If your firm is a small to medium-sized firm experiencing or anticipating a period of growth, you may wonder how KM can help you with your firm's efficacy. This article, originally in Solicitors Journal, will explain.

1. KM for SMFs
Have you ever faced these problems?
You have a serious problem with a file, with no obvious solution. You’re sure someone
somewhere in the firm knows the answer, but you don’t know who.
You have just finished a tricky document (a contract, a lease, a statement of case) which has
taken significant time. On your way home, you bump into another fee earner who mentions
that they’ve just finished the same tricky document and you secretly fear their answer may
be better than yours. How will you bill your clients?
You need to review a particular case for some research, but Joe, who you usually phone
when stuck, has been made redundant and you don’t know where to start.
You are Managing Partner of a High Street firm and you wonder how to differentiate your
firm and compete with “Tesco Law” following the Legal Services Act 2007 (LSA).
You may think that Knowledge Management (KM) is only suitable for Magic Circle, but all Law firms
are knowledge businesses and KM may be your solution.
This article aims to explain what KM is and some of the potential benefits to small and medium-sized
firms (SMFs) which place KM at the heart of their businesses.
What is Knowledge? What is Knowledge Management?
You can divide “knowledge” in a number of ways in order to understand it better: some academics
even divide it into “data”, “information”, “knowledge”, and “wisdom”1. Most lawyers, however,
instinctively understand what is meant by knowledge, although two definitions will be used in this
article: “explicit knowledge” (objective facts and figures) and “tacit knowledge” (subjective insights
and experience), as this article will show how solicitors can differentiate themselves in the new
competitive landscape.
The definition of “Knowledge Management” is still subject to debate2. KM definitely isn’t IT systems.
It isn’t having Professional Support Lawyers. It isn’t even understanding web 2.0 and having
collaborative worksites. Magic Circle firms may not have begun formally developing KM systems
until 1980s, but lawyers have been “doing” KM in practical terms since lawyering began. In simple
terms, KM is at the very heart of law firms and is how firms create, capture, access, apply, interpret
and utilize the combined knowledge of their employees to improve their businesses.
What benefits can KM offer?
In a knowledge business such as a law firm, the benefits of successfully implemented and culturally
integrated KM systems (“systems” in the broadest sense, not IT systems) are many and continuing.
KM systems can:-
Capture and document valuable existing knowledge for use by all fee earners
Avoid knowledge leakage when individuals leave a firm
1
See “At a glance jargon buster” at www.theknowledgebusiness.co.uk/knowledgebank.php
2
ibid

2. Enable a firm to produce documents more efficiently
Improve profitability
Aid transfer of knowledge between lawyers to ensure knowledge is available for re-sale by
others
Improve communication and collaboration
Improve quality, consistency and enable a firm to speak with a “house-style”
Improve risk management and reduce the cost of professional negligence suits
Improve training and learning
Improve employee satisfaction, attract talent and reduce employee turnover
Help to integrate new starters and reduce lead-in time
Improve customer satisfaction and build client relationships
Improve knowledge-based marketing
Offer a sustainable source of competitive advantage into the future and ensure growth and
sustainability of a firm
Improving efficiency and profitability through KM
Turning to the list of situations in the introduction, how often has one of your fee earners finished a
tricky piece of research or document only to discover later that a colleague had done something
similar before, and possibly reached a better solution?
KM systems, such as precedent databases (externally provided or developed in-house, in a paper
format or online), knowledge packs on an intranet, quick guides, document management systems, a
well-organised library, even shared e-mail or document folders, workflows, checklists and case
management systems, can all help to avoid this problem, preventing costly write-offs, enabling fee
earners to take advantage of best practices and avoiding unhappy clients. Such systems also help to
improve consistency and quality, leading to a reduction in litigation costs and professional indemnity
insurance. They can also improve the productivity of support staff, enabling a firm to manage with
fewer without compromising quality.
Where existing knowledge is captured and supplemented by workflows and appropriate
collaboration, mentoring and supervision, work can be commoditised, improving leverage. Where
bills are based purely on chargeable time, this won’t necessarily improve profitability, but it can
improve volume of work, client satisfaction and profitability in fixed billing. Senior fee earners may
resist commoditisation of their work, believing it to be too complex, but a surprisingly large number
of tasks can be satisfactorily commoditised, and, once embedded, this improves senior fee earner
morale as it frees time to develop client relationships, work on more complex legal matters or
develop new products and innovations. This commoditisation can also help smaller firms to attract
senior talent who appreciate being freed from more mundane tasks to concentrate on building a
client following.
Smaller firms new to KM can benefit from the learning curves of larger firms and early adopters in
relation to such internal knowledge sharing. Research3 suggests that codifying explicit knowledge
doesn’t necessarily deliver as great a return on investment as systems which encourage
3
“The New Organisational Wealth: Managing and Measuring Knowledge-Based Assets” Sveiby

3. collaboration and the sharing of tacit knowledge. Therefore, once basic precedents and workflows
are in place, a smaller firm can get a greater return by concentrating on connecting people and
encouraging collaboration and a knowledge-sharing culture, than by spending money on costly
technology.
In the internet age, a vast amount of information is freely available, so clients expect a clear “value-
add” (a lawyer’s experience and insight) to justify the cost of instructing a professional. This is
where law firms can differentiate themselves in the future: by the added tacit knowledge that they
can apply to the explicit knowledge available to all.
Also, once the LSA takes effect and SMFs compete with “Tesco Law”, law firms may find that
business clients will not pay lawyers to deliver work in apparently inefficient ways and even if price
and quality are actually the same, so without KM systems to differentiate themselves, they may lose
clients.
What would happen if an important client phoned your firm out of hours with an unusual problem?
Would the last fee earner in the office be able to put them in touch with the right person? What if
the relevant fee earner was sick? Would another fee earner have access to sufficient knowledge to
begin work or manage the crisis until that expert was available? Well-designed and integrated KM
systems (such as a White Pages, a well-designed knowledge database, a training and networking
programme) can help others tap into expertise and generally help to ensure that work is assigned to
the right fee earner, improving quality and customer satisfaction.
Do you exploit all the talents within your firm? Many fee earners may be excellent technical lawyers,
but poor at seeing the commercial potential of their knowledge. Do you have systems in place to
connect your technical experts with business-minded individuals? Why concentrate on developing
new products and income streams, when you have existing knowledge within the firm that is not yet
fully exploited?
Are your in-house training systems tailored to your staff or is it a last minute scramble for CPD? Are
there plenty of opportunities for staff to collaborate and learn from each other across practice areas?
It is often through collaboration opportunities that innovative thinking, the kind that offers
competitive advantage, occurs4. KM systems that encourage collaboration and networking, such as
team work, seminars, cross-practice meetings, on-line discussion forums and communities, can all
help to encourage collaboration. Firms can supplement seminars with e-learning, webinars and on-
line chats and then re-use knowledge in client-facing marketing.
Lastly, many SMFs fail to exploit the full potential of their knowledge-based marketing, such as
newsletters, e-zines, client seminars and social media such as Blogs, Twitter and Facebook. If the
knowledge within your firm is organised and your tacit knowledge shared openly, then its reuse as
articles, blog-posts, client seminars, internal training events etc becomes far easier, meaning less
effort by your fee earners and lower non-chargeable time spent on marketing.
Conclusion
4
“The Knowledge Management spectrum – understating the KM landscape” Binney 2001 p37

4. When implemented correctly and embedded within a firm, successful Knowledge Management
systems enable a firm to fully and efficiently exploit their existing knowledge and offer a sustainable
future competitive advantage that is not easily replaced or imitated by others. Whether a firm
works with its existing technology and people or invests in new software and advice will depend on
its circumstances. There are plenty of steps a firm can take to improve its efficiency and profitability
without investing in costly technology if it places strategic Knowledge Management at the heart of
its business.
Author profile
Hélène Russell of The Knowledge Business provides consultancy services in Knowledge Management
to the legal sector. After a decade as a solicitor specialising in clinical negligence litigation, she cares
passionately about practical solutions to help lawyers work smarter. Her book “A lawyer’s KM
Handbook” will be published next year. Hélène is also Founder of Knowledge Network West, the
knowledge-sharing and networking group for KM professionals in the West.
Contact her on 07548 912 779, visit www.theknowledgebusiness.co.uk, follow her on twitter
@heleneadby, or e-mail her at helenerussell@theknowledgebusiness.co.uk.
For the month of November, Helene is offering a free KM Healthcheck (usual cost £250) to the first
10 firms which apply quoting “SOL-JO-10”i.

5. i
Terms and conditions apply and are available on The Knowledge Business’s website
www.theknowledgebusiness.co.uk