Think Tank: Highly Successful Law Firm KM Projects Focus on Revenue and Efficiencyaderantuser
By Glenn LaForce, Vice President, Knowledge Management, Aderant
Knowledge management (KM) is one of the hottest topics in legal right now and with good reason. Lawyers and law firms are at the apex of knowledge work in professional services and yet are under tremendous pressure to maintain or reduce the cost of the services delivered.
The allure of KM is compelling, but the concept in the legal community is hindered by confusion.
There are many competing ideas about what exactly constitutes knowledge management. Some say it’s managing legal research and curating content, while others believe it’s a critical legal business process.
From our vantage point with Handshake, which recently joined Aderant, these factors are both part of the fun and also the opportunity. Today, we’re sharing a bit of the philosophy that has driven us along our 17-year KM journey.
Saving Time or Generating Revenue
KM projects that are successful help their firm solve one or both of the top challenges currently facing law firms: pricing pressure and operational efficiency. For example, we’ve seen firms deploy KM projects that weave together the financial system with individual performance data and analytics with amazing results: Lawyers in those firms that use the KM system tend to have higher realization and profitability.
While such evidence is anecdotal, we have also seen this notion surface in survey data. The most recent Survey of Law Firm Knowledge Management, Library, and Research Professionals by ALM demonstrates a material impact:
“According to the survey respondents, the average revenue from library staff’s billable hours is $938,812, compared to $294,304 in 2016 and $526,499 in 2015.”
There’s also evidence to suggest the new revenue hasn’t come with additional headcount; rather it’s coming through greater efficiency.
Greg Lambert, the chief knowledge services officer at Jackson Walker, LLP and president of the American Association of Law Librarians, told ALM for its report on the survey that “his firm’s billable hours over the last three years have more than doubled while the staff count has remained constant.”
A Framework for Initiating Law Firm KM Projects
Many firms realize there is inherent value in KM projects, but questions remain over where to get started. We have found there are three general perspectives are useful for organizing ideas, developing goals and initiating projects.
1) Lawyer-centric knowledge management.
Lawyer-centric KM projects tend to center on individual tasks and workflows. This could be organizational, such as a list of tasks the attorney needs to complete for the day. A classic illustration is notifying an individual attorney that work-in-progress (WIP) is aging and they need to get the time entered and invoiced reducing the amount of lost time.
Portals are good projects for lawyer-centric KM of this nature. The idea is to weave together multiple systems an attorney needs to do their job into a single view with a polished user experience (UX). In this way, attorneys avoid the interruption of going to multiple systems to gather information thus saving them time and enabling more billable hours.
2) Enterprise Search.
Enterprise search is one of the most exciting opportunities for law firms with KM. Beyond having a single universal search across all internal firm systems the legal research providers are becoming more responsive to law firm needs for customizing the delivery of subscription services. By indexing key external content enterprise search, this means internal law firm information – from the DMS, knowhow, CRM and financial systems – and external data such as legal research and exemplar forms are now co-mingled and displayed based on relevancy.
The net effect often means routine searches in the course of routine legal work that used to take 90 minutes may now take 30. Whether a firm follows a billable hour or fixed-fee model, the impact on profitability is unambiguous.
3) Client-centric knowledge management.
Client-centric KM initiatives typically support leadership and management needs. The quintessential example is the managing partner in a cab on the way to review an account with a client. The system displays all of the information related to that particular client account that partner might need – from project progression to profitability.
Expertise location is another innovative example. In most firms, expertise location is usually rendered in the form an all-hands email sent by from business development. In the process of completing an RFP, the proposal team is seeking an associate attorney, with experience in stock purchasing agreements and availability next month.
The responses they get back are usually all over the map: an associate with no experience but interest, another with experience but no availability, and finally a fifth-year associate that helped on such an agreement six years ago as a summer hire.
The example is intentionally exaggerated to assist in making the point: client-centric KM initiatives like expertise location find likely candidates based on data the firm already possesses. For example, the system examines which attorneys have already published exemplary stock purchase agreements to the document management system or have had billable hours on previous matters and are currently underutilized. The entire process is more efficient from start to finish and more importantly, more likely to help the firm win the RFP.
Knowledge management boils down to amplifying the most valuable asset in a law firm – the expertise and knowledge of lawyers, according to Camille Reynolds, Senior Director of Knowledge Management for Fenwick & West LLP.
Indeed, we agree. In a highly competitive market, there’s no better place to start than focusing on helping lawyers perform work more efficiently or generate more revenue.