Archive for Knowledge Management
War of the Worlds: Librarians and Knowledge Managers Fight It Out
Posted by: | CommentsAbove and Beyond KM has an intriguing post up about the conflicts between knowledge management (”KM“) managers and librarians at law firms. The author muses that some of the conflict might be due to the caste system in the legal world, where lawyer KM managers look down their noses at “non-lawyer” librarians, and perhaps this struggle amounts to little more than the death throes of an obsolete system.
I think the caste system point is well taken. Interestingly, the caste system affects lawyer KM managers, too, as they usually have less status than many associates at a firm. The unspoken ideology seems to be that either you generate fees, or you do not, and, if not, then you have less status. Ultimately, the “death throes” issue really is at the fore here. Most of the issues I’ve found that librarians care passionately about in managing a collection simply do not overlap well with the daily knowledge acquisition and management needs of the firm. Consider:
- How often does a librarian spend extensive time cataloging material that is almost never used?
- To what degree are acquisitions focused on filling out a typical catalog versus aligning with KM needs?
- How strongly do librarians negotiate vendor contracts (in my experience, hardly at all)?
However, I will grant that KM managers may have blind spots as to certain important library needs. Ultimately, we need a more advanced system that takes into account all of these concerns.
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Padding the Bill – The Leverage Issue
Posted by: | CommentsLeverage is the dominant business model at large law firms, where partners seek to leverage relatively low cost salaried associates against high hourly fees and hire as many associates as possible to maximize revenues. While this model has been battered in the recent recession, I have not seen any systematic change encouraging a fundamental shift away from leverage. The biggest problem with a leverage approach is your value is measured in the number of hours you bill, not the value you provide to your clients, resulting in an incentive to pad your bill.
There’s a nice debate going on right now on this subject within the Legal Innovation Group on Linked In, you can check it out here. Here’s my most recent comments on the issue, challenging the idea that it is not easy to change the current model (it is, but there is little incentive to do so) and the supposition that managing partners often have firm wide policing to prevent padding (they usually do not):
Gary, I would have to respectfully disagree as to this point “It is not easy or obvious how to accomplish this”. Law firms, being loose federations of individual businesses, each business consisting of an equity partner with a book of business and the willingness to walk away from the firm, would need to do the following:
1. Secure a commitment from each partner with a book of business to make the clients those of the firm.
2. Impose optimized processes using Lean/Six Sigma for doing all of their work and make sure that they are followed.
3. Use knowledge management and software automation to speed up document preparation.
Frankly, Patrick is right, without fixed fees there is little incentive to take these steps, and, in fact, a disincentive to do so. But it would be a straightforward process that is already widely performed in other fields, such as software development.
And:
Chris, I would recommend caution in referring to firms where certain behavior is allowed or isn’t, as I find that firms don’t do much of a job of policing behavior internally, and often times one partner will pad a bill while another partner at the very same firm would find that ethically abhorrent. Also, speaking from the in-house perspective, it really is one’s responsibility to question bills on a regular basis from larger law firms because of this lack of policing. At small firms I find this is less necessary, as you have much more of a chance of establishing a regular relationship and better billing expectations once you’ve removed leverage from the equation.
The Angels and Demons of Personal Knowledge Management
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There’s an intriguing post up on Slaw right now (check it out here) by Joel Alleyne talking about the difference between personal knowledge management (”PKM“) and organizational knowledge management (”OKM“). I’m a big fan of PKM because it frees you as an individual to radically improve your productivity, experiment, and pursue your passions, free from the shackles of organizational bureaucracy.
Perhaps one of the most valuable aspects of PKM is that, for the particular individual involved, you can quickly achieve an unqualified success.
OKM is often hijacked by politics within the organization, resulting in either: (a) a massive change management challenge where the lawyers actively resist or ignore OKM efforts, or (b) OKM that represents a compromise in quality due to “folk wisdom” input from powerful players in the organization (e.g., poorly written contract clauses reflecting an influential equity partner’s preferences, even if they’re rife with legalese and make negotiations more difficult).
None of these problems occur for an individual. The individual, through the support of a KM expert, can quickly adopt a KM template covering the most common contracts the individual creates and negotiates (in fact, this was how WhichDraft.com’s great contracts were born, check them out here), can set up a simple organizational tree for all research, and can track metrics to document productivity gains (check out our new proposed 3 True Outcomes metric for lawyers here).
Best of all, this kind of PKM can provide the business case to successfully roll out OKM.
Use PKM – it’s elementary, my dear Watson.
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Alternative Rocking Lawyers: They Might Be Giants
Posted by: | CommentsOne of my fondest memories from Washington University (in St. Louis!) was jumping up and down in a throng of thousands of students while we belted out “Istanbul Not Constantinople” during an outdoor concert by the alternative rock band “They Might Be Giants” (I was sad to recently learn that they didn’t write this great song, but only covered it; it was written by Nat Simon and originally performed by The Four Lads). Here’s a telling lyric for lawyers:
“Why did Constantinople get the works? That’s nobody’s business but the Turks.”
Alternative rock bands like They Might Be Giants originally emerged because they didn’t fit into any of the genres established by the recording industry/radio axis of musical power, even though listeners yearned for something different. Alternative music also flowed from punk rock, which itself emerged out of a negative reaction to the dominance of disco and other overly sentimental musical styles. The music business, like any other, is subject to market forces. And if an entire industry is not catering to its customers’ desires, then a new, young Turk player will emerge to do so, subverting and reinventing the old Constantinoplesque industry along the way.
Triggered by this NY Times article, people in the legal world are currently wondering if law firms will end the billable hour model and move to flat fees and other alternative approaches (click here for a list of articles on this topic). Many partners at major law firms are extremely fearful that they are looking at significantly less profits if they switch to alternative fees. I actually think that partners do not have to accept a drop-off. They do, though, need to fundamentally restructure the way they do business to make the same or more money than they have with the traditional approach. And they are tremendously resistant to do so.
I used to be an in-house lawyer at a Fortune 500 company. On one occasion I had a real estate law firm pitch me. The partner asked, “What can we do to get your business?” I said, “I think a lot of the word processing and the back and forth on contract versions is a big waste of time. I’d love to see a firm that uses contract creation automation software, and has all of its typical contracts and likely negotiation positions loaded into the software for automatic drafting, using a regularly updated knowledge management system. I’d also love it if you had an extranet to store all contract versions so we can skip the old email trap of zapping countless drafts back and forth that leads to version control nightmares. And I’d like you to bill me a flat fee determined up front for each matter.”
He blinked hard, swallowed, and said, “What else can we do?”
His question revealed the tremendous resistance to change in the legal world, where firms are stubbornly committed to a business model that does not meet their clients’ desires for better efficiency and predictable charges. The irony is that if a firm emerges that would actually embrace an alternative approach, it would have a huge competitive advantage in the marketplace and, in the long run, would make more money by growing its business. At some point a full service law firm or outsourcing legal services company will step up and seize this competitive advantage (we’re already seeing up front flat fee alternatives from partners like Jay Shepherd of The Shepherd Law Group, a highly regarded Boston employment law firm).
The biggest problem this new player would face is that all of the most desirable clients, major American corporations, have internal legal departments that choose which firm to hire, and all of these departments are populated by lawyers who used to work for law firms following the traditional model. They’ve all been conditioned to believe that billable hours, unpredictable budgets, and lack of efficiency are par for the course, so they won’t be interested in hiring this new player. Who will then?
Procurement. Right now, almost everything a major company buys, from cardboard boxes to management consulting services, is handled by a strategic sourcing manager who limits the number of vendors and uses that leverage to negotiate improved quality and lower cost. These procurement managers are chomping at the bit to control legal services, but, so far, most law departments have fended them off by making the law seem too mystical to tame. These managers would be the new player’s target market. If the law department tries to fend off their desire to hire, then the company will have a showdown. The arbiter will be the Chief Financial Officer, who, as long as she complies with the law, is almost always more powerful than anyone in the legal department.
And Chief Financial Officers love savings. And Istanbul. Not Constantinople.
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