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Practice Innovations - Managing in a changing legal environment
Gray Rule
July 2014 | VOLUME 15, NUMBER 3
Gray Rule
Paying Attention to the Canaries in KM's Mineshaft
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IN THIS ISSUE:
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»Teaching Legal Research to the Google Generation
»Paying Attention to the Canaries in KM's Mineshaft
»Law Firm Space Planning as a Knowledge Management Strategy
»Crowdsourcing and Work Synergies
»Big Law: Big Data
»Managing Risk Disruption Through Internal Risk Structures: An interview with Donald Caputo, Chief Internal Auditor, Shearman & Sterling
»Risk Avoidance through Succession Planning
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Paying Attention to the Canaries in KM's MineshaftV. Mary Abraham, Co-Founder at Broadli Inc., New York, NY
Every industry has its canaries. They are the early warning signs of important changes in the environment. In this article, we will take a look at some of the canaries in the mineshafts currently populated by law firm knowledge management (KM) personnel.

How do we breathe? What affects our breathing? These are two of the many questions that fascinated John Scott Haldane from the late 19th through the early 20th century when he used his abilities as a physiologist and philosopher to study the fundamentals of breath. Haldane identified the toxic gases that killed miners after mine explosions, created respirators that enabled rescue workers to provide life-saving assistance after a mine disaster, and found there were two very effective ways of providing an early warning of the presence of toxic gases: a fire safety lamp and small animals. He brought white mice and canaries into mines since their faster metabolisms caused them to show the negative impact of toxic gases well before those gases could affect a human's slower metabolism. Therefore, as long as miners kept a close eye on their canaries, they would have ample warning of the need to evacuate the mine before they were likely to suffocate.

The Canary of Law Firm Relevance

When does the canary of law firm relevance thrive? Any time that canary is present for the important decisions a law firm makes. And what are the major decisions a firm makes that have the biggest impact on its viability? Making real estate arrangements for its offices, hiring, launching new practices, and pursuing specific client relationships. If you are in a law firm support function and are substantively involved in any of those decisions, then you have lots of oxygen to thrive. The further you are from these important areas of decision-making, however, the harder it is to stay relevant and thrive.

Now take a look at your KM function. Are your skills and resources brought to bear on the major decisions identified above? If not, chances are the canary of law firm relevance near you is running out of breath. How much longer do you have before your function no longer seems as relevant to the firm?

Apologists for law firm KM will say that even if the KM function does not have an impact on decisions relating to office space, hiring, new practices, or client relationships, that is fine because KM supports the practice of law, which is the engine for the firm. Yes, basic KM executed well does support the practice of law. The problem is that this KM support often is buried. It is rarely acknowledged by fee-earners. Further, it can be difficult to draw a straight line from a specific KM activity to firm revenue or documented cost savings.

If you determine that the canary near you is not faring well, what can you do? Think hard about how knowledge resources and KM principles might assist in these major decisions and then bring your solutions to the attention of the decision-makers. Since they do not have your expertise, they are unlikely to know your capabilities and the extent to which KM may be relevant to their work. It is your job to educate them and, ultimately, convince them of your relevance.

The Canary of Client Relevance

From a client's perspective, what are some of its most important decisions? Planning strategy, choosing among business opportunities, day-to-day risk and compliance management, and selecting legal counsel. If you are in a law firm function that has an impact on these critical client decisions, then chances are that the canary near you is thriving. If you are not involved in these decisions, then you largely are invisible to the client and to any lawyer who seeks to influence client decision-making on these issues.

Interestingly enough, it may in fact be easier for a law firm KM support function to obtain access to these client decisions than to some of the law firm business decisions discussed above. For example, KM resources in some firms have been used to populate and manage expertise tools that help clients with risk and compliance issues. Further, information about a robust KM program in a law firm can help a client choose that firm as its outside counsel. These two approaches require varying amounts of effort, but can have an impact on key client decisions.

The Canary of KPI Relevance

A key performance indicator (KPI) is a metric used by a business to determine progress against strategic and operational goals. Depending on the range of goals, there will be a corresponding range of KPIs the business must track and assess. For example, a client-facing business would be wise to track client satisfaction with service, client satisfaction with value for money, and client satisfaction with the quality of its relationship with the service provider.

It should be possible for a KM program that is executed properly to improve the quality of law firm work product. It should also be possible for KM to improve the efficiency of the firm in delivering that work product. Therefore, KM should at a minimum be able to increase the client's sense of satisfaction regarding value for money. The question to consider is whether your KM function achieves this.

Lessons from these Canaries

Now imagine a mineshaft where some of the miners are paying attention to the canary and others are blithely ignoring it. Does that seem preposterous? Take another look. It is the mineshaft inhabited by law firm KM personnel. It is worth studying both sets of miners to understand better what they are seeing and how they are behaving.

The Observant Miners

In an increasing number of firms, KM personnel have seen the distressed conditions of their canaries and are taking steps to improve their situation. They have done this principally by shifting their focus from old-style law firm KM (e.g., focused on documents, databases, and intranets) to newer functions that leverage KM capabilities and resources in fresher ways. These newer functions include assisting with alternative fee arrangements, legal project management, and law firm (and client) process improvement. These firms have also used KM to create new products and services for client use: tailored current awareness, legal and business toolkits, expertise systems, subscription services, and consulting services are a few of the new offerings by KM. In these firms, KM personnel speak about how often they meet face-to-face with clients. They also speak about how their work results directly in additions to revenue. They are no longer a hidden part of overhead; they are a visible part of revenue generation that is valued by client and firm alike.

The Unobservant Miners

The unobservant miners doggedly cling to activities that were once standard KM tasks: maintaining collections (on the intranet or elsewhere), managing taxonomies, tagging documents with metadata, creating model documents and practice guides. While all of these activities have value, some firms have found that their costs do not justify their benefits. As technology improves, tasks such as tagging and document collection maintenance can increasingly be automated. And as the speed of practice grows, model documents and practice guides fall more quickly out of date unless the firm commits additional resources to keeping those documents current. Further, there is a real opportunity cost involved. Time spent manually tagging documents or creating largely static pages on an intranet likely would be better spent improving business processes or supporting an alternative fee arrangement that otherwise will cut too deeply into firm profits.

These unobservant miners may also be involved in concierge-type activities in which they provide personalized on demand service to individual lawyers of the firm. At a personal level, providing this type of service can be highly gratifying. The KM staff member involved knows beyond a doubt that she has actually helped someone in need. The problem is that this type of assistance rarely is scalable unless the KM department takes deliberate steps to consolidate and share the knowledge. Furthermore, there is an opportunity cost to this work: time spent for the benefit for an individual is time that usually cannot be spent in service to the wider firm.

What's Next?

At the end of the day, each miner has a choice: pay attention to the canary or ignore it. Granted, even if a miner ignores the canary, that miner might still make it out alive provided other miners raise the alert quickly and the mine evacuation plans are good enough to permit the efficient evacuation of all miners before disaster strikes. As we have seen from the frequent reports in the news of mining disasters around the world, sometimes miners simply are not that lucky. Do you really want to risk it?

Take a look at your own mineshaft in your law firm and compare it to those in other firms. Are you close to where the action is—literally and figuratively—in terms of the most vital decisions your clients and your firm make? Is the KM work you do relevant to those decisions? If the answer to these questions is no, chances are the canaries of relevance are not thriving in your mineshaft. So you have an important decision to make: do you stay or do you go? The question of staying or going is not necessarily about remaining with your firm. It is, more importantly, about remaining in your function as currently conceived. If the work you do does not have an impact on the big decisions, can you take steps that bring you and your work closer to those decisions and the decision makers involved? Can you begin to redraw the boundaries of your work so that its impact on the firm and its clients is clearer? And if you do not believe your firm will assist with or tolerate these changes, is there another firm that would be more supportive?

To be clear, this is not about your competence or performance. In fact, you could be at the top of your game, but if no one in your firm or at your client notices, you may well have a problem. During difficult economic times, you do not want to lose ground in the relevance game. So what should you do? Take a leaf out of the playbook of the observant miners. See how they have used their KM abilities to adapt to the changing environment. And, through this process, keep in mind the sage advice of Yoda: "If no mistake have you made, yet losing you are ... a different game you should play."

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