The issue of knowledge management (KM) has been discussed in professional services firms for some time, and many of them have made great efforts to address the problem. While some of these projects have been successful in terms of delivering their objectives, very few have achieved a firm-wide view of information and knowledge.
Projects in the KM area tend to focus on the classification of legal documents, primarily the banks of precedents used by firms, in order to make it easy for lawyers to retrieve them. Typically, these projects set out to classify documents according to a hierarchical taxonomy covering the law in some detail. This taxonomy may be developed in house, or it may be based on a bought-in template such as those developed by Derek Sturdy and Christine Miskin. Coupled to this detailed legal view of the content, documents are also often grouped by the key practice areas or services of the firm.
Another area of classification already addressed in law firms is the client and matter-related system used in the document management system. In general, this is limited to just that: the client number and the matter number, along with information about the author and the type of document.
The marketing department often groups the firm’s contacts by industry sector, and will try hard to gather this information as part of the marketing element of the client inception process. This form of classification is used to drive the selection of contacts for mailings and invitations to events, as well as to help with analysis of marketing activity across the firm.
Finally, the accounts department will have a strict classification of clients, usually by type of work and also related to the departmental divisions of the lawyers employed by that firm. The latter allows detailed analysis to be made of the performance of different areas of the firm and divides a larger firm into small enough units for setting targets and budgets.
Given these starting points, what is the best way to get more value out of the information held in the firm’s systems? Is it possible to gain competitive advantage through careful use of KM and classification?
The answer to this is clearly yes, but many firms struggle to make this advantage a reality. Part of the problem is in the approach that is taken, which comes out of the nature of law firms and the document and book-based nature of their work. To understand this it is best to consider the first part of KM as an exercise in tagging the data held by the firm with additional information.
Items of data
Using the standard systems used by a firm as a basis, we can identify the key sets of data that can form part of the knowledge of the firm:
· staff (lawyers)
· non-client contacts
· clients
· matters
· client documents (relating to matters)
· reference documents (eg precedents).
The last two of these items have the greatest visibility to lawyers, and as such tend to be the focus of KM projects. Some projects extend this to the include classification of matters, on the principle that this information can be inherited by documents produced for that matter.
The real value of a KM system is not however in the ability to identify the subject of every document or other item of data, but rather in the ability to be able to relate sets of data together and identify links that would not otherwise be apparent. In other words it is more effective to get a basic consistent classification across the whole set of data owned by the firm than to get a detailed classification on a small subset of that data.
Tagging
Tagging items of data is simply the process of marking them with the appropriate categories from standard lists. Most firms already have in place many of the required lists and do not actually need to do much work on these to implement a good KM system. In fact, the core of KM can be established with just one or two categorisations, although added value can come out of extending this. The key information tags that need to be added are the legal service, or what the firm is delivering, and possibly the industry, or what the client does.
Additional information may be added to particular types of data, as outlined at the beginning of this article, but these are primarily to support specific activities such as financial reporting rather than tags that add value to the data.
The only extra information that may need to be added is to make sure that appropriate links are in place between the key systems, and that these exist in such a way that they can be used by the computerised systems. The link between documents and clients/matters is likely to exist already, but links between the client as represented by the accounts system and the set of related contacts held in the marketing systems may be more problematic to get in place.
Legal service category
This categorisation forms the backbone of the classification of information in the firm, simply because it is the explanation of what the firm actually does. It is important to note that this is not the list of departments in the firm, which are an administrative division for management purposes, or even the practice groups within these departments.
The list of legal services is the list of subjects that clients may approach the firm to help them with, such as company mergers or writing a will. How detailed this list needs to be will depend entirely on the firm, so no two lists will ever look the same. As a rule of thumb, each item in the list should form a substantial amount of the work for a few partners, or the total amount for one partner if it is a specialist area. If the service is something that is done very occasionally it should be included in a broader service. As an example, private client work in a largely corporate firm may be defined as single legal service, whereas in a specialist firm services may be defined at a much lower level including tax planning, probate, conveyancing and matrimonial.
Once this list of services has been defined, all work coming into the firm should fit easily into one of the categories without the need for an ‘other’ or ‘miscellaneous’ option. As well as matters (and hence the documents for them) the legal service should also be a logical way of dividing up the precedents to group them in small sections in order to make them easy to reference by lawyers. Finally, contacts (and existing clients) can be identified with the services that they could buy from the firm, or that the firm would like to sell to them.
Legal subject taxonomy
The legal subject taxonomy approach used by most document based library style KM projects does have a value, especially in large firms with very large precedent base. The real value comes in being able to take standard sets of documents, news items and other types of information and assign them to the appropriate legal services. To do this there needs to be a definition of the link between the legal services and the subjects that they cover. For example, a set of information on some aspect of property law may relate to separate services of both residential conveyancing and commercial conveyancing. There are a number of advantages in taking this approach, the most important being the ability to re-use information in more than one service area; the ability to use bought-in data classified against a detailed standard; and the ability to simplify the problems caused if the list of legal services is changed at some point in the future.
The level of detail required will depend on the areas of work the firm covers, and the volumes of information it handles (which are both related to the size of the firm)
A ‘quick-win’ KM project
For firms that have not started on any KM projects, or those that have spent lots of money and time on a KM project that does not seem to have delivered results, a quick win can be obtained very easily that will provide a firm basis for improving the firm’s knowledge and for building more complex solutions in the future.
This project is simply to define the set of legal services that the firm offers, and apply it to all of the key systems, so that the marketing database/CRM system, the accounts/PMS system and the document management systems can all store and present this information.
Once this is in place, and client appropriate client and matter numbers have also been added to most of the types of data, a very consistent firm-wide view of the knowledge in the firm can be obtained. For every service offered, there will be a list of a small number of lawyers who specialise in that type of work, a manageable list of precedents and other supporting information, a list of clients for whom the firm has done that type of work and a list of clients and contacts for whom that service would be appropriate but who have not yet bought it. In addition, the service definition will provide access to a longer list of documents prepared for other clients on the same type of work.
This fairly simple project can therefore help lawyers organise their documents, help identify the people with the knowledge hidden away in their heads, and also help promote cross-selling and targeting of work. If improvement can be made in all these areas, the project can be considered a success.
Summary
Knowledge management projects deliver the most value when they are as broad as possible, and not when they are deep and detailed.
To deliver results, firms should concentrate on adding classification to the data they have where they can cover as many different types of data as possible, and then put in place the tools that allow this data to be viewed across the different systems in which it resides.
Only when some categorisations exist across the whole dataset of the firm should more detailed classifications be added in specific areas.
The biggest advantages come from defining the business of the firm as a series of legal services that it offers to clients. These do not need to be the same as the public lists as they are defined for internal use, but there should be a clear link between the legal services categories and the marketing message given out.
Legal subject taxonomies are best used as a way of adding a level of abstraction to the legal services, rather than as a categorisation in their own right.
Adam Westbrooke is the managing director of Firstcourt, a strategic IT solutions company specialising in helping professional services firms. Further information on recommended classifications can be found on the website at www.firstcourt.co.uk. For more information call Adam on 0870 350 3660.
