Opinion: It's the economy, stupid!

Jeremy Thomas takes a look back at developments in KM since 1992 and makes suggestions as to what firms need to do to survive 2009 and beyond.

It’s the economy, stupid” was the phrase that made Bill Clinton’s 1992 presidential campaign unbeatable. Seventeen years on the world is back in recession and anybody who ignores that fact whether standing for the White House or working in legal knowledge management (KM) would be foolish. KM in law firms over the past decade has been substantially fashioned through the wider forces operating in the economy and will be again.
To start with a few key points about the marketplace in which KM is operating, the following are starkly put but this is a time for realism:

Fee income over the next 12 months is for most firms likely to be at best static if not reduced;
Partners, fee earners and support staff are losing their jobs;
With fewer clients around and less work available the emphasis is on retaining business and winning new businesses; and
The performance of offices outside the hub will be scrutinised and unprofitable ones possibly closed.

All those working in KM will be impacted by these developments but for those with the right abilities and attitude this is not a time of gloom. What will be key is that KM can show that it is:

Client driven;
Adds value; and
Increases efficiency.

Client driven
KM is client driven, whether you view the firm’s fee earners as the ‘client’ and spend time enabling them to deliver the quality service external clients want, or in helping with value-added services such as client e-commerce products, briefings and training. However, in this market firms need to maintain or boost turnover and will want to see a greater range of output and involvement with clients. This can take many forms. It could be:

Boosting the number and quality of client-facing publications in a key area. For example, in the past 12 months we have doubled our volume of publications in one key area and there has been much greater partner involvement in their production so that there is more analysis of the business impact and less news reporting. In this area there has been a noticeable increase in deal flow (even in this market), a consequence and not a coincidence we believe;
Repackaging know-how into electronic form. For example, firms often have sophisticated know-how they have developed for a specific client. Sometimes it can be used, stripped of its client-specific elements, as the basis for a client database of general application;
Spotting and filling gaps in the range of client services offered by your competitors. For instance we noticed that none of our competitors in the autumn of last year were drawing together all the raw materials arising out of the credit crunch. Accordingly, we launched and now run a database of the raw materials relating to the credit crunch, available to all via our website. We have received a lot of positive feedback on this and it’s certainly enhanced the image of the function internally as a body that is client-centric and helps to win business;
Developing international know-how briefings. Clients like to know that a firm offers a uniform service across its offices but in smaller offices it’s often difficult to invest the same resources on the provision of briefings as in the hub. As work flows diminish, now is the time to ensure that all your offices can provide briefings on all the core topics you want to cover; and
Making sure your pitch teams know and can pull together your KM expertise. Clients are increasingly asking about KM capability. They will not pay top rates for firms reinventing the wheel and in an increasingly competitive market they will want to know what additional services can be provided and at what cost. Having at least a core database of what the firm offers clients in terms of value added products is essential if the firm is going to provide convincing answers that it can commit to. Recently Ashurst has been challenged with providing answers to very specific questions at pitch stages. We have therefore put together a database of answers to frequently asked pitch questions to which everyone in business development has ready access.

Whatever you decide to do to be more client-centric you also need to think through how you are going to ensure that your partners are aware of your products and that they are reaching the clients. That way your partners see you are delivering value and can feed in their ideas to ensure that what you are delivering is of maximum value to the client. Partners can be very poor at knowing what is going on (however many times you tell them!) so think about visiting or setting up departmental sessions and telling them or, better still, in the case of electronic products showing them the tools KM can deliver for marketing purposes.

Adds value
KM teams add value but now it’s important to be seen to be taking the lead in any number of areas where their skills set can be employed. This can mean taking the lead on organising the training programme for a major client, to developing fee earner training on how to write client briefings for impact or strengthening links with colleagues in other offices for the better flow of information or implementing best practice knowledge sharing initiatives with KM colleagues. Often in KM initiatives there is an intersection with other parts of the firm; when that is the case take the lead for pushing things on. In some cases that can mean doing someone else’s job, if that means delivering your project. All too often everyone can see their role as coordinating others and nothing happens. Underlying any such initiative should be the aims to add value or enhance some existing relationship or product and to avoid the appearance of a solo mentality.

Increasing efficiency
Increasing efficiency is at the heart of KM, after all it’s about ensuring clients receive the very best the firm has to offer at the most competitive price possible. However, nothing is ever perfect and it’s important to continually examine your priorities and policies in light of business needs to ensure that they still support business objectives and adopt contemporary best practice. For instance, the growth in the range of Practical Law Company’s services means that in certain areas firms may find it more cost efficient to rely on their service rather than their own KM team. They can also be contacted by e-mail or phone for further help and guidance so saving KM time (as long as it does not cross over into legal advice). It’s also surprising how quickly practices can develop new significance and require reallocation of existing resource, or technology can change. Restructuring and insolvency is very much a recent example of this. This requires expanded training programmes for the influx of lawyers working in this area and much greater prominence for the supporting know-how. Overall it’s important for KM to show that it has an aggressive programme of self-improvement and to demonstrate this in some way, whether by internal or external accolade. A survey of what your lawyers think of KM is a good starting point.
Look at new technologies, including social networking technology, but be sure that they meet your specific needs and adapt or disregard them if they don’t. At Ashurst one practice area was having difficulty keeping up-to-date its KM system without a PDL. A traditional Wiki was not felt to be the answer so we developed one for them with a partner approval plug-in. This Wiki was infinitely more successful in terms of posts and usage than the more traditional Wiki format we previously tried.

Overall
KM needs to be seen as part of the solution to the credit crunch. Be positive about seizing the opportunity this market offers. Push forward the client side and keep updating the documents you can’t outsource, run training programmes but package what you are doing as part of an initiative, perhaps as a key part of a ‘Project Upturn’ so that people see you are looking to the future. Fee earners are less busy, make more use of them. Don’t be discouraged about what is going on around you. Push on showing you are client driven, adding value, increasing efficiency and demonstrating you believe in the business.

Jeremy Thomas is a professional development partner at Ashurst LLP. He can be contacted at: jeremy.thomas@ashurst.com