Above and Beyond KM

A discussion of knowledge management that goes above and beyond technology.

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This publication contains my personal views and not necessarily those of my clients. Since I am a lawyer, I do need to tell you that this publication is not intended as legal advice or as an advertisement for legal services.
  • William D. Henderson is a professor at the Indiana University Maurer School of Law; Director, Center on the Global Legal Profession.

    [These are my notes from the 2013 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I've made any editorial comments, I've shown those in brackets.]

    NOTES:

    • What’s Wrong With Law Schools? In the current approach to legal education, professors have an amazing amount of autonomy to create and deliver their courses. The result too often is law students with uneven educations who may lack the necessary problem-solving and collaboration skills. (There are some obvious parallels to how law firm partners operate.)
    • Change Management Basics.Change often doesn’t come about until people believe that they are standing on a burning platform and, therefore, they must take action. Interestingly, Henderson’s poll of the audience indicated that only one firm present believed that their platform was burning. [Only one!!!] As for the rest of the firms represented, they were willing to admit that perhaps their platform had caught fire. Without a sense of urgency, how can there be a drive for change?
    • Why do we lack Urgency? (1) There has been too much prosperity for too much time. (2) Law firms noticed that clients were willing to pay for senior talent. So law firms have beefed up their senior ranks and stripped their junior ranks. Henderson calls this leveraging older talent. However, this is not sustainable over the long-term. To begin with, older lawyers are a finite resource. Further, while firms pursue this strategy, they deprive themselves of a deep bench. Worse still, while this strategy is in place, law firms give themselves too much time to make a lot of dumb business decisions.

     

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  • Bruce MacEwen is president of Adam Smith, Esq. LLC and president, JD Match. Bruce is an influential blogger at Adam Smith Esq. and author of Growth is Dead.

    [These are my notes from the 2013 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I've made any editorial comments, I've shown those in brackets.]

    NOTES:

    • Excess Capacity. There is a an excess supply of law school graduates. There simply are not enough jobs for them. The national average is approximately a 2:1 ratio of new JDs to jobs. A recent NALP survey shows that summer associate programs are 51% lower now than 10 years ago. Citibank estimates that the firms that bank with them have about 6% excess capacity.
    • Impact of 2008 Recession. When you have a recession driven by a credit crisis, it takes much longer to recover. GDP per capita declines by 10%. (Compare this to the dot.com bubble recession, which was an equity-driven recession.)
    • Law Firm Pricing. Law firms are following the path of other desperate industries. They engage in suicidal pricing (depressing prices to the point that they no longer make money). For examples, see the department store industry, the airlines industry, the automotive industry.
    • Empowered Clients. Clients are finally waking up to the fact that they can make choices when it comes to their law firms. Sometimes this means moving to lower cost firms. Sometimes it means handling matters internally for much longer. Sometimes it means disaggregating services so they source services from a variety of providers who offer more favorable pricing. The law firm can no longer depend on a steady stream of business.
    • Advice to Managing Partners. (1) Focus on Innovation. This means you need to create a culture that allows you to produce a lot of ideas. Most will fail, but some will work. Set aside 20 hours of revenue annually for a research and development budget. (2) Focus on Firm Management. Get lawyers out of the business of managing law firms. Instead, bring in management professionals. And, while you’re at it, banish the term “non-lawyer”!
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  • “We’re here to tell you that size matters.”

    This is how we began a presentation today on Big Data. I had the pleasure of presenting with Maura R. Grossman, Counsel at Wachtell Lipton, Rosen & Katz, and Chad C. Ergun, Director, Global Practice Services & Business Intelligence, Gibson, Dunn & Crutcher.

    [These are my notes from the 2012 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those.]

    NOTES:

    • What are the Hallmarks of Big Data? Some refer to the three “Vs” while others refer to the five “Vs.” All are agreed that Big Data has the attributes of huge Volume, Velocity and Variety. In addition, some would add issues of determining the Veracity and Value of the data.
    • What’s the Big Challenge of Big Data? We’ve been spoiled over the last few years — deluded into thinking that we can capture useful data, cram them into spreadsheets and then analyze them at our leisure. However, as data grow, that approach becomes increasingly unviable. According to the IDC, less than 10% of Big Data is structured data. That leaves over 90% that is unstructured content such as social media streams (e.g., Facebook, Twitter), video and images, mobile data (e.g., GPS), text messages, emails, documents, IT and operational data, transactional data, search engine data and sensor data. Our simple little spreadsheets can’t begin to handle this variety of data, much less make sense of it. Further, we can’t manually populate and analyze these spreadsheets quickly enough to keep us with the high speed at which the data are created.
    • Why Bother with Big Data? A recent McKinsey Global Institute study identified Big Data as the “Next Frontier.” Andrew McAfee and Erik Brynjolfsson of MIT say in Big Data: The Management Revolution that Big Data can measurably improve productivity and profitability:

    Companies that inject big data and analytics into their operations show productivity rates and profitability that are 5% to 6% higher than those of their peers.

    • Our Clients are Interested in Big Data Client interest and activity in the Big Data arena is growing. You can find many examples of how organizations are using the new insights that come from Big Data analysis: (1) Walmart analyzes 267 million transaction per day in order to stock its shelves more appropriately and profitably; (2) Google tracks flu trends based on search queries relating to flu symptoms; (3) medical scientists are uncovering the genetic and environmental causes of disease; (4) thousands of sensors provide data that helps scientists under the environment and changes in weather; (5) real-time analysis by computers of video feeds helps fight crime.
    • What are the Law Firm Opportunities and Concerns? The most obvious way to use Big Data analysis is in competitive intelligence research. Another possibility on the horizon is to use Big Data analytics to help us understand better the staffing, pricing and profitability of matters. Ideally, this would be done by searching all the unstructured and structured content within the firm to find the patterns. Another opportunity is in eDiscovery. The problem is that while it may be cheap to store data, it’s is still expensive to conduct an eDiscovery review of that data using current methods and technology.
    • Mashup Magic. Starting with the provocative question “What decisions could we make if we had all the information we needed?” the audience brainstormed to create a list of new data mashups that could solve law firm business problems. Among the suggestions were: (1) analyzing unstructured content to help uncover possible client conflicts; (2) analyzing emails to identify trending topics; (3) analyzing financial data filed with the Securities and Exchange Commission to find early warning signs of financial distress (or even bankruptcy) of current or potential clients; (4) comparing government economic data with initial public offering pricing data; (5) recording, indexing and analyzing phone calls to find opportunities for cross-selling; (6) comparing pitch document contents to pitch success rates; (7) comparing the content of pleadings with matter success rates; (8) comparing weather data with sales data in your law firm cafeteria.
    • What’s the Future of Big Data? For those of you who thought Big Data was a passing fad or a science fiction fantasy, think again. Surveys of senior business leaders indicate that Big Data is one of their primary strategic concerns. In fact, a recent McKinsey survey found that 60% of the CEOs and CIOs contacted believe their companies should use Big Data analytics to generate insights regarding customer preferences. Meanwhile, spending for Big Data is set to rise:

    Big data will drive $28 billion of worldwide IT spending in 2012, according to Gartner, Inc. In 2013, big data is forecast to drive $34 billion of IT spending.

  • Final Thoughts.  Used creatively and thoughtfully, Big Data can provide important insights into your firm’s operations and business environment. Our clients are embracing Big Data. Can law firms afford not to?
  • ***********************

    For additional notes on this session, see David Hobbie’s blog post.

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  • The speakers are Gene Berger (Manager of Financial Planning & Analysis, Dechert), David B. Hobbie (Litigation Knowledge Manager, Goodwin Procter) and Richard B. Friedman (Partner, McKenna Long & Aldridge).

    [These are my notes from the 2012 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I've made any editorial comments, I've shown those in brackets.]

    NOTES:

    • How Well-Established is their Alternative Pricing Effort? Even with strong senior support, it is an ongoing effort to bring partners around to the concept of alternative fee arrangements. There are pockets of high activity and other pockets in which AFAs are not even on the radar screen.
    • What was most surprising when they started? There were no legacy data to track client satisfaction and repeat business. From a business planning perspective, one panelist didn’t have the legacy data necessary to determine where future business development (including cross-selling) should occur. One firm had to start with basic matter coding (phase/task coding). David Hobbie noted that there were several different types of data that can be useful and you may already be tracking it. For example, they had a robust matter tracking system that proved very helpful for pricing analysis. They have had to augment this with some manual data mining.
    • Where do they start? At Dechert, they build “shells” that have the basic pricing model based on historical data. Each shell includes the following attributes: legal service line, staffing models, matter attributes (size, complexity, location, etc.). They provide this to the partner to fine-tune. Then they track actuals against budget and complete their forecasting o the basis of the budgets. Goodwin purchased Randy Steere’s budgeting tool, which is handled by administrative staff. Lawyers are given simple Excel spreadsheets into which they insert the requested data.
    • How do you track progress? At McKenna Long, they have a portfolio representation (patent prosecution) on a fixed fee basis. They have a collar arragement in place whereby they track the hourly charges. If those charges are within 10% of the agreed fee, then they will charge the actual fee. If the hourly charges are more than 10% above or below the agreed fee, the next year’s fee will be the actual fee minus the agreed fee, divided by two. In order to manage this, they track charges on a monthly basis and have a monthly conference call with the client to see how things are going. This is a method of risk-sharing with the client.
    • How to avoid going over budget? At Dechert, the partners have dashboards that report matter financial data that are updated daily. In addition, they check monthly to see if there are any unforeseen things that have occurred or are likely to occur and need to be addressed. At ReedSmith, they track the variances weekly and then have a 5-10 minute meeting with the responsible partner to discuss these differences and determine if they need to make a course correction in the way the matter is being handled or in the way the client is paying. Do this midstream. Don’t wait until the end of the month or the end of the matter.
    • What non-obvious things should we be tracking? David Hobbie says it’s important to start by asking the lawyers on the matter, what’s driving the cost. With respect to coding, Richard Friedman says to be careful not to include a “general” or “catch-all” code such as “other” because they obscure the necessary detail. This also means that you need the right number of codes that reflect your practice accurately. What’s the best way to validate codes? Do some systematic spot-checking to review the coding and then discuss differences with the partner responsible for the matter.

     

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  • The panelists are Thomas Kennedy (Partner & Global Head of Knowledge Strategy, Skadden, Arps), Kenneth Bender (Partner, Paul Hastings) and Jack Bostelman (President, KM/JD Consulting LLC and former partner, Sullivan & Cromwell).

    [These are my notes from the 2012 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I've made any editorial comments, I've shown those in brackets.]

    NOTES:

    • Why Are Partners Taking Charge of KM?Ken Bender believes that at the very highest levels of the firm, law firm leaders don’t have the negative personality traits discussed in Sally Gonzalez’s keynote address. His managing partner believes that there will be 15 firms that dominate the international practice of law and that those firms will have a well-developed knowledge management function. At Skadden, they had a change in senior firm leadership (and a McKinsey study), which led them to pursue more intentionally the idea of building a knowledge management effort.
    • Skadden’s KM Approach:For the associates, they are providing productivity tools so that they have the best training and resources to do their work. For partners, they want to provide real-time actionable information to manage their matters and support their client relationships. They also want to integrate this with their client communications. Finally, they want their KM function to be a nerve center that provides information on content and expertise. On the management side of the firm, technology, marketing, professional development report to senior management, but they also have regular meetings with Tom Kennedy and his team to discuss projects. In addition, each practice area appoints a partner who is responsible for KM efforts within their practice area. Their primary focus is their intranet presence. Their executive partner provides senior support for these efforts, which encourages participation by the partners. Skadden actively monitors user activity on practice websites, they also actively manage the efforts of each practice area to build internal support and client-facing work. Their practice group reviews include a KM component, just like they have a utilization component.
    • Paul Hastings Approach:They have hired a director of KM and several practice support lawyers. They also have great top-level support from their managing partner. Ken Bender is leading the effort. (He did not believe that a person from another firm — especially one who was not a partner and didn’t have strong relationships with Paul Hastings partners — would be effective.) Without this high-level leadership, it is hard to get buy-in from the other partners of the firm.
    • Next Steps at Skadden: A major challenge is keeping the focus on KM within the firm. In addition, they want to take more of a client focus so that their data-driven, information-driven approach meets client expectations. They are also investing in technology platforms such as experience management systems.
    • Next Steps at Paul Hastings: They want to develop some systems that they should have had years ago. This includes improving their enterprise search. They are also trying to build knowledge bases for individual practices. These will be maintained by KM attorneys. Their biggest challenge is to get lawyers within the firm to focus on something “beyond what they have to get done that day.”

     

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  • Sally Gonzalez is Global Chief Information Officer, SNR Denton US LLP.

    [These are my notes from the 2012 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I've made any editorial comments, I've shown those in brackets.]

    NOTES:

    • The Nature of Law Firm KM has Changed. The earliest form of law firm knowledge management (pre-2000) focused on know-how, current awareness, professional development and some sharing of know-how and current awareness with clients. The big challenges were getting lawyers to engage and contribute. Once the collection was built, how to maintain it and entice others to use it? If you wanted to extend this approach, how could demonstrate enough value to induce long-term investment in technology and platforms.
    • Lawyer Barriers. If you talk to lawyers, you see several themes emerging regarding why they didn’t want to share their content: knowledge hoarding because knowledge is power, the emphasis on billable hours, client willingness to pay for inefficient work, an unwillingness to expose less than “perfect” materials, political challenges in achieving consensus regarding standard form documents.
    • Lawyer Personality Traits. Based on 40 years of data derived from the Caliper Profile (measuring the generic lawyer against the average college-educated population), we find the following traits: very high levels of autonomy, skepticism, abstract reasoning (which makes them theorize that something can be more perfect), urgency (the need to jump in and get things done now). Meanwhile, they have very low resilience (which makes them highly sensitive to criticism).
    • What Worked? Know-how by trusted committees or highly-respected inviduals (practicing lawyers or practice support lawyers), submission of content by a highly-respected person other than the other, stealth inquiries for knowledge (e.g., enterprise search), promoting ways to share “good enough” stuff.
    • KM during the 2000-2007 Period. During this period, the focus was on Expertise (knowing ourselves and knowing others), the integration of KM and business development. While low personal resilience scores are the norm among lawyers, thus making them ill-suited for business development, personal resilience scores are very high for rainmakers.Query: should law firms cultivate young lawyers with high sociability, even though they may not be the best junior associates. Another challenge is that most lawyers have extremely low sociability scores. This makes it difficult for them to build relationships and to mentor others.
    • KM After 2008. Now KM personnel are asked to move outside know-how collection and into new disciplines: alternative fee arrangements, legal project management, business process improvement, etc. The challenge is that some of these KM personnel are themselves lawyers and, therefore, suffer from the same personality traits as the population to serve. Another challenge is that focus is now on teamwork, but the high autonomy and skepticism, as well as low sociability scores, make lawyers ill-suited for teamwork.

     

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  • Oz Benamram (CKO, White & Case) and Christopher F. Boyd (Senior Director of Professional Services) will present a framework for implementing some of the innovative ideas we’ve discussed at this conference.

    [These are my notes from the 2 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I'm publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I've made any editorial comments, I've shown those in brackets.]

    NOTES:

    • Matter Profiling. Our dream would be to collect this information seamlessly and painlessly over the life of a matter. Unfortunately, that isn’t the reality for most firms. Many firms ask partners to provide this information before they know enough about the matter to be helpful or after they no longer care about the matter.
    • Legal Needs Assembly Lines. The legal industry is one of the few that does not have an established tradition of assembly lines. Rather, we tend to create things from scratch time after time. Nonetheless, if you examine the matter lifecycle, you have a framework on which you can hang some repeated processes. The life cycle starts with the pitch > opening the matter > completing the work > closing the matter > pitching for new work….Throughout this process, you need to manage each stage and that act of management also includes data recorded, work product produced and tools.
    • How to Use the Framework. For each phase in the matter lifecycle, you record data, create work product and associate useful tools (KM and technology). For example, during the pitch phase you record information regarding the prospective client, the lawyers/staff involved in the pitch, competitor information and the outcome of the pitch. The work product created includes company profile, a proposal, pitch slides, a pitch report. The technologies includes a matters database, a proposal generator, etc.
    • What’s in it for me? Earlier, the speakers noted that asking lawyers for information after a matter can be difficult because the lawyers have moved on. At White & Case, they have developed a great way of involving lawyers in providing matter information after a closing. The KM group at White & Case offers to create electronic closing binders. (This is something the lawyers and their clients want.) In the process of doing this, they undertake an after action review that generates useful information for their lawyers and for their clients.
    • First Steps. If possible build a dashboard called “My Matters” that shows each lawyer the tasks and financial aspects of all of their matters. If that is too ambitious, start by managing more carefully how you do the work, showing the tasks for a specific matter. This project management and reporting exposes data that will then compel people to make the necessary corrections.

     

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