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!

Twitter Discipline

I've taken the plunge. Yesterday I decided that I couldn't publish another post about Twitter without trying it out for myself. So here I am 24-hours later -- a Twitter neophyte. Luckily, I've found some kind guides in @dougcornelius, @stevematthews and @jackvinson. Thank you, gentlemen.

A single day does not an expert make. Nonetheless, one of the first things that struck me as I tried tweeting today was that Twitter's 140 character limit can be a real challenge. This, of course, led me to the following conclusion: every lawyer should be encouraged to tweet. Regular use of Twitter would teach the discipline of being concise. No more run on sentences. No room for legalese. More short, declarative, pithy phrases. For those of us who endorse a Plain English approach, this is nirvana.

So based on my one day's worth of experience, I'd suggest that we start promoting Twitter in our law firms. If we're really lucky, it could change legal writing for the better. (Okay, I admit that I'm getting a little carried away here. Chalk it up to the enthusiasm of a beginner.)

For others interested in taking the plunge, here's a great introduction to Twitter by Meg Roberts, with some helpful links to get you started.

Why Bother with Web 2.0?

As discussed in my post, Overcoming Hurdles to Web 2.0, the rate at which law firms have adopted web 2.0 has not been impressive. There seems to be a great deal of organizational resistance to giving up the "command and control" approach to knowledge management and moving to a more dynamic, grassroots approach. And, because of the slow rate of adoption among law firms, law firm knowledge managers can't even point to the Web 2.0 successes of many other law firms in order to goad their own firm into implementing social media tools. In this environment, it's easy to ask "why bother with web 2.0"?

If your firm is stuck in the KM 1.0 rut, take a look at the impressive results of a shift from KM 1.0 to KM 2.0 at Cap Gemini. In his post, From CoLLection to CoNNection, Jon Husband reports on a presentation by Yves Noble at KMWorld & Intranets 2008 in which he recounts the fantastic success of Cap Gemini's adoption of web 2.0.

The post contains Jon's live-blogging notes, so it is in sound bites rather than paragraphs. Nonetheless, it contains some real gems. Here, for example, are the notes on Cap Gemini's situation under the KM 1.0/"Collection" model:

Problems with old KM Solution ?

Plenty of good content, well-organized, well-structured - but people did not use it

20% year-over-year decline in use

Average age [of] document in the system 3.5 years

7 years to refresh knowledge content (wow, papyrus grows faster than that)

Complex and confusing for non-experts

Many disconnects between tools, processes and the organisation

Costly infrastructure

And here's what happened when they switched to using web 2.0 tools and a "Connection" model:

Speed and scope of adoption (official deployment has not yet started)

27,00 registered users

900 communities

500 forums

500 wikis

250 blogs

.. and have not spent even $1.00 in “communications” thus far

Remember these are the results before official deployment! It's enough to make most folks in law firm knowledge management bright green with envy.

Take a closer look at this presentation. It covers everything from the state of their old system, through the long process of moving minds and implementing new tools, to their stunning results. The Cap Gemini experience is a great answer to the question "why bother with Web 2.0."

Yves Noble provides a valuable road map. Follow it!

Knowledge Management Blogs

Who needs caffeine on a Saturday morning if you can have a Knowledge Jolt instead? I was about to put the kettle on this morning and stopped to check my Google Reader. That's where I found Jack Vinson's post, A Study of KM bloggers, in which he reports on a recent "explorative study" by Pumacy Technologies that analyzes metrics on a variety of knowledge management blogs.

Looking at the month of August, they considered frequency of posting, number of comments, Google page rank and Alexa rankings. (There may be other criteria as well, but we'll have to wait for Pumacy Technologies to explain further.) In any event, they've provided a list of over 50 KM blogs, sorted by blog activity.

Since I'm always interested in finding new KM blogs to add to my personal reading mix, I decided to click through to take a look at the blogs Pumacy Technologies identified. For regular KM blog consumers, most of the names on the blog list will not be surprising. Some of the best and most active commentators in this discipline are on that list. For example, Jack's blog shows up as #11. What surprised me was that Above and Beyond KM was on the list as well as #15!

A closer look revealed that some good KM blogs were not on the list. While we don't have a complete explanation of the study criteria from Pumacy Technologies, a quick review of the list indicates that they seemed to be tracking blogs that cover knowledge management generally as opposed to highly specialized knowledge management blogs.

In any event, do take a look at the list. You'll find some well-known, well-established KM bloggers there. However, you're also bound to discover a few new KM bloggers who have interesting things to say. So explore the list, read the blogs and join the conversation.

Above and Beyond KM began on January 21, 2008. Thanks to Pumacy for giving me this great way to celebrate 8 months of blogging.

Hitting the Twitter Wall

It's a sad commentary on life in a web 2.0 world when a successful social networker discovers that there's an inverse relationship between the size of her network and the quality of her network. Corvida, guest blogging on Chris Brogan's blog, recently disclosed that she's decreasing her connections while increasing her network. And it's not a good thing. Here's how it works: when she had no more than 400 (!) followers on Twitter, she claims she was able to make real connections with them. As she put it,

I knew who the majority of my followers were, thereby enabling me to utilize Twitter to its maximum potential. I was able to connect, refer, analyze, and reflect on what I was getting from my followers.

Unfortunately, Corvida has been a victim of her own cybersuccess. Here's her description of her current sorry state:

Now, I couldn’t tell you who half of my followers are. I really don’t know who I’m following and who I’m not following. I don’t even know why certain people are following me. In turn, my conversation on Twitter has deteriorated along with the amount of time I used to spend on Twitter.

Corvida has hit the Twitter Wall. She can grow her network of followers infinitely, but she can't sustain a human connection with all of them. When this happens, it leads to some perfectly predictable results: a loss of energy, a loss of interest, a loss of enjoyment.

There's a limit to the number of meaningful relationships any human being can nurture on a regular basis. While web 2.0 tools provide an easy way to make contact, that ease can also get in the way of focusing on the relationships that matter. We've been swept up in the allure of easy connections and they are cluttering our lives.

That's when we hit the Twitter Wall or the Facebook Wall or the LinkedIn Wall. At that point, what exactly do you do with the 500+ or 1000+ people who think they have a claim on you? As Corvida points out, now we've got a problem:

We don’t have a clue on where to begin to make deeper connections as our networks continue to grow. In turn, things may just get out of hand. You start adding people just because they added you with no desire to establish a real relationship with anyone that you haven’t already befriended beforehand.

Corvida wonders if we just need better electronic tools? I don't think so. What we need is a bit more focus and discipline. (These are key to any successful personal knowledge management effort.) While size matters with respect to certain issues, quality matters much more than size if you want a meaningful social network. Perhaps someday someone will come up with a great (open source) social media tool that ensures quality relationships within a network, but until then we'll have to do it the old-fashioned way: identify the folks that matter in our lives and then focus on developing a meaningful relationship with them.

It's either that or face an extended period hitting our heads against the Twitter Wall.

Thought Experiment #2: The Perfect Law Firm KM Program

In yesterday's post I discussed the value of thought experiments (in the right hands) and outlined a thought experiment that could help you break out of a rut in your law firm knowledge management program. Today, I'd like to propose another horizon-expanding thought experiment.

What if you could start your KM program from scratch and had the ability to create the perfect law firm KM program by cherry-picking the best elements from the KM programs of other law firms?

- Which elements would you choose?
- Why?
- What changes would you make to adapt them to your environment?
- What changes would you make to improve their functionality?
- Which elements of your own KM program would you keep?
- How would you enhance them?

This is not intended as an exercise to feed the green-eyed monster that sits on your shoulder. Nor is it intended to send you into the depths of depression. The point of this exercise is to get you thinking critically about what a great KM program in your law firm could look like, drawing on the successes of your colleagues. This should help you with goal setting and priority setting. There's a wealth of knowledge management experience in your peer firms. This is a way to gather those riches and analyze them objectively, with a view to improving the offerings of your own law firm knowledge management effort.

If you don't get past the wish list phase of this thought experiment, you won't get much value from the exercise. You really need to push your analysis to be sure you understand what makes a law firm knowledge management program great and what would make that great program successful in your law firm. With that knowledge, you can move a substantial distance on the path to running a KM program that your colleagues in other law firms would love to steal.

Thought Experiment #1: The KM R&D Budget

Thought experiments are a useful tool for trying things out for size, before you actually commit money and resources. Of course, they aren't always as highly predictive as a well-designed pilot, but they can be very valuable -- in the right hands. If you don't believe me, ask Walter Isaacson who made the following observation in his biography about Albert Einstein:

Based purely on thought experiments -- performed in his head rather than in a lab -- [Einstein] decided to discard Newton's concepts of absolute space and time. It would become known as the Special Theory of Relativity. [And, resulting from this thought experiment, he proposed an addendum in which] he posited a relationship between energy and mass. Out of it would arise the best-known equation in all of physics: E=mc2.

Now, don't get me wrong. You don't have to be Einstein to perform a successful thought experiment. You just need to set aside a little time and really probe a question (or group of questions) to see where the answers lead you. It's not necessarily about finding a single solution as much as it is about sensing a new direction and opening new vistas for your planning

So here's today's thought experiment: What if you had a knowledge management R&D budget?

(And what, you might ask, is a KM R&D budget? It's an amount of time, money and resources set aside for research and development, which in our case means to try new tools and techniques in a sandbox before you get to a proof of concept or pilot. It's a way of expanding your horizons and seeing if an approach that's worked elsewhere will work in your environment. It's an experiment without a huge price tag. It's a chance to do an end run around the mandatory six to 18 months of IT business analysis so that you have some relevant evidence on which to build your business case. It's a chance to explore, a chance to play with purpose.)

So let's resume the thought experiment: What if you had a KM R&D budget?

- how much would you need?
- how would you justify it?
- what would you do with it?
- who would you involve?

To do this right, you should set aside at least 20 minutes to think this through. At a minimum, it will be diverting. If you're lucky, this thought experiment could push your knowledge management effort in a whole new and productive direction.

As was once said, the only difference between a rut and a grave is the depth. Save yourself from the rut (and an early grave) by indulging in this thought experiment often. It might well give you and your law firm knowledge management effort a new lease on life.

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.

Information Overload is a Cop-Out

Clay Shirky has fired a shot across the bow of every person who ever complained that they couldn't get things done because of information overload. He suggests that our current approach to the Internet has infantalized users. As he points out, there have always been more books in any given bookstore than you can read in one sitting. So how do you deal with it? You make choices based on quality, price, needs, interests and personal taste. Now contrast that with the multitude of materials to read on the Internet? Do we make intelligent choices? More often than not, we abdicate personal responsibility and resort to complaining about information overload. The main difference between the bookstore and the Internet is the price of the information presented. Now that we have access to a vast array of free information, we can't use the price filter. However, there is nothing about the virtual information source that relieves the consumer of the necessity of making choices based on the other filters of quality, needs, interests and personal taste.

For some, law firm knowledge management's answer has been to spoonfeed the lawyers by using administrative staff and tech tools to scour the resources, make editorial choices, and then pass on the cream of the crop to the lawyers. And, we lawyers have enjoyed the service, while complaining when those editors don't quite make the right choices. However, the minute the editor (virtual or real) disappears, the lawyers find themselves on the wrong end of the firehose of information with no personal tools for managing the flood. This creates a class of people who know how to consume fish, but haven't been taught to fish. That's failure of knowledge management and information technology training. It's a place where basic instruction in personal knowledge management can yield great dividends.

Continuing the fish metaphor, Clay Shirky says, "we are to information overload as fish are to water. It's what we swim in." So, from his perpective, it's time we stopped bemoaning the existence of our information environment and started paying closer attention to the filters we use. His advice: whenever it feels like you're drowning in information, stop and take a look to see if you can identify which of your information filters just broke. And, my advice? None of this works if you don't have a sensible set of personal information filters. So the onus is on you to find and use tools that tailor the information to your interests, needs and tastes. While law firm knowledge management can provide lawyers with some basic personal KM training and help identify useful tools, each individual lawyer has got to quit the moaning and start taking personal responsibility for the quality and quantity of information they process daily.

You can't (and probably don't want to) stop the information flow. All you can do is manage it effectively so that it doesn't wrestle you to the floor every day. Good luck!

For more on this topic, see the video of Clay Shirky's presentation.

[Thanks to Gina Trapani for pointing out this Shirky presentation.]

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?

Putting Blinders on to Enhance Productivity

Do you remember the conversations we had within law firms when we began to consider permitting desktop access to the Internet? Everyone focused on the potential loss of productivity. To be fair, that can be a problem. You don't have to walk far in any office to find someone surfing the net. Equally, you don't have to walk far to find someone using e-mail or the telephone for personal business during business hours. Regardless of the type of technology tool (e.g., the web, e-mail or the phone), people can always find non-business ways of using that tool.

Nonetheless, withholding technology for fear of productivity losses is a little like trying to put blinders on your people to keep them focused on work. The problem is that while this strategy works with horses, it's considerably less successful with people. Never underestimate the creativity of a person determined not to work.

As various enterprises now consider bringing the benefits of social media tools within their firewalls, they can be overly-concerned with the negative aspects of social networking and fail to appreciate the potential productivity gains. As reported by Atul Rai in IBM and Social Networking, while IBM had some initial qualms about productivity losses resulting from new social media tools, the powers-that-be decided that the risk was no greater than the normal tendency to have conversations over the water cooler or in the hallway about nonwork-related topics. Now that IBM has deployed social media tools to wide acclaim, they've discovered that the tools don't interfere with an employee's ability to meet work goals. In fact, the tools have provided significant productivity benefits.

This seems like a good point to suggest that instead of withholding tools in an attempt to force employees to focus on work, we should take a closer look at what really allows people to work well.

In a recent series of posts, Daniel Pink reported on an interview he did with Cali Ressler and Jody Thompson, authors of the book Why Work Sucks and How to Fix It. In their book they propose a Results-Only Work Environment (ROWE). According to Pink, key features of a ROWE are: "people show up to the office when they want, meetings are optional, and nobody’s watching the clock." (This is a far cry from most offices.) The bottom line is that "each person in an office environment is free to do whatever they want, whenever they want, as long as the work gets done. " [emphasis added]

One common worry raised by critics is that employees won't be able to handle a ROWE (i.e., they aren't grown up enough to be responsible for their own time and performance). Here's how the authors respond to that criticism:

... how do you know that some people can’t handle ROWE? Don’t assume what you don’t know. If you and your employees work on the clear expectations that are expected in order for them to keep their job, then set them free to reach their outcomes. Worrying that some people can’t handle ROWE is a waste of time. It’s paternalistic thinking that just doesn’t have a place in the 21^st century. We’ve found that there is so much productivity being left on the table in companies because managers are orchestrating everything according to their liking. Unleash the untapped potential around you – it’s waiting to come out!

In a law firm that charges by the billable hour, there is a natural fixation on time and how that time is spent. Further, many law firms tend to be populated by inherently conservative people who have a hard time thinking about radical changes to their work style or work environment. However, if we could look past the billable hour for a moment, we'd realize that in a ROWE it doesn't matter if a wonderful tech tool also provides a handy distraction since it's ultimately up to the individual employee to meet their performance goals in a timely manner. Therefore, as long as the firm provides useful tools, it's the employee's responsibility to use those tools wisely -- or not. In this way, the employer gives up the nanny role and gets to spend more time setting strategy, hiring good people, and then letting those people loose to meet strategic goals.

This should be the new mantra for law firm knowledge management and information technology specialists: instead of micromanaging employees to make them work, just articulate clear expectations and performance goals, provide great tools, and then set them free to work as they see fit. Don't shy away from web 2.0 technology simply because you are concerned about the social aspects of the tools. When you try to put blinders on your people, you fail. Instead of hampering their ability to goof off, you hamper their ability to work. In effect, instead of blinders, you're putting handcuffs on them. Now how is that conducive to work?

The More Things Change

From time to time, this blog discusses various constant elements of human nature. Usually, we focus on the unwillingness of folks to do what they don't want to do and why this affects the adoption of new technology tools or knowledge management systems. The last few days and weeks have reminded us that there are other aspects of human nature that don't ever seem to change. If you're not sure about this, take a look at the following excerpt from a congressional report:

“During the post­war decade some 50 billions of new securities were floated in the United States. Fully half or $25,000,000,000 worth of securities floated during this period have been proved to be worthless. These cold figures spell tragedy in the lives of thousands of individuals who invested their life savings, accumulated after years of effort, in these worthless securities. The flotation of such a mass of essentially fraudulent securities was made possible because of the complete abandonment by many underwriters and dealers in securities of those standards of fair, honest and prudent dealing that should be basic to the encouragement of investment in any enterprise. Alluring promises of vast wealth were freely made with little or no attempt to bring to the investor’s attention those facts essential to estimating the worth of any security. High­pressure salesmanship rather than careful counsel was the rule in this most dangerous of enterprises.” **

This report wasn't written this week -- it was written during the Great Depression. Nonetheless, it resonates in a week where we've seen large financial institutions fail and unimaginable turmoil in the capital markets.

One of the functions of KM 1.0 is to capture and make available for reuse helpful information objects. Consider this post my knowledge management contribution to the inevitable post-mortem report that is yet to be written. Congress can entitle the report, "The more things change, the more they stay the same."

[** Source: H.R. Rep. No. 85, 73rd Cong., 1st Sess. (1933).]

Constructive Destruction

A commentator on the economy described our current travails as "constructive destruction." Clearly this optimist believes that good will come out of our economic troubles. In some ways, this is not dissimilar to the fertilizing benefits of a forest fire. Short term pain for long term gain.

Since law firms are so dependent on market forces, it is a rare firm that can ignore the economic turmoil around it and continue with business as usual. For law firm knowledge management departments, there will undoubtedly be a period of retrenchment as everyone tries to hold the line on budgets until we have more clarity about the direction of the economy. This gives law firm knowledge managers a couple of choices: you can grit your teeth and trim where you think you'll feel the least pain OR you can take the opportunity to engage in a little constructive destruction.

Constructive destruction, in this context, means identifying programs that may be working decently, but not optimally. Consider what would be required to get them to optimal operations. And then consider whether that is an investment worth making, regardless of current economic conditions. If the answer is yes, make the investment. If the answer is no, kill the program. That's the destruction part of constructive destruction.

The harder part of constructive destruction comes with being constructive. Here are a few ideas to get you pointed in the right direction:

1. Before you destroy a program, make sure you've milked it for all the learning it can offer. There's absolutely no need to repeat your mistakes.

2. Once you've destroyed a program, be sure to redeploy the newly-free resources to achieve something better. Don't let them just lie around.

Painful though it may be, constructive destruction is an approach used regularly by Mother Nature and, it appears, by market forces. Try applying it to your KM program and see what benefits accrue.

Twittering Inside the Firewall

Are you tempted by the idea of Twitter inside the firewall? For true Twitter junkies, it may be nearly irresistible. And, now, we're hearing about some new Twitter-clones that are designed to operate within enterprises. However, before you start pushing this as the next big thing for law firm knowledge management, consider the following: What existing workflow or tool will Twitter replace or enhance within your law firm?

In my earlier post, Are You Creating Problems or Solutions, I discussed the negative repercussions of pushing a tool versus identifying a current way of doing things that could be done better with a little technical assistance. In the case of Twitter, it could be an obvious substitute for IM. However, how many law firms have overcome their record retention questions and discovery phobia to the extent that they have actually implemented a robust IM program? If your lawyers are not IMing now, why would they start Twittering?

Alternatively, if you are in one of those rare firms where the lawyers unfailingly inform their assistants exactly where they may be found at all times, a Twitter-like tool could be a nice enhancement. However, if your lawyers tend to wander off at will, why do you think Twitter will change that behavior?

For more issues to consider before you promote a Twitter clone within your law firm, see Lee Bryant's helpful post on the Headshift blog, It's like Twitter, but for .... (For those of you who have read this far, but aren't entirely sure you understand what Twitter or Microblogging is all about or how it might operate within a law firm, take a look at the following post by Björn Negelman (recommended by Lee Bryant): Microblogging as a Corporate Tool.)

Now, before you start jumping up and down, let me be clear. This is not intended as a screed against technology generally or Twitter (or Yammer or ESME or laconi.ca) specifically. It is just a reminder that no technology is a silver bullet. As knowledge management experts will tell you time and time again, you need the right people and processes in place first or else your new tech toy will fall flat on its face.

Consider yourself warned.

Update: See also Jevon MacDonald's post, Will you Twitter inside the enterprise and Jeremiah Owyang's List of Enterprise Microblogging Tools: Twitter for the Intranet.

Law Firm KM Reality Check

It's hard not to feel a little hung over after a weekend binge that included Hurricane Ike, the collapse of Lehman Brothers, the sale of Merrill Lynch and the potential restructuring of AIG. As we return to our offices this morning and our safe debates about taxonomy and technology, web 1.0 vs web 2.0, mandatory participation in knowledge management efforts vs incentives for voluntary KM participation, it's a good time to remember why we do what we do: to ensure that the right information is in the right hands at the right time so that decision makers can make better decisions. After the past weekend's binge, it's hard not to wonder about the quality of decision making that preceded the debacle. It may be years before we learn (if we ever do) whether any of these firms or the government agencies involved (i.e., the Federal Reserve and the Treasury Department) had viable knowledge management programs and what impact those programs had.

Law firms aren't immune from the hubris that seems to affect the financial sector and we certainly suffer the effects of the decisions made on Wall Street. In light of that reality, we should take a second look at our law firm knowledge management programs. To the extent we even can "manage knowledge," are we working with the right knowledge? Do the decision makers actually use our resources? If the answers to either of those questions is no, then you need to ask why. In times of turmoil, it's more important than ever to be relevant. If knowledge management isn't in the thick of things and making a difference, then why are we doing what we're doing?

How Leadership Makes a Difference

If you've got a generous budget and an appropriately-sized, energetic, motivated and productive staff, you can stop reading now. Clearly you've got more assets than most knowledge managers and must, as a result, be achieving great things in the world of knowledge management. If, however, you aren't so fortunate, you might want to read further.

In this political season (or as one of the presidential candidates called it, this "silly season"), there's a lot of talk about leadership. Unsurprisingly, much of that discussion is superficial. When you look back at some great leaders in this country, you realize that some of the talents they brought to the table are innate and simply cannot be purchased or developed. For example, George Washington was universally known as a great leader and, undoubtedly, that reputation was due to more than the mere fact that he was often the tallest man in the room. However, while having an imposing physical size was not sufficient, it certainly was helpful. Unfortunately, that's exactly the sort of asset that is hard to purchase or develop. A different kind of asset is the moral compass Abraham Lincoln had or the personal courage Theodore Roosevelt had. While they may have been flawed men in many ways, they also had enormous strengths that ultimately made a huge difference in how they led and what they accomplished for this country.

For the purposes of this discussion, however, it's useful to put Franklin Roosevelt front and center in your mind. The manner in which he led involved methods that can be developed in adult life. Furthermore, we are learning now that some of these methods are critical to good leadership in modern enterprises. Here are a few of these methods for your consideration:

How you deliver the message matters as much as the message itself

In day to day leadership, one of the most critical things you do is communicate what's important and how it is to be accomplished. What isn't always understood is that the way you communicate matters as much as (if not more, sometimes, than) the message itself. Looking back at FDR, he was very careful in his public appearances to project vitality, strength and optimism. But this was not just for show. Most of us, after all, have fairly good personal radar for detecting insincerity. Rather, he was able to project these things successfully because he believed them himself, truly embodied them, and had great faith in his overriding purpose.

Bruce MacEwen of Adam Smith Esq. reports on a study that compared the results of communicating a positive performance review accompanied by negative body language (e.g., frowns, narrowed eyes, flat voice, etc.) with communicating a negative performance review accompanied by positive body language (e.g., smiles, nods, good eye contact, open hand gestures, etc.) What the study found is striking: people who received positive reviews delivered with negative body language felt worse about their performance than people who received negative reviews delivered with positive body language. The latter felt encouraged and capable of making improvements. This study puts a premium on intentionality and clarity in leadership. You need to be sure that you are coherent and consistent in what you say AND how you say it.

Leadership is about more than achieving personal acclaim

By the time he became president, FDR had already been governor of a great state and had all the benefits of having grown up in one of the country's leading families. He really didn't need to burnish his résumé. Unfortunately, too many business "leaders" are in it for the glory and not as many have a cause truly worth fighting for. FDR had several Herculean tasks, including bringing the country out of the Great Depression and curtailing fascism. Are you working for anything more than your ego and your résumé?

Leadership means developing the best in others

One of the hallmarks of FDR's leadership was that he understood that historic times required historic efforts. To that end, he called on the people of the United States to give more than the they thought they could give and be more than they thought they could be. History tells us that they answered that call.

FDR clearly understood that at the end of the day, leadership is not about you, it's about the people you serve and lead. We now know that there are also some compelling business reasons for focusing on them rather than on yourself. An exhaustive study at Bell Laboratories followed the career trajectories of engineers in an attempt to identify the traits of star performers and determine how to recruit and retain the best engineers. In his paper, "Are We Selling Results or Résumés?: The Underexplored Linkage between Human Resource Strategies and Firm-Specific Capital," William D. Henderson reports that what they found was striking:

- researchers found no relationship between performance and various social, psychological, and cognitive abilities, such as I.Q
- higher productivity among knowledge workers was attributable to several distinctive work strategies that were teachable
- controlled experiments showed large and persistent productivity gains for engineers who completed the training program, with women and minority workers posting the largest increases [emphasis added]

What this suggests is that building a great team depends less on recruiting stars, and more on how you develop the people who work with you. A great leader will take the time and make the effort to ensure their team learns the "distinctive work strategies" for success that the researchers at Bell Labs found were "teachable."

In knowledge management, as in politics or any other discipline, good leadership is a rare asset. Those of us who have it will be ahead of the pack. The good news is that even members of that pack can develop some of the attributes of good leadership. And, when they do, we'll all be much better off.

9/11 and Knowledge Management

It's cloudy today here in New York City. Even though the sky is not the bright, sparkling, optimistic blue it was early in the morning of September 11, 2001, there are plenty of other reminders of the events of that day.

In the aftermath of 9/11, we learned that the government in fact had much of the information that it needed to be aware of and counteract the 9/11 plot. However, some of that information was located in silos and protected by departmental rivalries. According to the 9/11 Commission's Report:

The FBI did not have the capability to link the collective knowledge of agents in the field to national priorities.
...
The missed opportunities to thwart the 9/ 11 plot were also symptoms of a broader inability to adapt the way government manages problems to the new challenges of the twenty-first century. Action officers should have been able to draw on all available knowledge about al Qaeda in the government. Management should have ensured that information was shared and duties were clearly assigned across agencies, and across the foreign-domestic divide. ... The U. S. government did not find a way of pooling intelligence and using it to guide the planning and assignment of responsibilities for joint operations involving entities as disparate as the CIA, the FBI, the State Department, the military, and the agencies involved in homeland security.

If there was ever an instance in which knowledge sharing and collaboration could have made a difference, that's the one.

If we are fortunate, we'll never again have to face so grave a test of our government's knowledge management capabilities. If we are wise, we'll take the lessons to heart and do something to increase the culture of collaboration and knowledge sharing within the government and within our own enterprises.

Since 9/11 and Hurricane Katrina, some have spent time thinking about how to improve knowledge sharing and thereby improve our ability to respond to disasters and emergencies. David Bray, a doctoral candidate at Emory's business school, is one such person. On 9/11, he was the information technology chief for Bioterrorism Preparedness Response Program at the U.S. Centers for Disease Control and Prevention (CDC). In that role, he saw first-hand the KM failures within the government. This experience deeply informs his research. Here is a glimpse at what he is studying, as reported in Knowledge @ Emory:

“I saw several instances where this workforce of 1.2 million government workers, not counting contractors—which is probably another 800,000—had significant disconnects. In fact that’s what the 9/11 report specifically comes out as saying: the United States did not connect the dots across multiple agencies,” explains Bray, currently a doctoral candidate at Emory University’s Goizueta Business School. “There were times with our program where we knew something at the trench level, tried to pass it up the hierarchy, but unfortunately it never got anywhere. Events like Hurricane Katrina, 9/11, anthrax, occur in part because organizational structures in which we trust, particularly for government—but also for most large businesses—aren’t built to respond quickly to turbulent environments,” contends Bray. “And now, in part because of globalization and also because of technology, things can change so quickly half a world away.”

In his paper “Exploration and Exploitation: Managing Knowledge in Turbulent Environments,” Bray, along with Goizueta co-author Michael J. Prietula, a professor of information systems and operations management who also researches responses to disasters, develop a theoretical model about knowledge management in organizational hierarchies. Bray extends an existing model of exploration and exploitation to consider the context of multi-tier hierarchical firms faced with environmental turbulence, and then considers whether a knowledge management system that enhances knowledge exchanges across the organization alters the ability of the organization to match the conditions of a turbulent environment. Bray’s model considers different management approaches, such as a bottom-up cultivation strategy or a top-down command-and-control strategy.

“We wanted to explore whether having a top-down or bottom-up strategy would help or hurt organizational hierarchies when faced with environmental turbulence” says Bray. “We specifically were testing the idea that while top-down hierarchies may be great at command and control and maintaining internal control and reality, they’re bad at addressing a changing outside environment; a change in the marketplace, a change in competition, or an emerging national security threat.”

Bray’s research finds strong evidence that top-down hierarchies that stress command and control are ineffective in managing knowledge in turbulent environments because they decrease a hierarchical organization’s ability to maintain accuracy with its outside environment. [Emphasis added]

The work of David Bray and Michael Prietula suggests that bottom-up collaboration and knowledge sharing is the most effective way of keeping knowledge silos and human rivalries from hoarding critical information in times of change. And, because of the culture of collaboration, this sharing allows us to make better decisions and respond more effectively to the unexpected.

On the anniversary of September 11, 2001, it's good to know that we've actually learned something and are headed, albeit slowly and fitfully, in the right direction.

When KM is Supported by the Top Brass

Most knowledge management treatises and guides will tell you that it is hard to carry out an enterprise wide knowledge management program without the full support of senior management. Unfortunately, within a lot of enterprises the members of senior management are sometimes those least likely to understand or use a KM system. Therefore, their support can be theoretical and that gets communicated to the rank and file as a lukewarm endorsement. It doesn't take a rocket scientist to guess how the rank and file react to a mandate from above that doesn't seem to have any teeth.

With respect to law firm knowledge management the problem is widespread. The senior partners or administrative partners will certainly understand on paper the potential benefits of a knowledge management program. They may even remember back to the days when they were junior associates facing a new assignment without models or practice guides. However, they've come a long way since then and have platoons of associates under them who deal with those issues firsthand. And, with that distance comes a loss of urgency to pursue knowledge management.

Another problem that arises in law firm knowledge management occurs when senior lawyers have acted on their natural tendencies to create order out of chaos and have developed personal knowledge management systems that increase their own efficiency. Even when presented with a reasonably-effective firm wide knowledge management system, they are often reluctant to give up their own tried and true approach.

Finally, there's the culture of most law firms: an aggregation of people who are fiercely autonomous and largely introverted; people who wish to practice law, but don't always want the bother of running an efficient business. These folks cherish their independence and only grudgingly submit to community edicts and systems. It's hard to sell KM systems to these lawyers until you've answered adequately their fundamental question: what's in it for me?

I'm still working on effective solutions to all of these problems, but found it instructive to look at a case in which the "top brass" truly supports the KM program. The top brass I have in mind are senior managers in the US Army. In his article, Army Retools Knowledge Culture, Brian Robinson reports that the Army has taken a decisive move away from its 2001 position of focusing its knowledge management efforts on information technology. They have now decided they need to broaden their focus to encompass people and culture, process, and technology -- in that order. Further, they are taking the radical step of moving away from a culture that fiercely protects the security of information to a culture that emphasizes openness and information sharing:

The culture has historically protected information closely and released it on a must-know basis. Now, Army managers need to learn to see broad information sharing as a natural military skill.

“It’s all about increasing collaboration, and that has huge implications for warfighters,” said Bob Neilson, knowledge management adviser to the Army’s chief information officer. “It’s about not only sharing information but having the responsibility to provide knowledge across the enterprise.”

The 2008 knowledge management principles adopt the move to collaboration that is increasingly prevalent in society:

The creation of a collaborative culture is embedded throughout the list of 12 principles and was the major rationale for the expanded approach to knowledge management that Army Secretary Pete Geren and Chief of Staff Gen. George Casey offered in a memo they sent in July introducing the principles.

They firmly embrace an Army enterprise perspective, they wrote, and “will create an Army where good ideas are valued regardless of the source, the existing knowledge base is accessible without technological or structural barriers, and knowledge sharing is recognized and rewarded.”

All in all, this Army initiative contains a great deal that civilians could learn from and follow. Pay particular attention to the 12 principles articulated in their policy. They would be as apt in a law firm or any other enterprise. The only catch is that in the Army, senior management really appears to understand and endorse effective knowledge management. And, when the top brass speaks in the Army everyone listens. Those are benefits not all of us can claim.

Do You Have What it Takes to Collaborate?

Basic web 2.0 allows us transparency, a window into another's life. Multiplied over many people, web 2.0 helps them connect with each other and strengthen an existing or emerging social network. Providing these connections is helpful, but it isn't collaboration. True collaboration is more than just getting along. It's working together towards a common goal. Unfortunately, in this world of competitive achievers, it's hard to find someone who really knows how to collaborate.

Like many other things, collaboration is an orientation as well as a set of skills. Deciding to be more intentional about collaborating is a good first step, but it takes more than that. According to Shawn Callahan at Anecdote, there are seven critical personal skills necessary for effective collaboration:

1. "How to apologise
2. How to advocate your point of view without harming your collaborator's feelings
3. How to spot when a conversation gets emotional and then make it safe again to continue meaningful dialogue
4. How to listen and get into the shoes of your collaborator
5. How to define a mutual intent that will inspire action
6. How to tell and elicit stories
7. How to get things done so you have something to show for your collaboration"

Based on this list, collaboration requires more than mere technical knowledge. It requires drawing on sometimes dormant interpersonal relationship skills -- listening, empathy, consideration, etc. These are skills that have been undervalued within businesses for far too long.

So take a close look at this list of necessary skills and then take a closer look at yourself. Do you have what it takes to collaborate?

[My thanks to John Tropea's Delicious links for alerting me to Shawn's blogpost.]

So You Think You Should "Command and Control"?

For too many years, law firm knowledge management has focused on centralized efforts to capture and disseminate "knowledge." Under this approach, knowledge is a thing, an object that must be found and corralled. And once you've found and organized all those knowledge things, you then tackle the daunting task of wresting tacit knowledge out of the heads of your colleagues and into your databases.

David Jabbari at Allen & Overy describes this effort in the following way in a recent issue of Law Practice Today:

"If you see knowledge as an inert ‘thing’ that can be captured, edited and distributed, there is a danger that your KM effort will gravitate to the rather boring, back-office work preoccupied with indexes and IT systems. This will be accompanied by a ritualized nagging of senior lawyers to contribute more knowledge to online systems."

That's the job too many law firms have assigned to their knowledge management team. If you're a practice support lawyer (PSL) in such a firm, how's it working for you? David Jabbari describes this approach as "command and control":

"The command and control approach to law firm KM focuses on the systems and management structures needed to capture and publish knowledge. In this approach, knowledge is often created in a very centralized way, using techniques such as commissioning, or forming ‘project groups’, and then publishing the output in centralized content stores. The fact that no more than 25 per cent of material stored in databases is ever accessed does not seem to deter people from thinking that placing material in a central store constitutes a success of some type."

It sounds like a futile exercise, yet it is standard operating procedure in far too many law firms. In fact, there are regular conversations among many PSLs I know about the difficulties inherent in creating or finding materials for centralized databases, or the struggle involved in getting client-facing lawyers to take the time to create, review or share useful materials for the KM system. For these PSLs and for their law firms, success is measured by the number of documents created and centrally stored. The metrics give a comforting sense of doing something, but don't establish definitively that they are doing something useful.

With the emergence of web 2.0 and social computing, many of us have come to understand both the power of collaborative knowledge creation and sharing, as well as the ultimate futility of trying to capture the explicit and tacit knowledge within the firm. David Jabbari suggests that this move from control to collaboration allows us to focus on more productive goals:

"If, however, you see knowledge as a creative and collaborative activity, your interest will be the way in which distinctive insights can be created and deployed to deepen client relationships. You will tend to be more interested in connecting people than in building perfect knowledge repositories."

Allen & Overy is enjoying tremendous success pursuing collaboration rather than control. How does your firm compare?

[Thanks to Mohamed Amine Chatti for pointing out this article.]

True Leaders Value Mistakes

It's a natural human tendency to run from failure. In our understandable need to avoid pain, we try to put it behind us and move on. (The more cynical would say, we sweep it under the carpet, shrug, and move on.) While I'd be the last one to recommend that we should wallow in misery, it is useful to remember from time to time that the main point of experience is to learn and grow. And, it is hard to learn and grow without a little reflection and analysis. Reflecting on your successes may give your ego a brief boost, but that in and of itself doesn't always equip you for the next challenge. Reflecting on your mistakes can, if you're careful about how you uncover, analyze and handle the information.

Nancy White at Full Circle Associates makes this point in her post, Learning from our mistakes, in which she reports on the remarkable after action review undertaken at Amazon after an embarrassing technical failure. What comes through her report is the integrity and decency inherent in the way Amazon handled what could have been an opportunity for upset, abuse and unhappiness in the hands of less skillful managers and a less mature organization. Their object wasn't to find fault, but to learn. As Nancy White observes:

"Pulling our mistakes out and looking with them, alone and with the aid of colleagues, is a simple and effective learning practice. But it takes both a personal commitment to productively looking at our warts (rather than simple self-flagellation or guilt) and an organizational culture that values learning along with success. And we all know it… we learn more from our failures than our successes."

I can't stress enough the importance of leadership in this exercise. Every child knows how to deflect blame and finger point. That isn't an effective after action review. That's an exercise in avoiding responsibility. In Amazon's case, the participants appear to have assumed responsibility and then taken the next vital step: they understood that this responsibility required them to learn from the event sufficiently to avoid repeating their mistakes. Very few of us do this without the right leadership. I don't know who at Amazon led this effort, but I do commend them.

Leaders help us rise above our natural tendencies and move us along the path to doing the right thing for ourselves and for our organizations. However, this isn't a isolated action. Well before the mistake occurs, a good leader will have put in place an organizational culture that emphasizes the importance of innovating, going out of our comfort zone, and taking reasonable risks. Above all, a good leader understands that innovation inevitably involves mistakes. A great leader knows how to use those mistakes to yield the maximum advantage (in terms of lessons learned and growth) for their team and their enterprise.

When you're dealing with an organization that faces liability if it doesn't reach the right result every time in a predictable, controlled fashion, mistakes take on an even greater importance. Consequently, there can be a tendency to sacrifice innovation and growth for predictability and control. In that environment, mistakes are barely tolerated and rarely encouraged. The problem is that an organization without mistakes is an organization without innovation and growth.

In our drive to avoid mistakes, we don't always spend enough time learning how to react to mistakes in a manner that is productive. Therefore, when we do respond, it is often in an ad hoc way that doesn't take advantage of the tremendous opportunity for growth presented by mistakes. The good news is that response patterns to mistakes are learned responses and can be improved -- provided participants know they won't become scapegoats or pariahs. Looking to cases like the Amazon after action review can provide some guidance on a better way to learn from mistakes, grow, and achieve greater success.

You Haven't Missed the Train -- Yet

With all the flurry in the blogosphere and blawgosphere about web 2.0 and social media tools, it's easy to believe that you are the last Luddite left standing without a Facebook friend, LinkedIn connection or personal blog. Fear not -- you have lots of company. According to a recent global survey by Synovate, 58% of the population is clueless about social networking. Steve Garton, Synovate's global head of media research reports:

"We spoke with over 13,000 respondents aged 18-65 years in 17 markets around the world to find out who's connected and who's not, as well as attitudes and online behaviours. Some of what we found surprised us... like more than a third of social networkers say they are losing interest in social media. And how many people do not even know what it is."

That said, if they had interviewed only 18-35 year olds, they would have seen a different picture. However, the demographic they covered reflects the demographic in many enterprises and should not be ignored.

Interestingly, there also appear to be geographical differences in awareness of social networking:

"The Dutch were most likely to know the term with 89% answering 'yes', followed by Japan at 71% and Americans with 70% answering in the affirmative. Still, that leaves three in every ten Americans (the home of social networking) outside the world of digital friends and relationships."

...

"Overall, 26% across the markets surveyed are members of social networking sites. This peaked with the Netherlands at 49%, United Arab Emirates (UAE) at 46%, Canada at 44% and the US at 40% (though keep in mind that's 40% of a huge population)."

This suggests that a social networking strategy within a firm may have more success if targeted at workers within specific countries. Clearly one size does not fit all.

In the context of law firm knowledge management, it's time we stopped complaining about how hard it is to convince lawyers to use social media tools. We shouldn't be surprised at how slowly social media tools are being adopted within our firms since the data provided by Synovate appear to indicate that the rate of adoption outside the enterprise is not as broad and high as the hype in the popular press would suggest.

The good news is that you can stop hyperventilating. There is still time to implement a social media program at your firm without falling hopelessly behind your competitors. And, it is worth the effort to do so. These tools are a rich resource for law firms willing to use them creatively. But don't dally unnecessarily. While the social networking train has not left the station yet, it's only a matter of time.

[Thanks to HeadShift for the link to the Synovate survey report.]

Lipstick

We learned last night on prime time TV that the only difference between a "hockey mom" and a pit bull is ... lipstick.

Tenacity. Perseverance. Toughness. Fighting spirit. These are some of the characteristics typically associated with pit bulls. Of course, there's also meanness and deadliness, but since this blog is NOT about politics, we won't go there.

All of this talk of groups of people and animals got me thinking about the characteristics knowledge management experts share. We need the tenacity, perseverance, toughness and fighting spirit of pit bulls. But, equally, we need empathy, intuition, ingenuity and the ability to put others at ease as we encourage them to do things they would not otherwise do. So, to be effective at knowledge management, we need to be a cross between pit bulls and ... what?

Perhaps we should look to the patron saint of animals, St. Francis of Assisi. He was a troubadour and poet, a soldier, a teacher, an evangelist, a person capable of changing how others lived, the founder of a major institution, a person who accomplished great things despite poverty, someone who was completely attuned to his environment. We could do much worse.

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.