Following last year’s World Bank report on the economic case for knowledge management, an article1 in the Harvard Business Review earlier this year helped focus business minds on the practicalities of developing a knowledge management strategy. Written by Morten T. Hansen and Nitin Nohria of Harvard Business School and Thomas Tierney, managing director of Bain & Company, the thesis is that an organisation needs to emphasise one of two distinctive strategies for managing its intellectual assets – codification or personalisation.
The codification strategy relies on persuading individuals to document their knowledge, thus transforming tacit knowledge into explicit knowledge. It requires sophisticated IT systems and knowledge professionals to make captured expertise available to those who need it when they need it. On the other hand, the personalisation strategy emphasises dialogue between individuals: the transfer of knowledge and innovation through one-to-one conversations, meetings and brainstorming. It requires a greater emphasis on directories of experts, building teams of relevant people and the effective use of e-mail and telecommunications.
The commercial advantage to firms adopting a codification strategy lies in the frequent reuse of explicit knowledge (namely, leveraging know-how). For those committed to a personalisation strategy, economic returns accrue to the ability to provide expert, customised solutions at premium rates. The authors argue that trying to pursue both strategies at the same time can be dangerous and they draw on examples from management consultancies, the health sector and computer companies.
The legal sector will readily recognise the two strategies. But does the argument that the firm needs to concentrate heavily on one or other of the two alternatives ring true here?
At first glance it would seem that an investment in a codification strategy would work well for legal practice which is heavily reliant on the document and accustomed to creating a formal record of work. Law firms have internal collections of sample documents or precedents, lawyers generate attendance notes, internal memoranda are used to disseminate practice points and legal seminars are usually documented. It is easy for firms to see that these documents hold knowledge, expertise and best practice and that they can be reused, developed and updated to create new knowledge. However, the legal sector has found that success in knowledge management requires more than codified document repositories. It requires both the creation of a knowledge-sharing culture within the firm and the ability to exploit appropriate information technology and telecommunications.
Since the early 1990s, legal know-how systems have increased in number and sophistication in the top law firms. Many of the earlier manifestations were similar to traditional catalogues: static indexes to internal and external documentation relating to client work. The emphasis of these systems was on codification: classifying and indexing documented know-how contributions to provide easy retrieval when required. These systems could direct the fee earner to past examples of work, similar problems and relevant contacts. However, they could not be dynamic, up-to-date repositories of knowledge.
Today, decreasing costs and wider availability of advanced information technology (in particular, Internet technology) and telecommunications have made it possible to deliver dynamic knowledge management. This makes the call for a clear choice between codification and personalisation less compelling. The most recent developments are concerned with knowledge management in a wider sense, encompassing internal and external information, knowledge and expertise wherever they reside. Here we see the gradual delivery of integrated systems: document management, e-mail, databases of know-how, experts and contacts, client and matter, library, commercial online and Internet sources, plus telephone, voice mail and video conferencing.
Integrated systems can provide the lawyer with almost instantaneous access to relevant, categorised, summarised, know-how and know-who. Lawyers can tap into the firm’s accumulated expertise, use and reuse it, discuss it, enhance it and build on it to create new knowledge. Clients can be given direct access to appropriate know-how through secure extranet facilities.
These advanced systems do not replace the need for personal interaction, nurturing clients and contacts, meetings of legal teams and legal practice groups, brainstorming, education and training programmes and mentoring. Instead, they support and supplement them. They enable the firm to produce work of consistently higher quality, produce it more quickly and efficiently, and to have a clearer understanding of client needs and the markets in which the firm and its clients are operating.
Successful knowledge management strategies must remain very closely aligned to the firm’s overall business strategy and business needs. Within that context it will be clear what degree of emphasis needs to be placed on different technologies and approaches. But whatever the emphasis the knowledge management function must be championed by the most senior levels in the firm as its success is as much about achieving a knowledge-sharing culture as it is about setting up sophisticated IT systems.
Endnote
1.‘What’s your strategy for managing knowledge?’, HBR March–April 1999, pp 106–116.
Jane Henderson is Know-How Systems Manager at Macfarlanes and Vice-Chairman of the SCL London Group. She may be contacted at jmh@macfarlanes.com.
