The 2020 Gartner Survey of Legal Leaders predicts that by 2025 legal departments will increase their spending on legal technology threefold, 20% of lawyers will be replaced by non-lawyer staff, and 50% of legal work will be automated. Also, the 2015 Altman Weil Law Firm Report states that 68% of firms with 250+ lawyers have Knowledge Management (KM) resources to improve efficiency. Why are these numbers relevant to you? Well, because the legal industry, like any other industry, is dynamic and is gradually adapting to automation, enhanced client needs, and innovation. Our previous blogs provided an anchor to various emerging roles in the legal market.
Knowledge automation is at the forefront of emerging disruptive technologies – second only to mobile internet. McKinsey predicts that knowledge automation will generate an estimated $5-7 trillion in annual value and will combine to bring in an annual economic impact of $33 trillion by 2025 across a wide range of industries.
So, what are knowledge automation and knowledge management and why does it matter? To understand this, we will first have to look into knowledge and how it is an asset for any industry.
Knowledge is simply an awareness of a fact, an experience, or a skill. It is dynamic in nature and can evolve, or degrade with time. In order to store, manage and organise the knowledge of a lawyer, it is important to differentiate knowledge with data and convert the two into information.
Data are facts, figures, statistics, numbers, quantities, or characters that are collected for a particular purpose. Once data is matched with a context, it becomes valuable information. Similarly, a lawyer’s knowledge, when combined with a context (eg: facts of a case, social and economic background of a judgment, etc.), becomes valuable information that can be stored as precedents for future use.
Tacit and Explicit knowledge
Tacit knowledge is the personal knowledge of an individual that is unknown to anyone. Explicit knowledge is expressed, applied, and known to other people. Each lawyer will have an abundance of tacit knowledge that, when revealed, becomes an asset for the firm. The challenge of converting tacit knowledge into explicit knowledge is undertaken by the discipline of Knowledge Management. Once captured, it can contribute positively to the firm, and if not captured, it can be lost as and when the lawyer leaves (retires, resigns, etc). Along with capturing tacit knowledge, it is equally important to imbibe the context of that knowledge. Storing tacit knowledge in isolation may not be as useful as knowledge stored with a context.
Knowledge as an asset
Knowledge is considered to be an intangible asset or intellectual capital. Each member of an organisation has his or her own knowledge space, which can be captured, stored, and integrated into the organisation. JF Gomes, the author of ‘Knowledge Infrastructures in New Product Development’, is of the view that, “knowledge is an asset and should be managed, in a similar fashion to the traditional cash flow, human resources, or raw materials.”
According to K. Vat, author of “Towards an actionable synthesis of knowledge synthesis in pursuit of Learning organisation”, “as the source of a firm’s wealth shifts from tangible assets to knowledge, it is evident that firms who create their own communal knowledge space between their members embrace a great advantage over those who choose not to.”
Now that we understand knowledge from an industrial perspective, let’s delve into Knowledge Management.
What is Knowledge Management?
Knowledge Management is the systematic organisation, storage, review, and analysis of the knowledge assets of a company to automate processes, increase value, boost efficiency and productivity and create a centralised mechanism of knowledge sharing. Knowledge Management, as a concept and practice has been adopted by many industries. Each industry can make its own knowledge management system since KM is inherently subjective in nature. Automation within the ambit of knowledge management collides at the intersection of technology, process, and people. It is a continuous cycle of three processes:
- Knowledge creation and improvement;
- Knowledge distribution and circulation; and
- Knowledge addition and application.
Knowledge Management Cycles
There are many Knowledge Management cycles as propounded by different thinkers: Meyer and Zack(1996), Bukowitz and Williams (2000), McElroy (2003), WIIG(1993).
The following table briefly enumerates the different stages of each of the above-stated models:
An integrated cycle of Knowledge Management can be understood in the following steps:
- Capturing and Creating Knowledge: At the very first stage of KM, knowledge assets are compiled and tacit and explicit knowledge is captured and acquired from these sources. Knowledge can also be created, by adopting new technologies, processes, know-how, and content from emerging technologies and trends, to upskill the organisation.
- Knowledge Contextualisation: Once knowledge is acquired and created, it needs to be contextualised for better applicability. The aim here is not just to store knowledge in smart databases but to also be able to utilise that knowledge to automate work and increase efficiency.
- Knowledge Sharing and Dissemination: Lastly, once knowledge assets are analysed, and knowledge is contextualised to be stored, it can be accessed and distributed among coworkers, and clients.
Knowledge Management Strategies
Selecting the right Knowledge Management strategy is important for any organisation to ensure that it is able to reap maximum benefits of a KM mechanism. Knowledge Management is subjective in nature and each industry can adopt a different Knowledge Management strategy to serve its needs.
An optimum Knowledge Management strategy should:
- Be able to define the aims and objectives of the organisation, and how adopting a KM strategy can be useful in leveraging these objectives.
- Be able to draw a comparison between the current KM strategy (if any) or current methods of knowledge storage and analysis (that could be traditional in nature), and the desired KM mechanism that the organisation aims to build.
- Be able to identify and automate current knowledge resources and succinctly define what the future Knowledge Management strategy should look like, what tools and services are to be deployed.
Here are some ways an organisation can begin with preliminary process of knowledge management:
Knowledge Audit is a comprehensive processthat can be used by enterprises to examine and evaluate their existing knowledge resources, required/used tools, gaps, and desired mechanisms. The process of Knowledge Audit involves:
- Identification of core resources of knowledge.
- Identification of existing knowledge storage and evaluation mechanisms.
- Identification of potential gaps in existing mechanisms that can be covered or down away with.
- Identification of opportunities and tools that could help minimise knowledge handling costs.
- Curation of mechanisms for the adoption of newer knowledge management tools.
Knowledge Management Tools
Knowledge Management tools can be divided into two heads: Knowledge Creation Tools and Knowledge Sharing Tools.
Knowledge Creation Tools help in structuring and organising knowledge. These include:
- Authoring Tools: These tools help the users to create multimedia applications in order to capture tacit knowledge. Common examples include MS Word, MS Excel, MS PowerPoint, etc.
- Annotation Tools: These tools help in reviewing knowledge by the means of adding comments and suggestions to an authoring tool file. Common examples include track changes in MS Word.
- Templates: These tools act as a pattern of reference to design or draft specific documents. A common example is the template slides of MS PowerPoint.
- Data Mining and Knowledge Discovery tools: These tools help in data analysis, statistical analysis, market-related analysis, the discovery of relations, etc.
Sharing Tools help in inter-disciplinary and inter-team collaborations. These are enabler tools for knowledge sharing and dissemination. Some common examples include Google Docs, Email, Group Calendars, Wikis, etc.
Knowledge Management Maturity Models
There are a number of Knowledge Management Maturity Models. Each of which entails the basic essence of organisational knowledge management, with different stages and steps of delivery.
Let’s look at two widely recognised Maturity Models:
TSIA Maturity Model
The TSIA Maturity Model is a self-assessment tool for companies to identify the stage of Knowledge Management Maturity their organisation is at. The model has 4 stages, each divided into 4 similar pillars, namely corporate culture, people, process, and technology.
The 4 stages range from an initial stage of lack of awareness to a final stage of strategic knowledge management.
Stage 1: Recognition: The concept of Knowledge Management does not exist. Collaboration is not promoted. An informal system of Knowledge Management exists, individuals are rewarded for their own tacit knowledge, without any incentive for knowledge sharing.
Stage 2: Instantiation: Primary understanding of Knowledge Management, its processes, strategies, and importance exist among teams. Basic systems of KM are set up to collaborate and store tacit knowledge.
Stage 3: Value Realisation: The value of KM is recognised across the board. Corporate culture accepts and appreciates KM. KM processes and its technologies are updated to serve industry-specific KM needs of the department.
Stage 4: Strategic: Knowledge Management, collaboration, storing, and re-using tacit knowledge now becomes a regular resolve. Each department and pillar moves ahead with robust KM mechanisms in play.
Infosys KM Maturity Model (A highly regarded KM Model)
Infosys Technologies’ KM vision is to become “an organization where every action is fully enabled by the power of knowledge”. Their KM Model has 5 stages:
Stage 1: Default: There is no mechanism to manage knowledge. The concept and processes are entirely alien at this stage.
Stage 2: Reactive: At this stage, knowledge is not pro-actively shared. However, some basic collaboration is seen when an absolute need to share knowledge is felt.
Step 3: Aware: An initial understanding of KM now exists. Collaboration is actively encouraged. The benefits of KM are being realised.
Step 4: Convinced: A robust KM system has been developed across departments. Technology and process needs are met. Knowledge is being shared, stored, and re-used at regular intervals.
Step 5: Sharing: Knowledge sharing becomes the culture of an organisation. Knowledge processes are continuously improved.
Knowledge Management in the Legal Industry
The legal field is marked by its expertise, counsel, advice, and knowledge. This makes law one of the largest contributors to the knowledge economy. The ability to interpret, analyse, quote, and understand the law, is what makes legal knowledge the primary asset of a lawyer. Clients approach lawyers for their legal advice and expertise, there are no physical goods involved in a lawyer-client transaction. Naturally, to ease their workflow, increase efficiency, and preserve precedents for future use, a lawyer would want to store, manage and organise their knowledge. An abundance of knowledge requires smart, less time-consuming, and efficient automation and management techniques. This is where Legal Knowledge Management steps in.
What is Legal Knowledge Management (LKM)?
Linklaters’ report ‘Knowledge to Action’, defines knowledge management as “A toolkit of different methods, techniques, approaches, ways of working and behaviours that are all designed to enable and increase organisational efficiency.”
According to Reuters, Legal Knowledge Management is a means for law firms to “achieve strategic goals, maximise operational efficiency, increase learning, drive innovation, deliver services and create value.”
LKM relies on boolean keyword search and is a means to document, store, retrieve and manage data and information. It is different from traditional internal knowledge bases because LKM databases and tools go a step further since they incorporate content verification, security and compliance measures.
Why is Legal Knowledge Management essential?
- Knowledge Bank and Precedent Collection: LKM is a technique used to manage, store and organise data and information. It acts as a collection of precedents that can be used for future mandates. Legal Knowledge Management Softwares enables lawyers to store their research, documents and drafts, which are available for the entire firm to access. LKM is an essential tool to build a central repository of information and data, that is allied to the business, client expectations, etc.
- Store Specialised Knowledge: LKM helps store contextualised knowledge that is client-specific. LKM tools help in intricately separating this specialised knowledge from general resources.
- Performance Management: LKM tools and databases are also used to measure the performances of lawyers against their colleagues. In this regard, LKM is also used to record the overall performance of the legal team or firm.
- Integrated Information: LKM helps integrate information with other data repositories such as Practice Management System (PMS), Client Relationship Management (CRM), Document Management Systems (DMS), etc.
- Time-Saving and Sophisticated Search: LKM tools have a user-friendly interface that helps save time and increase efficiency. Once all knowledge is collated in a single database, it can be modified, updated, retrieved, and easily accessed.
- PropelsInnovation: LKM provides a space for lawyers to collaborate with other teams to work on innovative solutions while harnessing available knowledge.
Legal Knowledge Management Model
As we saw earlier, LKM comprises data and information. The structure of LKM consists of two components:
- Knowledge Infrastructure
- Knowledge Processes
This comprises technology that helps automate the LKM process. Many LKM tools make the process easier and more efficient as compared to manual management techniques. A comprehensive list of LKM tools is given below. Another aspect of knowledge infrastructure is organisational structure. Knowledge management suggests flexible, non-hierarchical working space for efficient knowledge transmission. The last component of knowledge infrastructure is culture. It is essential for a firm to have a conducive structure that promotes knowledge collaboration and sharing.
This consists of four simple steps:
- Acquisition: Collection of data and information.
- Conversion: Transformation of data and information into valuable knowledge, known as knowledge artifacts (document form of intangible knowledge).
- Application: Making use of converted knowledge and making it largely available within the organisation.
- Protection: Securing knowledge from potential leakage beyond the organisation.
Role of a Legal Knowledge Manager
To understand the role of a Legal Knowledge Manager from a practical perspective, we have attached a Job description of Legal Management Practice Group Specialist by Baker Mckenzie.
Challenges faced by Knowledge Management
- Initial Hesitancy: An initial hesitancy to implement Knowledge Management processes and strategies exist since the technological setup is considered laborious. Most unaware teams consider it redundant and are not able to capitalise on the benefits of KM.
- Getting People on Board: Training people for KM systems and making them realise the importance and utility of KM is considered to be another challenge most companies face. Training teams to collaborate and store their knowledge (tacit and explicit) in a systematic mechanism is a time-consuming task that requires a different set of resources and capital investment.
- Security: Shielding knowledge from unknown users and securing it within a company is the key to efficient knowledge utilisation. In this case, the security of KM systems is of utmost importance.
- Updating relevant technology: Newer technologies emerge rapidly. It is important for KM teams to keep track of these technologies and update themselves with the most efficient tools of knowledge storage, organisation, and delivery. It is a challenge to not only keep track of newer tools but also identify those that suit the organisation’s need.
Some Popular LKM tools
- West km- Thomas Reuters
- Lexis Search Advantage
- Neudesic Firm Directory
- Legal Search Connect
- ROSS by IBM
- KM Standards
- Microsoft SharePoint
- Signal Media
- 9 Well Defined Law Firm Knowledge Management Projects Your Firm Can Model, Aderant
- A brief overview of Legal Knowledge Management, Prism
- Knowledge Management in Law firms, University of Warwick
- A brief overview of Legal Knowledge Management, ACC
- Matthew Parsons, Effective Legal Management for Law Firms, 2004
- Luis Felipe Mohando, Silke Gotschalk, Martin Schulz, Knowledge Management in Law Firms: Expertise in Action, 2016
- Martin Apistola, Petter Gottschalk, Essential Knowledge and Management issues with Law firms, 2011
- Gretta Rusanow, Knowledge Management and the smarter lawyer, 2003