Straight Talk About Social Media

It's been fascinating to watch the reaction of law firms to social media. Some firms have jumped right in and experimented enthusiastically with the new tools. Others have tiptoed around the edges, exploring their options, but not really diving in. And then there are the firms that aren't going to "do it" until all their peer firms "do it," or who believe that social media doesn't offer them anything they don't already have the old-fashioned way.

For the firm that is skeptical about the usefulness of social media, here is some straight talk (not snake oil) from Kevin O'Keefe, who has been equipping law firms all over the country to participate effectively in the Web 2.0 world. When asked which three social media tools deliver the most bang for the buck, his answer is very clear: blogs, Twitter and LinkedIn.

In his typically direct fashion, here's how he describes the value of these tools:

Blogs? Got to have one. How else can you develop a central place where clients, prospective clients, and the influencers (bloggers, media, and social media hounds) pick up on your passion, philosophy, reasoning, and skill? How do you get seen when people search for info? You think I'm picking a pig in the poke by reading a lawyer profile on a website or Martindale? That's nuts.

Twitter? Single biggest learning, brand building, network expanding, and reputation enhancing tool for me this year.
...
LinkedIn? LinkedIn has won the professional social networking/directory space. The race is over. I get invites from professionals inviting me to join their network elsewhere. Other than LinkedIn and Facebook I ignore them.

So there you have it, straight talk from a man who has been at the forefront of law firm social media deployments. Now, let's hear your questions and concerns. What's holding your firm back from engaging fully with social media?

You Get What You Measure

You get what you measure. This isn't news -- first you decide what you want to achieve and then you design your metrics to let you know when you've arrived. That's good practice and it's the message of my earlier post, The Metrics Mess. Simple stuff, right? Wrong. You'd be amazed how often folks misunderstand where true success lies and, therefore, collect metrics that drive them in the wrong direction.

Let's take the example of the typical law firm. How does it define success? Profits per partner? Long-term client relationships? Employee attrition? Recruiting rates? The reality is that there are many bases on which to judge success. So, what do firms typically choose to track? Billable hours. When you track hours, you send the unmistakable signal that you are interested in time -- lots of time. After all, time spent equals money. However, where in that equation is the notion that time spent well is worth more than money? At the end of the day, you know the cost of the time spent. But, do you know the value to the firm or, more importantly, to the client?

If we defined success as delivering high-value services to clients, what would we track? If we defined success as building value within the firm as an institution, what would we track?

For law firm knowledge management, the issue of metrics is a persistent problem. We've chased various ways of trying to prove return on investment, but with little success. What should we track to show how our efforts provide value to clients and to the firm itself? Until we've conquered this challenge, we can't expect to achieve any real measure of permanence within a law firm. And, that's a problem when the economy is heading south.

The Firm of the Future

Whether you agree with its conclusions or not, you owe it to yourself to read Ronald J. Baker's article in the November 2008 issue of the Journal of Accountancy. That article, The Firm of the Future, makes an interesting case for moving beyond leveraging people hours to leveraging intellectual capital. According to Baker, the formula for success of the Firm of the Past is:

Revenue = People Power x Efficiency x Hourly Rate

Baker argues that we should move away from this tired approach to the formula for success of the Firm of the Future:

Profitability = Intellectual Capital x Effectiveness x Price

In highlighting the contrasts between the two systems, Baker notes:

Micromanagement of knowledge workers is the culture of most firms. Tracking time in six-minute increments, measuring productivity, measuring efficiency, and measuring relative worth all are driven by time sheets. The management attitude that anything that is not billable is not worthwhile has destroyed the intellectual pursuit of knowledge and self-improvement that is critical to the long-term success of every professional knowledge firm.

The examples cited in this article are drawn from the world of accounting, but the parallels to the law firm world are close enough to allow them to be a reasonable proxy. Both professions have come to value headcount and efficiency as the most reliable means to success. In the process, they attempt to sell clients "time," despite the fact that clients are looking to buy solutions not time. From that mismatch comes a persistent disagreement as to the true value of the solutions clients want. By contrast, Baker argues that the real source of wealth in the Firm of the Future is intellectual capital. When the firm is in the business of selling its unique intellectual capital coupled with practical applications of that knowledge, then it is finally offering something clients value.

In his scheme, intellectual capital is not just the knowledge of the firm's workers. Rather, intellectual capital has three components, all of which need to be nurtured in order for the Firm of the Future to realize its potential and be successful:

- human capital (i.e., the knowledge of its people)
- structural capital (i.e., its systems, software, tools and resources that allow it to perform work)
- social capital (e.g., clients, firm reputation, vendor relationships, referral sources, alumni, alliances, networks, etc.)

The implications of this new approach are marvelous for both knowledge workers and knowledge management. With respect to knowledge workers, focusing on intellectual capital and effectiveness encourages managers and knowledge workers alike to value learning and the sensible application of that learning to client problems. This in turn sets the stage for personal growth, creativity and innovation.

The focus on intellectual capital and effectiveness also puts a premium on the tools and methods of knowledge management that facilitate the growth and sharing of knowledge, and assist knowledge workers to improve their personal effectiveness. In one fell swoop, that pesky question of knowledge management ROI becomes a little less elusive.

Ron Friedmann and others have long argued that it would be healthier for firms and clients alike to move to fixed fee or value billing rather than hourly billing. And, advocates of this approach have looked to clients to insist on it. Thus far, few clients have exercised the necessary muscle to bring about this change. However, given the current economic climate, the stars may be aligning in such a way as to make this new approach more plausible and thus more possible.

[Thanks to Dennis Kennedy's dkennedyblog posts on Twitter for pointing out this article.]

Moving at the Speed of Molasses

It doesn't really matter how great your law firm knowledge management team is at creating and planning effective KM projects if the bureaucracy of your law firm doesn't let you get things done in a timely fashion. While all of us have experienced project delays from time to time, one of the most frequent complaints I hear about law firm KM is that it seems to move at a rate comparable to molasses in January. (Of course, there are notable and laudable exceptions to every rule.)

Some may say that the complaints are simply the result of the whining nature of knowledge managers, but that sweeping condemnation really is not fair. Nor is it fair to say that we're suffering from the "grass is greener on the other side" syndrome, since there are too many of us who can tell sorry tales of delayed or abandoned projects. It might be instructive to hear from Neil Richards, who has worked in law firms and who discovered it was a completely different experience to work in a bank:

This recent exposure to life outside law firms has provided a stark contrast as to how things get done, which got me thinking. My experience and the experience of friends who work in law firms indicates that projects and plans take a long time to execute. Simply getting a project up and running can take months.

By way of comparison, my current project has only been on the books for a short time. Internal bureaucracy is squashed, decisions are taken and progress is made on a daily basis. The bank has well over 100,000 employees, easily more than the combined sum of the employees of the top 10 UK law firms.

While a sample of one is neither scientific nor dispositive, Neil's experience as recorded in his blog post, Life in the fast lane, is instructive. And, it probably accords with what we've been suspecting for some time.

So what accounts for the difference between KM in a law firm versus KM in other types of businesses? Is it that a partnership inherently operates differently from a company? Do law firms lack the vision and leadership to get KM projects done? Is it that law firms aren't really geared to operate as effective businesses? Are bureaucratic rivalries more prevalent in law firms? Do IT departments in banks understand the value of knowledge management better than IT departments in law firms?

As with most things, you can't always generalize. It's best to ask these questions in the context of your own firm. How does your law firm stack up against the bank Neil is working for? Can you honestly say that at your firm, "[i]nternal bureaucracy is squashed, decisions are taken and progress is made on a daily basis"? If not, why not?

Perhaps once we have answers to these questions, we'll be able to get a little bit closer to what Neil has had the pleasure of enjoying at that bank:

What I do know is that it’s remarkably more satisfying to work in an environment where one’s own brain is the bottleneck as opposed to the inner machinations of one’s firm, and that means it will continue to be challenging for firms to keep the high-performers within their back-office.

So pay attention to this issue. Neil's experience contains both a warning and a goal. If you can't deliver KM projects in a timely fashion, not only will you have trouble hanging on to the best members of your team, but you and your KM effort will lose credibility within your firm. By contrast, when you're finally at the point where your "own brain is the bottleneck," you'll have hit the sweet spot for law firm knowledge management. And then, the sky's the limit!

Records Mis-Management

Do you know where your records are?

Simon Chester, blogging at Slaw, reports on a disturbing trend of missing government records:

Countless federal records are being lost to posterity because federal employees, grappling with a staggering growth in electronic records, do not regularly preserve the documents they create on government computers, send by e-mail and post on the Web.

Unfortunately, this problem is not confined to government. The flood of electronic information is not being captured effectively by all law firms. Lawyers, legal assistants and secretaries can't stay on top of their e-mail and are falling behind in their efforts to put their electronic correspondence in their firm's records management system.

This is a major law firm knowledge management problem. Not only does this correspondence contain valuable know-how, but in some cases it constitutes an important part of a client's record file. Yet gaps persist and the problem grows in magnitude.

Some firms have tried to address this by making it mandatory to file client-related e-mails in their central records system. Others have encouraged lawyers to do the right thing and have even offered relatively easy tools and training sessions to help with the process. However, far too many firms have effectively closed their eyes to the problem, evidently hoping that it will just go away of its own accord.

Document retention policy? Hardly. But, these chickens will come home to roost some day, most likely in the form of an unpleasant law suit. Is your firm prepared for that eventuality or is it in denial about its records mismanagement? Now's the time to ask the tough questions and implement some sensible solutions.

Overcoming Hurdles to Web 2.0

There are some bright shining examples of web 2.0 implementations in law firms and then there are the vast majority of the web 1.0 firms. While it may be natural for law firm knowledge management personnel in web 1.0 firms to envy their counterparts in that relatively small group of web 2.0 firms, it's not a terribly productive exercise. It's more useful to analyze and address the issues that are holding the web 1.0 firms back.

Ruth Ward, head of knowledge systems and development at Allen & Overy LLP mentions a common web 2.0 hurdle in her article Know-how to network:

Drilling down from firm-wide initiatives, practice and team communities and project spaces have been at the heart of A&O’s Web 2.0 work for a number of years. We have used the same site build for over 50 sites – to improve cross-border communication and collaboration among practice groups and business teams divided by geography and time zones, and to manage business projects and initiatives more effectively. Activity on most of these member-specific sites centres on news, discussions and Q&As on the group blog, but the sites also include a wiki to use as a shared knowledge base or to collaborate on documents and reports and external newsfeeds using RSS and shared bookmarks. Our experience is that these sites work much more effectively than the traditional email, document management (DM) and intranet toolset, and my experience from talking with many law firms and legal departments over the past few years is that most people can immediately see how they would benefit their own business teams – if only they could get the IT buy-in either to buy or build them! [emphasis added]

Is the IT department the stumbling block in your firm? Why? Is it because the knowledge management group has failed to articulate clearly the business case for web 2.0? Is it because the IT folks in your firm are inherently uncomfortable with emerging technology and won't take a risk on anything that isn't widely seen as mature technology? Is it because IT sees the technology as being beneficial only to KM rather than the entire firm? Is it because your IT staff are really dinosaurs in drag? Until you've answered these questions, it's hard to identify a strategy to overcome this hurdle.

Another objection, is that law firm decision makers can't seem to think about social media tools without thinking about teens running wild on the internet. Ruth Ward puts it a little differently:

Social tools and networks can bring real business value, especially in a professional-services setting. But many partners and practices seem to struggle to get beyond their press-led perceptions of Facebook and Wikipedia, and their natural scepticism of blogging.

Either way, this is about managers not understanding that most of us behave differently at work than we do in our social lives. We know that we're expected to conform to specific rules in the workplace and usually are happy to comply in exchange for a paycheck. And, when the occasional renegade mixes up their office staff directory with their personal Facebook page, peer pressure (or a gentle nudge from their supervisor) should bring them back into line.

Another common problem is the natural conservatism and skepticism of lawyers, which often makes them reluctant to be the first to adopt new technology. I call this the Early Adoption Aversion Syndrome (EAASy) , but others might more charitably characterize it as an excessive reliance on precedent. In firms afflicted with Early Adoption Aversion Syndrome, partners and managers invariably ask what peer firms are doing with respect to the particular technology you're trying to implement. This means that an important part of your business case needs to be a good survey of those firms. I'd encourage you to read the rest of Ruth Ward's article to learn about the success Allen & Overy has been having with web 2.0. Doug Cornelius at KMSpace is another great resource for information about web 2.0 generally, and about Goodwin Procter, specifically. Ron Friedmann at Strategic Legal Technology regularly reports on innovative uses of technology by law firms.

We're not quite at the tipping point regarding web 2.0 adoption in law firms. That makes each decision to proceed with web 2.0 tools now critical for everyone in the legal industry. Once the tipping point occurs, the only question law firm managers will be asking of law firm knowledge management personnel is, why did you let us fall behind the competition?

Why Worry About Law Firm KM ROI?

From time to time, law firm knowledge management junkies twist themselves into knots trying to determine the best way of calculating the return on investment (ROI) of knowledge management efforts. I'm as guilty as the rest for engaging in this exercise. A few have suggested that thinking about ROI is not helpful to KM since knowledge management done properly should create client work product more efficiently, thereby reducing the number of billable hours required and the size of the bill presented to the client. For these folks, that's reason enough not to talk too loudly about ROI.

Jordan Furlong has a better approach. In his post, Never mind the billables, he points out that we shouldn't be conflating the cost to the client with the cost to the firm. The client will pay what the client is willing to pay. Therefore, the best way for the firm to protect itself is to reduce its own cost. Then, as the client imposes more constraints on the amount the law firm may charge, the firm can maintain or increase its profit margin by carefully containing its own costs. This is where knowledge management can help. Here's how he describes this:

Every time you reduce your costs, you create an equivalent opportunity in your profit column, because the amount you spend to render a service to your clients has no effect on the value of that service to the client. (It never has.) Your client doesn’t care how much profit you make for yourself; the client only cares that you delivered excellent value in a cost-effective (to the client) manner. How you bill your services is between you and your client; how much it costs you to deliver those services has to be your number-one business priority.

So let's take another look at knowledge management ROI in this context. Granted, for firms that can't think beyond the billable hour, this may seem premature. But for firms with foresight, separating (at least for planning purposes) client cost from firm cost should help open a competitive advantage.

Gen Y's Delayed Impact on Big Law

My post last week on Generation Y versus Big Law and its impact on law firm knowledge management generated a great deal of traffic and some interesting discussion.  Among the commentators was Anna Ivey, who is an expert in law school admissions.  In her post Gen Y, Meet Big Law, she suggested that Gen Y will not have a revolutionary impact on Big Law, at least not initially, because the lure of large salaries (and the reality of mountains of educational debt) will cause them to refrain from making demands that result in material changes in the way Big Law does business.

I agree that Gen Y most likely will not have an immediate impact on big law firms, but my reasons are a little different.  While there are shared tendencies that characterize a particular generation, each generation undoubtedly has within it a reasonably wide range of personalities and experience.  Within that range, there will be people in Generation Y who are bit more like their Gen X and Boomer predecessors and others that are on the extreme far side of Gen Y behavior.  I'd be willing to bet that law firms will tend to recruit from the quasi-Gen X/Boomer end of the range rather than the extreme Gen Y end of the range.  As long as this recruitment is successful, we shouldn't expect to see many meaningful changes in the way law firms are managed or law firm knowledge management is carried out.  However, once that pool of potential lawyers runs dry, things will get interesting.  Big Law is built on the assumptions of the fungibility and high attrition of associates.  If there are not enough Gen X/Boomer types to feed the Big Law recruiting beast, then the beast will have to adjust its diet.   Along with that adjustment in diet will come changes in how law firms are managed as they struggle to accommodate (finally) Gen Y.  

With respect to law firm knowledge management, I wouldn't hold my breath waiting for all those cool web 2.0 tools to be adopted by firms merely on the threat of an influx of Gen Y lawyers.  Remember, we've been trying to sell that line to Boomer and Gen X managers, who are basically unsympathetic to the Gen Y perspective on life.  There is, however, a silver lining to this dark cloud.  As increasing numbers of Gen Y lawyers enter firms, they will be able to demonstrate in a more compelling way what we Boomer and Gen X knowledge managers have been trying to explain:  namely, that they live, work, socialize, dream and problem-solve using social media.  Therefore, if they are to be productive within law firms, it would be more efficient to give them the social media tools they already know and love rather than demanding that they use our tools (which must seem like quill pens to them).  The reason that the Gen Y lawyers will be more successful in championing web 2.0 is that their claims are more authentic.  They actually use the stuff.  By contrast, relatively few Gen X or Boomer lawyers or law firm managers are even familiar with the benefits of social media.  Therefore, most of our arguments are based on hearsay, hype and fear of the impending threat of Gen Y, rather than a belief (grounded in deep experience) in the practical merits of social media.

So, instead of building web 2.0 castles in the air, what should law firm knowledge managers focus on until there is a critical mass of Gen Y lawyers within their firms willing to fight for social media?

Collaboration and Equity

In his recent discussion of Charles Heckscher's book, The Collaborative Enterprise, Larry Prusak notes that while collaboration may be the latest buzzword (with all the attendant shallow writing and commentary that regularly accompanies business fads), Hecksher's book is a material improvement over most of the other available analysis of collaboration. One striking observation is reported by Prusak in the following way:

[Heckscher] knows well that collaboration depends on trust, and trust depends on a sense of shared equity within the organization. In situations of gross disparities of power and compensation how can one expect collaboration? The real class conflict that exists within most organizations strongly inhibits real collaboration.

These notions of "shared equity" and the perils of "class conflict" raise some interesting issues for law firms, which tend to be highly hierarchical and often lack a sense of shared equity between the partners and their employees (including associates and the non-lawyer staff). If Prusak and Heckscher are correct, will it ever be possible for law firms to develop a true culture of collaboration?

Change is Good...You Go First

Change is Good ... You Go First.

That's a great line -- worthy of a great philosopher* (e.g., Dilbert or Garfield or Calvin & Hobbes). And it speaks to a fundamental of human nature. While we objectively may understand that a proposed change will be beneficial, we intuitively resist change. Whether it's because it takes a lot of effort to overcome inertia or because we are inherently conservative, we resist change.

In my last post, Generation Y versus Big Law, I talked about some of the changes that we are told new Gen Y employees will force on their employers. There was even an example of an employer that seemed to be eagerly accommodating the changes required by Gen Y. However, on further reflection, I wondered whether this employer was a harbinger of things to come or simply atypical.

In the context of law firm knowledge management, I discussed the knowledge managers' hope that Gen Y lawyers would prevail in their demands for state of the art technology at work since that was what they were used to in the rest of their lives. As a cautionary note, I pointed to the success (or lack thereof) in implementing meaningful work-life balance policies in law firms. While I acknowledge that this was a little like comparing apples and oranges, since the issues that motivate technology adoption are not entirely identical with those that motivate the adoption of health and welfare policies within a firm, I do believe it is a cautionary tale. Both work-life balance and web 2.0 technologies represent radical departures from the current way of doing things. They require change -- and humans resist change. Law firms tend to be even more conservative than individuals. The question they usually ask when confronted with change is, "what are our peer firms doing?" How quickly do you think those firms will embrace Gen Y change? Ask the human beings that work there.

* If you do happen to know the source of the line "Change is Good...You Go First," please do let me know. It's too good a line to be consigned to oblivion.

Generation Y versus Big Law

I can't wait until Generation Y lawyers start flooding through the doors of big law firms. We're told that just about everything about Gen Y runs counter to the work ethic and environment of these firms. So a showdown is inevitable. It will be very interesting to see which force prevails.

Gen Y is often defined as that group between the ages of 11 and 25. These "millennials" have a very particular view of life, according to a recent article in The Observer, "They don't live for work...they work to live":

Here is a group that has never known, or even witnessed, hardship, recession or mass unemployment and does not fear redundancy or repossession, according to researchers. The result is a generation that believes it can have it all and is not embarrassed to ask for it; a generation that will constitute the majority of the workforce within a decade.

This article goes on to report that prospective employers have decided to bite the bullet and start catering to these employees. For example,

Procter and Gamble has already adapted its recruitment efforts and what it offers to meet the needs of Generation Y. Instead of just stressing higher salaries, this international company is highlighting the opportunity for flexible hours, the chance to work from home, the offer of up to a year of 'family leave' to look after children or elderly parents, and the promise of regular three-month sabbaticals. Similar packages are being offered by companies across Britain.

Does this sound like many law firms you know?

A few of us are lucky enough to work for rather progressive law firms. However, the majority of law firms can't even begin to think about offering packages like that offered by Procter and Gamble. In fact, noted law firm commentator Bruce MacEwen at Adam Smith, Esq. has come to the conclusion that work-life balance in law firms may be nothing more than "a dream for another decade." In his discussion of the report commissioned by Eversheds, "The Law Firm of the 21st Century," we learn that big law firms may be quite resistant to the type of change invited by Gen Y. (This report reflects the views of partners at top firms, as well as general counsel and senior executives at major companies and investment banks.)

Here's Bruce MacEwen's summary of what the report said about work-life balance:

56% of clients and 45% of partners believe more flexible hours are not a realistic solution. More specifically, while 51% of clients believe firms ought to be able to offer a "credible" balance alongside excellent client service (and did not see their demands as part of the problem), 48% of partners thought that work-life balance and top-notch client service are "a contradiction in terms."

And here is Bruce MacEwen's stark conclusion: "Permit me, however, to editorialize for a moment on `work/life balance.' I don't believe you can have it at a top-notch firm."

On the law firm knowledge management front, we've been telling ourselves for months now that once those Gen Y lawyers walk through the door, law firms will have to fulfill our KM technology requests because, after all, these young lawyers will demand it. These kids eat and sleep technology and they simply won't stand to be thwarted at work.

So the battle lines are drawn with respect to work-life balance in law firms. What about the early adoption of new technology? Will we have another generational battle there. And, if so, who will prevail? For law firm knowledge managers banking on the new Gen Y lawyers, you might want to stop and think about the work-life balance at your firm.

[Thanks to Headshift for pointing out The Observer Article.]