Is "knowledge management" worth the investment?
Even now, well into the 21st century, I frequently hear this question from managing partners, practice group leaders, and other fee earners, especially those in smaller law firms with limited resources to invest in technology.
Of course, knowledge management is not a piece of technology. Information technology is simply a tool that makes the knowledge managment practices faster, more accurate, and less expensive in terms of fee earner time. If those basic practices are not present, all the slick technology in the world will not make much difference.
Getting beyond that basic point, however, there are two very important, and often compelling, measurements that demonstrate how technology-enabled knowledge management practices can make produce dramatic improvements in profitability:
- increased fee earner productivity
By substantially reducing the time that is required for research, factual analysis, and document drafting, good knowledge management practices can improved the average fee yield and profit per fee earner hour. By reducing the time that it takes to draft a document, for example, knowledge management practices can create addition fee-earning work capacity with virtually no additional staff. The fees that can be earned with in the hours that used to be devoted to inefficient research, analysis, and drafting, are almost "pure profit."
- improved quality
Good knowledge management practices also are at the core of any serious, effective quality assurance program. In my experience and observation, between 30% and 45% of all of the errors in the drafting of documents, and the resulting unbillable work needed to correct them, arise from weak or non-existent use of available precedents, form documents, and other available intellectual capital in the law firm or practice group.
Take care of the basics first. Eliminate the steps that add no value. Focus on the ones with the highest risks of errors and inefficiency. Then apply the technology-enabled tools to measure the results, identify further opportunities for improvement, and build sustainable profitability into the way that fee earners in your firm prepare and deliver legal services and products.