge, opposing counsel, or legal topic. They also link online research to a firm’s work products.
More recently, a whole class of AI products has come to market that helps lawyers work with deal documents and contracts. Machine learning products such as Kira, RAVN, eBrevia, and Seal automatically extract contract provisions, which accelerates due diligence reviews. This type of product can also be used to construct clause banks and determine “what’s market” within a firm for deal terms. (Numerous start-ups offer other AI software for other aspects of contracts such as negotiating contracts or comparing a contract to a corporate standard. These companies typically target law departments and business users as much if not more than law firms.)
Another new or perhaps reinvigorated class of software is for deal management. This class of software helps deal teams manage the multiple documents – and their signature pages – within a law firm and across all parties in a transaction.
Not all useful tools are new. A wide range of document assembly tools allows for automation of frequently used documents. For corporate law departments, contract management lifecycle software helps with drafting, storing executed versions, managing rights and obligation, and anticipating renewal dates.
Even with Technology, Organizations Need Dedicated KM Staff
KM does not happen by itself. Few lawyers complete document profile fields or conduct after-action reviews. Many give documents titles that have little meaning to colleagues (or to the author, after a few weeks pass). Machine learning tools for due diligence must be evaluated, selected, and sometime custom trained for a specific firm’s document types. And even with enterprise search and especially with portals, someone must be in charge of KM. Many law firms have directors of knowledge management, and some have chief knowledge officers. Note that these roles are separate from PSLs; any PSL typically reports (sometimes directly, sometime with a dotted line) to the head of KM.
KM Remit and Priorities Vary Considerably
KM in law started in the 1990s, usually under a different label, and by 2000, firms were hiring KM Directors or Chief Knowledge Officers. By 2005, it became clear that KM was not a monolithic discipline – and that it was changing regularly.
A June 2017 survey of about 40 KM professionals from 40 large US and Canadian law firms conducted under the auspices ILTA (International Legal Technology Association – the leading professional group of legal IT and KM professional) shows the significant variation in current KM priorities:
As for change, take as an example a trend that started around 2010. The legal market began embracing alternative fee arrangements (AFA), legal project management (LPM), and professionals to support both. The legal market is still at the early stages of fully integrating and adopting these disciplines. In many law firms, KM professionals lead or contribute significantly to AFA (and other pricing issues) and LPM. But as those disciplines mature, law firms often hire dedicated professionals to focus on them. That in turn causes further shfits in KM.
Another survey, one that I conduct for a private group of large law firm KM professionals that meet annually, shows how priorities of KM professionals shift over time. This survey, conducted in January 2017, had about 80 respondents from large firms in the U.S., U.K., and Canada. The details may be hard to read but two points stand out: first. KM professionals focus on many activities and second, priorities have, in many instances, shifted significantly over time:
Opportunity Lost and Now Regained? Collaboration and Social Media
Knowledge management often includes efforts to improve collaboration within firms and law departments and between clients and firms. Many lawyers and KM professionals initially thought that the firms and departments could borrow from the advent of Web 2.0 and an array of consumer social media services. Starting around 2010, many law firms experimented with internal social media tools (e.g., Yammer) but few if any of these efforts succeeded. Early disappointment led to several years low interest in trying collaborative tools.
More recently, a new generation of products has come to market holding new promise. These products tie either to the document management system or sit inside of a law firm portal and offer the promise of success. In addition to the goal of reducing the volume of email traffic and making email relate more clearly to matters, information governance considerations also drive some of these efforts.
Information Governance, Records Management, Document Management, and KM
For several years, driven by e-discovery and other legal requirements, lawyers focused on records management. RM generally means classifying documents and email so that they can be preserved or destroyed according to defined schedules. The RM concern has recently broadened to Information Governance (or “IG”), which deals with security, acceptable uses, and retention. For example, organizations may need to lock down documents with personally identifiable information such as social security or credit card numbers.
Some of the goals of IG, for example, limiting document access to just the team working on a matter, are at odds with the goals of KM. This trend is accelerating rapidly now with cyber breaches occurring regularly. A common practice is to assume that hackers will breach a a law firm perimeter, often by phishing, which means gaining a specific users’ credential. Once a hacker is inside, locking documents to the team working on it minimizes the amount of information a hacker can access.
These changes may end up re-writing the KM playbook. Part of the re-write will be a fresh look at document management systems (DMS) in law firms. Virtually every large firm has a DMS. But in many if not most firms, roughly half of lawyers do not regularly use it. That creates enormous security risks. Fortunately, a new generation of document management products are coming to market that help the security issues. And via better tracking of document history and/or artificial intelligence, provide strong pointers to lawyers who have knowledge of the matter, legal issues, and documents involved.
Developing a Knowledge Management Plan
So how should a law firm or department start with or integrate KM? The answer, of course, depends on where that law firm is now, what competitive pressures it faces, and what resources it has. What follows is a rough inventory and sequence that applies to many firms and departments.
- Deploy Enterprise Search
- Make it easier for lawyers to find work product and colleagues with expertise.
- Improve Experience Management with Better Matter Intake and an Experience Management System
- More systematic matter intake that collects richer profile information will enhance search results. A reasonably sized taxonomy helps here.
- In law firms, marketing and finance will also benefit from better matter profile data that allow, for example, more easily identifying prior matters related to an RFP and aggregating like matters for profitability analysis.
- Licensing specialized experience management software allows capturing additional information about lawyer and matters and then using that for pitches, staffing, and helping lawyers find experienced colleagues.
- Evaluate Specialized Search for Litigation Documents
- West km and Lexis Search Advantage extracts citations, jurisdictions, judges, and law firm names from litigation documents. It enhances searches and integrates online legal research to a firm’s or department’s work product.
- Try Professional Support Lawyers (PSLs)
- Test the value of one or more full-time professional support lawyers (PSLs) to find, create, and maintain KM content.
- Metrics for proving ROI are hard to define, so the value is a judgment call.
- Develop an Email Management Strategy
- Look for a proven email filing and search systems, which means keeping an eye on specialized products
- Hire a KM Professional
- Deploying search, email management, and building KM resources requires that this be someone’s full-time job.
- Develop a Portal Strategy
- Develop plans for a new, continuously maintained portal with a practice-focused user experience that is rich in content. Make sure to use personas and to invest in good design.
- Evaluate and Consider Deploying AI tools
- Many firms have already licenses AI tools, especially machine learning for accelerating due diligence.
- So develop a program to evaluate AI tools and their economic impact. Be prepared to deployed, depending on the evaluation outcome.
- Evaluate New Ways to Collaborate and Communicate
- Lawyers are drowning in email. In their personal lives, lawyers use social media and collaborative software.
- Despite early experiments that have failed, keep trying new tools for and approaches to web-based collaboration.
- Develop a Vision for the Electronic Matter File
- In the digital world, there is no single place for all of the materials related to a matter.
- Technology is improving to pull different types of information from multiple systems into a single, easy-to-use program that consolidates the data and provides context-sensitive views of it.