The human element in knowledge management

Effective knowledge management is dependent on the people who have, or need to acquire, knowledge, but all too often knowledge strategies focus on the technology rather than all-important human interaction. By Ali Shahidi, Alschuler Grossman LLP.

The Three Musketeers is inspired by a 17th century work entitled Memoires de d’Artagnan by Gatien de Cortilz de Sandras, which Dumas and Maquet stumbled across in their research. This work essentially became an outline for part I of The Three Musketeers. At the time, Dumas did not believe that the Cortilz novel was historical, but thought he was simply plagiarising and developing a previous writer’s work. But Dumas claimed in his original introduction to The Three Musketeers that he thought the work was historical, not wanting to seem plagiaristic himself. Ironically, the Memoires are, in fact, historically based.

Dumas used knowledge, history and precedence to create a context for intelligence, morality and creativity. The practice of law in its ideal form also draws on knowledge, history and precedence to contextualise intelligence, morality and creativity.

The ‘human element’ in the practice of law also relates to both Dumas as storyteller, as well as to the cast of characters in the story line that is set in 17th century France.

Modern law-firm technology
In the absence of technology, 19th century writers, scholars and, more importantly, avocats had a more intimate sense of the human element in jurisprudence, as they do today. By the same token, modern law-firm technology has not improved that relationship and rarely, if ever, focuses on monitoring, analysing, measuring and evaluating the human element’s interaction with practice-automation tools. The focus is more on the functions and features of the products and not as much on the human element (the practising lawyer) and on the human element’s interaction with technology. Knowledge-management (KM) technology has not improved the situation, although the most important element in KM is the human who has, and is looking for, knowledge. The effectiveness of KM technology in the practice of law is heavily dependent on, and influenced by, the human element, as both the expertise provider as well as the consumer of expertise.

The same can be said about the transfer of intelligence, morality and creativity from those who possess it to those who aspire to it.

Practice of law as commodity
Present generational gaps in terms of technical knowledge and lifestyle, which are measured in single years rather than decades, highlight the challenges of modern law practice, which is why medium and large global law firms are faced with an exodus of 50 per cent of their starting associates to other firms or professions. The transfer of knowledge, intelligence, morality and creativity inside global law firms and within working groups (practice groups) inside those law firms is under re-evaluation both by internal management and by clients. Although it would be extremely difficult to commoditise morality and creativity, there is a significant push by clients to commoditise as much of the practice of law as possible in parallel with the same trend that has already taken place in similar professional-services organisations such as accounting and tax firms. The long-term result of commoditisation of legal services could mean significant changes to the success metrics of law firms as we understand them today. It is possible that all commoditised services can be packaged, outsourced and procured more economically.

There will be excessive competition among law firms for the remainder of legal services labelled as high-value services that are based on intelligence, creativity and morality. The premium that clients are willing to render for those services could be the driving force for law-firm profitability.

Knowledge organisations
Global enterprises under the direction of KM scholars such as Dr. John Seely Brown, Dr. Larry Prosak, Dr. Peter Senge, Steve Denning and Georg von Krogh have been addressing the issue of knowledge transfer within large ‘knowledge organisations’, such as Intel, Microsoft and IBM for the past decade. The use of technology to address knowledge-capital management and knowledge-transfer requirements of those organisations is similar to that of law firms. Although the definition of ‘KM’, or management and control of knowledge and intellectual capital at law firms, varies by firm and by vendor, the methodologies that US firms are using to approach KM is driven mostly by the available technologies and it is focused on the non-human elements: applications and data. Additionally, law firms have been slower to adopt technologies to manage their intellectual capital by five to ten years as compared to other global organisations with knowledge capitals, or knowledge enterprises.

Knowledge-management application vendors
There is no standard definition for KM in law firms. Traditional online legal-research vendors such as ThompsonWest and Lexis have historically generated their income by charging for categorised premium knowledge. They define KM within their own product framework and limit it to precedence, lawyer work product and expertise. Implementation of their respective products may be the easiest and the most stealth KM application roll-out with trusted names.

Non-traditional legal vendors with a focus on search-engine technologies such as KnowledgeServer from SydneyPlus and MindServer from Recommind, define KM as any piece of information that can be contextualised and categorised, including financial data and even electronic communication. One of the most well-known and successful implementations of contextual search engines has been at Morrison & Foerster, under the direction of Oz Benamram, the firm's knowledge management counsel.

Traditional enterprise search engines and appliances such as Google’s enterprise search appliance are powerful; however, they do not meet the specialised requirements of law firms to address their specific KM needs. Realising that task-based searching is a much more effective tool for both consumer and commercial applications, Google has just announced customised search, where the scope of a search can be limited to a specific subject. In effect, Google’s custom-search engine adds human intelligence to the company’s hyper-efficient automated process, presumably increasing the relevance to the user. In addition to their attempts to optimise the search engines, both Google and Amazon have mastered the art of user-behaviour tracking to optimise advertising content and placement. Use of a similar concept and technology for optimising search results within the context of KM in law firms is not available but on the radar for major KM vendors.

Hybrid vendors, such as RealPractice, which design the technology and manage the knowledge around how lawyers practice law, add a little more of the human element to their product offering and hence are more successful in attracting firms that are comparing multiple KM vendors. Skadden Arps’ Charmaine Polvara has had great success with RealPractice’s suite of applications and its unique Ace Profiler technology. Other success stories also come from custom in-house applications that are designed with the practising lawyer in mind. Nina Platt, Faegre and Benson’s KM innovator and visionary, believes in a structured change-management process with attention given to lawyers rather than the technology. Faegre and Benson has been successfully using SydneyPLUS’s product among other custom in-house applications to address its KM needs – the key success factors according to Platt are in “people and in change management”.

Technical metrics such as speed, indexing technology, relevancy, accuracy, contextualisation, entity extraction capability, interface design and data-integration features can be used to compare legal KM products and fine-tune them for a given environment. There is an unspoken consensus among KM leaders that sometimes a simplistic, stealth and organic approach to KM is more effective than an over-hyped, over-featured and over-marketed one. Empirical experiments in a real-world environment may be a more comprehensive comparison method but such an effort will require additional resources. The added benefit of a beauty contest or proof-of-concept with multiple KM vendors would be the extra attention that the law firms would get when there are competing programmes on the table.

Behavioural experts agree that it is much more effective (and less costly) to change the technology and make it work around the working lawyer, rather than change the working lawyer behaviour and make him/her work around the technology. At the same time, it is effective to monitor and measure how the human element is interacting with applications, and then use that knowledge to further improve and refine processes, as well as the technology. Google’s recently commissioned study on search behaviour is a good example of how interface design and search results can work together to assist the human element in finding answers. The conclusion of the commissioned study was simple: those using search engines expect to see the relevant results in the ‘golden triangle’ (upper left-hand side of the search results screen) and, more importantly, they do not go beyond the first one to two pages of a search result. Technology has made us impatient.

Empirical comparison and correlation
There is a direct correlation between the empirical success of KM initiatives and the extent of focus on the human element. The most successful KM initiatives have been where there is a balanced focus on the human element as well as on the technology. UK-based firms focus more on the human element or professional support lawyers (PSLs) rather than on technology. PSLs serve as the medium through which high-value content – whether it is lawyer work product, competitive intelligence or practice-development information – can be shared and disseminated.

US-based law firms have resisted having dedicated PSLs because of both cost and cultural issues. In a recent survey of AmLaw 50 and AmLaw 100 by Lisa Keller of Hunton and Williams, she found that about 80 per cent and 70 per cent of those respective law-firm groups have official KM initiatives. In its broadest term, those firms had to have any one of the following: a chief knowledge officer; a director of KM (or similar) position; a KM department or people with KM in their title; a KM budget; or at least one lawyer spending 50 per cent of his/her time on KM activities. However, the average number of full-time PSLs for even the largest of US law firms is around one.

The UK counterparts enjoy a much higher number of PSLs. That may be due to the historical reliance of the UK practice system on PSLs from the time when there was no technology. The effectiveness of the UK system is measurably greater than that of its US counterpart, however not necessarily its return on investment (ROI).

To a great extent, the UK law firm closely resembles an educational institution as associates move up the ranks and hence there is a greater sense of satisfaction by making ‘learning’ a significant part of the practice of law. Both the KM technology and, more so, the human element are major drivers in the process. Is this why there is less of a defection by lawyers to other professions in the UK? Is the client served as efficiently as in the US system? Will we see a mandate from US-based managing partners and practice-group leaders to allow working lawyers dedicate valuable billable hours to KM? Is this a problem that the right technology should be able solve?

KM leaders from several large US firms, who recently gathered at Ark Group’s ‘KM for the Modern Law Firm Conference’ in Chicago, reported in many cases that associate hours spent in support of KM initiatives are being counted towards typical hourly requirements. That is a welcome change, but it is not as ‘hands-on’ and as ‘human-element’ focused as the UK approach. At the same time, on the other side of the ocean, there have been recent discussions that the UK system of PSLs is too costly and does not use technology efficiently. For example, Freshfields, one of the KM leaders among UK law firms, is reducing its number of PSLs through automation with a long-term goal of combining knowledge management, business development and marketing initiatives all under one roof.

One of the most successful systematic approaches towards solving the intellectual-capital preservation and dissemination challenge (what I refer to as holistic KM, or the US response to the UK model) is the basic ‘Teach Me How to Fish’ model of Reed Smith University. Reed Smith University is a collaboration between Wharton School of the University of Pennsylvania and Reed Smith, one of the largest of the US-based firms. Now in its third year, the Reed Smith University is a semi-structured curriculum with a focus in five areas: law, leadership, practice development, professional support, as well as technology. It is an example of the ingenuity of the leading US law-firm managing partners, business leaders and educational system, and it focuses on one thing: the human element and its desire for knowledge sharing. Instead of focusing on KM in a separate vacuum, Reed Smith approaches it in the context of an overall strategy for educating lawyers.

KM initiatives are successful when they produce meaningful, measurable and visible ROI. Contrary to attempts to correlate realisation rates and profitability to KM in order to justify the investment in KM, there are no standard metrics for measuring KM ROI. One could argue that ROI can be measured by analysing the effectiveness of knowledge transfer from the expert to the knowledge seeker using such systems. In the case of law firms, the demographics of knowledge seekers as lawyers go through the ranks are very well defined. There is typically a clear and well-defined partnership track, which includes practice development and mentorship programs. Many firms, such as Wilson Sonsini under the direction of Chris Boyd, have successfully rolled their KM initiatives into professional-development initiatives and manage them under one umbrella. This may be as close as one can get to the UK system or to Reed Smith University without significant investment in people and resources. In any case, KM defined in the context of lawyer work product is only a small portion of the KM mosaic. KM integrated into a holistic program to preserve and share knowledge, and to develop all skill sets of lawyers, may be a more effective approach. ROI can then be measured in the context of lawyer satisfaction with such programs, and KM will receive the human attention it needs to succeed.

Self propagating and viral knowledge
With their recent popularity, the structure of social and viral networks such as YouTube could serve as an effective and interesting model to share intellectual capital and manage knowledge within a controlled law-firm environment. Although success of viral knowledge initiatives will require large participation by lawyers, it is feasible to achieve. The reason for the popularity of viral networks is the human element and human interaction. Imagine a room full of lawyers; although they will not be able to agree on a single issue, the collective amount of knowledge that can be shared and transferred is virtually unlimited. Sheppard Mullin’s CKO, Tom Baldwin, has had great success and exposure with his firm’s law blogs to share and disseminate knowledge. The value of Baldwin’s success story is not only realised internally by lawyers, but has further served as a great marketing tool to bring in potential clients. As knowledge preservation and sharing technologies improve, sophisticated applications will be transparent and invisible to lawyers. In an ideal world, successful technologies will balance the human element and the technology, except that the technology will be hidden.

Managing partner and knowledge management
Managing partners and practice-group leaders play a critical role in support of their firm’s intellectual-capital preservation and knowledge-sharing initiatives. Whether it is through the use of technology, structured curriculum, viral networking or just a simple discussion over lunch, it is increasingly important to preserve and expand on the collective intellectual capital of firms. As many aspects of the practice of law will become commoditised, the value of high-value intellectual capital will also increase. It is just as important to concentrate on utilisation ratios, billing realisations and profitability (which are short-term success measures), as it is to measure long-term success elements and strategic plans. KM in its broadest definition and in the context of business and strategic planning will be a critical success factor among leading law firms.

Ali Shahidi is chief technology officer at Alschuler Grossman LLP. He has sixteen years of experience in information-technology management, most of which have been focused on use of technology in professional-services organisations. This article was written in connection with a recent presentation at Ark Group’s ‘KM for the Modern Law Firm Conference’ in Chicago about the empirical results of KM initiatives at Alschuler. Ali Shahidi can be reached at ashahidi@alschuler.com.