The Rise and Importance of Knowledge Management in Law Firms

Mayukh Roy

Introduction

Peter Drucker, the management writer from the USA in his 1959 book, Landmarks of Tomorrow predicted that information would change the way people work. They would generate more value with their mind than through physical labour.[1] He later described such workers of the future as “knowledge workers” – someone who thinks for a living.[2]

Knowledge workers apply theoretical and analytical knowledge to solve complex problems or develop new products or services in their fields of expertise.[3]

The management of these knowledge workers through various processes and tools evolved into the practice of knowledge management.

Definitions

Knowledge is commonly defined as what we know. It involves “the mental processes of comprehension, understanding and learning that go on in the mind, however, they also involve interaction with the world outside the mind and interaction with others.”[4]

Knowledge is different from data and information. According to Gomes,[5] data are ‘simple facts and figures out of context that are, therefore, not directly meaningful.’ For an organization to consider data useful, it must be processed into information by connecting it to a context. Gomes thus believes that information is defined as organised facts and data, which are converted into context for a specific use.[6]

The significant difference between information, data, and knowledge is that knowledge always contains a human factor, as it is regarded as something individuals possess. It has always been the main contributing factor, in the business world, to the excellent performance of an organization.[7]

There are many definitions of Knowledge Management (“KM”), essentially all these definitions state that KM facilitates the transfer of knowledge throughout an organization.[8]

The main goal of KM is to improve an organization’s efficiency and save knowledge within the company. It consists of a cycle of creating, sharing, structuring, and auditing knowledge to maximize the effectiveness of an organization’s collective knowledge.

There are two main types of knowledge that is generally covered within the definition of KM. They are:

1. Explicit knowledge – Knowledge that is documented.
2. Tacit knowledge – Knowledge that is in people’s head.

Explicit knowledge is easy to articulate and communicate, therefore making it less complicated to transfer between individuals and organizations.[9]

Tacit means unspoken, tacit knowledge is hidden, sometimes even from the consciousness of the ‘knower.’[10] Therefore, it is a significant challenge for firms to transform their tacit knowledge into explicit knowledge.

KM in law firms

Law firms and lawyers have been managing knowledge and doing knowledge work ever since the concept of lawyering began.

In every transaction, in every opinion, in every break room discussion, a lawyer is creating and sharing knowledge.[11] Thus, the implementation of a KM practice would be beneficial for a law firm.

KM captures and reuses the lawyers’ collective wisdom. It consists of both processes and systems that identify, save, profile, disseminate, and use prior work and accumulated expertise to solve legal and business problems.[12]

A successful KM practice in a law firm will improve it in many ways. It will ensure that the specialized knowledge of lawyers does not leave with them or go unutilized by other employees who would benefit from that knowledge. It allows for better situational awareness, as well as opening doors for learning about best practices, lessons learned, and overall organizational improvement.[13] In short, KM helps law firms win and keep business.[14]

A framework for KM practice

There are many strategies/ models that can be used while developing and implementing a KM practice. However, the most comprehensive model/ framework which provides all the tools for successful introduction, implementation, and review of the process is the new knowledge management standard published by the International Organization for Standardization (“ISO”) on October 31, 2018, as ISO 30401:2018 Knowledge management systems – Requirements.[15]

The scope of the standard is to set requirements and provide guidelines for establishing, implementing, maintaining, reviewing, and improving an effective management system for knowledge management in organizations. Further, the requirements of this standard apply to any organization, regardless of its type or size, or the products and services it provides.[16]

This standard can be used by law firms as a framework for implementing KM. It can act as a base, if KM is being introduced in the firm for the first time, and contribute in improving the firm’s implementation and use of KM.

The standard lists 19 topics that need to be fulfilled to have an ISO 30401 compliant knowledge management system. The topics are as follows:

1. Objectives
2. Issues
3. Parties
4. Requirements
5. Priorities
6. Scope
7. Knowledge development
8. Knowledge flows
9. KM enablers
10. Key commitments
11. Policy
12. Action plan
13. Implementing actions
14. Roles and responsibilities
15. Awareness
16. Communication
17. Minimum documentation
18. Conformance and performance
19. Process control and improvement

Of these, six topics are definitional, four relate specifically to KM implementation planning, and nine relate to quality control processes and metrics.[17]

Unless a law firm is keen on certifying itself as an ISO 30401:2018 compliant organization, the above topics serve as a ready-made framework for planning the implementation of KM system in a firm. The definitional topics could enable the senior management to decide on the path it wants to take towards the implementation of KM practice in the firm. In the implementation stage, the four topics related to KM implementation planning, would not only provide guidance but also act as a project planning tool. Finally, the nine topics related to quality control processes and metrics would provide the pathway for course correction and continuous improvement of the KM system.

Importance of KM in current scenario

One of the consequences of the current pandemic on law firms has been the increase in reliance over technology for conducting its business. This inter-alia includes conducting virtual conferences with clients, conducting webinars for both internal and external stakeholders of the firm, and lastly, a collaboration between members of the firm. This transition would have been easier for firms that already have an existing KM practice. As stated earlier, KM facilitates the transfer of knowledge throughout an organization; therefore, firms would already have established a practice/culture for collaboration. Also, work would already have been done (from an IT standpoint) to implement technologies for continued collaboration between members of the firm.

Conclusion

In conclusion, developing a KM practice in a law firm is based on its size, maturity, and availability of resources and therefore is different for different law firms. However, inter-alia some initiatives such as an intuitive searchable central repository (database) which contains documents (articles, agreements, contracts, checklists etc.), a dynamic taxonomy policy to complement the central repository, a document submission policy, an email management policy, and lastly a matter management policy needs to be put in place to run a smooth transfer of knowledge throughout the firm.

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Mayukh Roy, our Advisor, is a Legal Professional having over 12 years of experience in Legal Knowledge Management and Legal Outsourcing. He can be reached here.

Views are personal.

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Notes:

[1] Peter Drucker, Landmarks of Tomorrow (Harper 1959)

[2] Peter Drucker, The Effective Executive (1st edn, Harper & Row 1967)

[3] ‘Knowledge Workers – Who They Are And What They Do’ (Corporate Finance Institute, 2020) <https://corporatefinanceinstitute.com/resources/knowledge/other/knowledge-workers/&gt; accessed 8 June 2020.

[4] Wilson T, ‘The Nonsense Of ‘Knowledge Management’ (Informationr.net, 2002) <http://InformationR.net/ir/8-1/paper144.html&gt; accessed 8 June 2020

[5] J.F. Gomes, ‘Knowledge Infrastructures In New Product Development’ (International journal of new product development & innovation management, 2002) 4(2), 143-155

[6] ibid

[7]Stefane, M. Kabene et al, ‘Knowledge Management in Law Firms’ (2006) (1) The Journal of Information Law and Technology <http://go.warwick.ac.uk/jilt/2006_1/kabene/&gt; accessed 8 June 2020

[8] ibid

[9] Madhavan, Ravindranath, and Rajiv Grover, ‘From Embedded Knowledge to Embodied Knowledge: New Product Development as Knowledge Management’ (1998) Journal of Marketing, vol. 62, no. 4, pp. 1–12. JSTOR <www.jstor.org/stable/1252283> accessed 8 June 2020

[10] Wilson T, ‘The Nonsense Of ‘Knowledge Management’ (Informationr.net, 2002) <http://InformationR.net/ir/8-1/paper144.html&gt; accessed 8 June 2020

[11] Matthew Parsons, Effective Knowledge Management For Law Firms (Oxford University Press 2004)

[12] Ron Friedmann, ‘A Brief Overview Of Legal Knowledge Management – Law Practice Management – United States’ (Mondaq.com, 2018) <https://www.mondaq.com/unitedstates/strategic-planning/419126/a-brief-overview-of-legal-knowledge-management&gt; accessed 8 June 2020

[13] ‘What Is Knowledge Management? Its Importance And Benefits’ (Valamis, 2020) <https://www.valamis.com/hub/knowledge-management&gt; accessed 8 June 2020

[14] Ron Friedmann, ‘A Brief Overview Of Legal Knowledge Management – Law Practice Management – United States’ (Mondaq.com, 2018) <https://www.mondaq.com/unitedstates/strategic-planning/419126/a-brief-overview-of-legal-knowledge-management&gt; accessed 8 June 2020

[15] ‘ISO 30401:2018’ (ISO, 2018) <https://www.iso.org/standard/68683.html&gt; accessed 8 June 2020.

[16] ibid

[17] Stephen Bounds, ‘Evaluating ISO 30401 Standard: Part 3 – What Are The Mandatory Requirements?’ (RealKM, 2019) <https://realkm.com/2019/04/17/evaluating-iso-30401-standard-part-3-what-are-the-mandatory-requirements/&gt; accessed 8 June 2020.