Legal Innovation Blog

 RSS

Our Legal Innovation Blog is dedicated to discussing the latest issues involving knowledge management, business development and new and exciting technology developments to use for leveraging your knowledge assets. Under Hot Topics we have gathered more indepth explainations to our approaches to knowledge management, the strategic use of IT and business innovation.

  • 2014-08-20

    Knowledge sharing and KM in law firms

    A new interesting book, "True Partnership as True Learning" about knowledge sharing within the law firm Mannheimer Swartling, has recently been published on the basis of a case study conducted by Anna Jonsson, Associate Professor/Docent at the School of Business, Economics and Law at the University of Gothenburg. The book is based on Jonsson's studies of the law firm and her previous studies of knowledge sharing within IKEA, another successful Swedish company.

    The book provides a good insight to how, and why, knowledge is shared and how sustainable success can be achieved through job satisfaction.

    True Partnership as True Learning

    For both IKEA and Mannheimer Swartling, knowledge sharing as an organisational strategy to achieve an elite identity seems to be a successful approach. Both these companies have a culture of knowledge sharing by the apprentice model: education, training and job rotation and one of the most important fora for knowledge sharing is considered to be the face-to-face meetings, since knowledge is best shared in conversations and in interactions with others (Jonsson page 49). According to Jonsson's study, the success of an enterprise is strongly linked to employee development and the perception that the individual's learning and development is important. For example, at Mannheimer Swartling, education and learning are normal daily tasks for all employees.

    When analysing the concept of knowledge sharing within an organisation, Jonsson identifies three types of logic - professional logic, business logic and Knowledge Management (KM) logic. Being knowledge management professionals, we have focused on her definition and view on KM, which we will further discuss here.

    In the book, Jonsson describes KM "in terms of how to store and organize, in other words to manage, documents" (Jonsson page 41). That way KM is perceived as "IT, database and templates" (Jonsson page 71) and a "hygiene factor for knowledge sharing" (Jonsson page 83). This means, that KM would then only be a minor part of the knowledge sharing concept, simply focusing on the retention of documents. From our point of view though, that is to simplify KM a bit too much. We share the KM definition by Dave Snowden that the purpose of KM is to provide support for improved decision making and innovation, by the effective management of human intuition and experience augmented by the provision of information, processes and technology together with training and mentoring programmes. This is much more than to store and organise documents. It is also more than knowledge sharing.

    When applying KM to a business and looking at knowledge sharing, we agree that the sharing of tacit knowledge - knowledge residing in the heads of people working there - is most valuable, but this can be supported by transferring tacit knowledge into documents than can be more easily shared amongst several people, independent on time and place. These documents can also be further developed into, for example, manuals to standardise the business process.

    The situation in law firms is quite different when it comes to the relation to documents. In many cases the business product in law firms is delivered as a document. It could be a memo describing the legal situation, minutes of meetings or other company documents or an agreement. Documents are therefore an essential part of the legal business and ought to be managed in a systematic way. Mannheimer Swartling has for example implemented an advanced document management solution (DM) as an efficient support for the handling of all their documents. The use of a DM solution for handling documents could be considered a hygiene factor for the legal business.

    A DM solution can also be used as a tool for knowledge sharing and KM, but we do not agree that it would be enough just to implement a document management solution and a good searching engine to have the total solution on KM within the firm (Jonsson page 41). We believe that to support efficient sharing of documents, most relevant documents has to be identified and somehow separated and made more easy available. Otherwise it is troublesome to find the really good examples amongst the loads of documents available. A law firm produces such a vast amount of documents on a daily basis, whereof many can appear to be similar at a first glance. Many agreements are also negotiated in a way that makes them not suitable for re-use, at least now without understanding the context. To further support knowledge sharing, these documents needs some added comments.

    From our point of view, KM in law firms must have different approaches to different parts of the legal work. Besides knowledge sharing, we also consider standardisation an important approach. This approach is applicable on legal work that is considered "low value", and focused on handling such tasks as efficient as possible, reducing the number of hours spent on the matter. Therefore, standard documents and templates are the general results of this approach.

    Some law firms argue that they only do more qualified legal work, but also that kind of work usually includes more simple tasks. For example, a complex cross-border transaction could also include a need to produce some confidentiality agreements and to handle some company registration matters. Both confidentiality agreements and company registration matters are considered to be less complex and suitable for standardisation. Therefore, a law firm ought to have standard documents available to handle these kinds of matters in an efficient and quality-assured way.

    Modern IT solutions can be used to further support standardisation and further reduce the number of hours spent on a legal matter. That way it is possible to really change the way more standardised legal work is being done. According to our experience, the time spent on for example drafting the document suit doing an issue of shares can be reduced from four hours to fifteen minutes by using an efficient IT solution instead of only using templates. This is a time reduction with more than 90 per cent! This is a way of completely changing - or disrupting - the way more standardised matters are being managed.

    From a business perspective, and also a client perspective, this kind of standardisation ought to be a more natural part of the development of the legal business, comparable to initiatives for becoming more efficient in other industries. This way lawyers can focus their time and effort on more qualified work.

    However, in the study, Jonsson describes this kind of efficiency seeking as "a shift away from notions such as trust, collegiality and partnership towards greater manageralism and bureaucracy which favours standardization, assessment and a performance review" (Jonsson page 65). Her resistance to standardised solutions is argued with the risk for exploitation and that traditional KM will "replace the tradition of collegiality and partnership - a tradition that truly builds on knowledge sharing and learning" (Jonsson page 65). Using IT for standardisation to package knowledge into quality-assured document packages is by Jonsson referred to as "experiments" that "can be compared with attempts to mass-produce knowledge" that is not seen as giving any competitive advantage for the firm since such knowledge is much easier to copy (Jonsson pages 92-93). We find these description somewhat troublesome and believe that there might be a slight misunderstanding here. Standardisation is mainly applicable on matters that are already considered low value work; work that does not give any competitive advantages for the firm but must be done correctly and efficient. If this work could be done more quality assured and faster - for example reducing the time spent by 90 per cent - the new way of managing these tasks could give the firm a competitive advantage.

    Gaining a competitive advantage ought to be considered quite important these days when the market for legal services is becoming more diversified and competitive.

    The adaptation to the changing legal market is an ongoing discussion and is currently on the agenda for legal conferences around the world, such as the worldwide Reinvent Law events.

    On Reinvent Law New York in February, Professor Richard Susskind (the well-respected author of "The End of Lawyers?") gave a closing remark where he noted that the legal industry currently is in a state of denial and that by the 2020s, technology will have transformed the way lawyers work.

    Richard Susskind at Reinvent Law

    (Picture The Time Blawg)

    In February Gartner also published a report about the legal industry, predicting a scenario that by 2020 "Smart machines and LPO Radically Disrupt Legal Profession". Using modern IT solutions as smart machines is seen as one viable path.

    Gartner Legal IT Scenario

    Also large international prestigious law firms have taken initiatives to adapt to this new situation.

    A&O Unbundling legal market report

    Allen & Overy, one of the biggest law firms in the world and a member of the UK's Magic Circle of leading law firms, released the report "Unbundling a market - The appetite for new legal services models" earlier this year. The report emphasises the need to separate different tasks to analyse how they can be handled in the most efficient cost-effective way.

    Interviewed general counsels in the US concludes in the report that: "The firms that sit around and think they are going to be able to just continue doing what they have done for the last 100 years are going to become redundant" (Report page 7).

    We believe that supporting the denial within traditional law firms, suggesting that they do not need to use efficient IT tools to change the way legal work is traditionally being done, is a dangerous path. A law firm wanting to survive for the future has to look at ways to really change the way legal work is being done to continue to be competitive. Otherwise new legal service providers will replace traditional law firms handling a large portion of the legal work, thus marginalising the role of traditional law firms.

Blog Archive