With a consensus largely across the legal sector that Knowledge Management (KM) can now play a vital role in the success of a law firm, what are we able to do in relation to systems that help facilitate a knowledge-sharing culture?
It should be noted initially that when we talk about "KM systems" we are largely not speaking of an actual single system which provides access to a Comprehensive store of a firm's knowledge. Whether by knowledge (or know-how) we mean documents, matter information, billing information or anything else pertinent to a firm's success, it will be rare (though not impossible) to have an all-encompassing single system. Thus, the actual systems or sources of knowledge within a firm may be numerous, even if some sort of single search tool, index or portal is placed around the systems (in itself often referred to as a "KM System"). This may be a customised or a standard third party solution or some other application (I am largely thinking SharePoint).
Law firms of all sizes will now usually have at least some repository of knowledge, but as rich knowledge sources have grown exponentially, it is arguable whether access to knowledge has become easier or actually more difficult. Systems aimed at law firms are certainly plentiful and whilst many use a similar search solution or application, the architecture placed on an out of the box product may vary hugely (this in turn massively determines usefulness).
At the turn of the millennium, KM systems may have been limited to a file-share (or lever arch binder) containing a firm's core precedent documents – or the "crown jewels" as more than one Senior Partner would inform me over time (matter information could often be restricted to a spreadsheet of names and contact details). These were guarded enthusiastically, with a regime that would only allow new-joiners very limited access, mid-termers slightly greater access and only when you were fully committed to a firm for life were you allowed to see virtually all documents (there would always be the odd one or two that would get locked away in the safe). Thankfully, Practical Law came along and illustrated that such documents were not overly dissimilar after all and the need to secure these diminished somewhat. Security is much more prominent then it was back then and has moved on from simple yes/no access to flexible models able to incorporate ethical walls, sensitivities and personal preferences. Any KM system must allow such flexible security application.
The coming seismic shift in marketing and business development in law firms
As legal markets become even more competitive over the next ten years, commercial law firms everywhere will be forced to reconsider many of their long-held assumptions and practices about marketing and business development. Fast-changing client needs and perceptions of value, amplified by communications and knowledge technology, will make this a seismic shift. Some firms will anticipate and respond effectively. Others will not.
What type of law firm are you?
Understanding the distinctions between commercial law firms and retail law firms will be critical to selecting the best strategies and tactics for marketing and business development. Some marketing tools will become largely irrelevant to commercial law firms, but at the same time even more important for retail law firms.
A “commercial law firm” is one that offers sophisticated corporate and commercial legal services to corporations, government agencies, and high net-worth individuals. Most large law firms and many mid-sized ones can be characterised as commercial law firms, as well as boutique firms that specialise in offering similar services in limited practice areas or client sectors. By contrast, a “retail law firm” (also known as a “high street firm”) focuses more on relatively routine services to individual clients and small businesses.
These two categories actually are more like the ends of a spectrum than sharp definitions. Many law firms have a mixture of “commercial” and “retail” attributes; but even for these hybrid firms it is important to understand the overall orientation of the firm’s strategic and business objectives. Not knowing what type of clients and services drive the firm’s business, or an important part of it, can lead to wasted investments in the wrong type of marketing and business development efforts. In “full-service” law firms, the commercial-or-retail analysis often must be practice area by practice area.
Insolvency not only has a serious impact on the debtor, but also on his creditors: the debtor loses the right to freely (within reasonable boundaries) dispose of his assets; the creditors face the risk of never getting their outstanding invoices paid – at least, not in full. This especially affects the ordinary, unsecured and unprivileged/non-preferential creditors.
Creditors may try to mitigate the risk of insolvency of their debtor by improving their position. This may be done, for instance, by having a security right such as a right of pledge or mortgage vested, or by obtaining a personal security, such as a suretyship or a guarantee, from a third party such as a shareholder or parent company. Another way in which a creditor may create a stronger position can occur in a situation concerning the sale of (mostly movable) goods. The seller of such goods may under certain circumstances retain title to the goods.
Nowadays, apart from consumers, more often than not purchasers don’t pay the purchase price for goods purchased at the time of closing the purchase agreement or even at the moment the goods are delivered to them. Transferring title to the goods to the purchaser before the purchase price has been paid is a risk for the seller – not only in the event that the purchaser becomes insolvent, but also outside insolvency. In the event that the purchaser goes into insolvency before having paid the purchase price, the seller is mostly confronted with a liquidator and very strict statutory insolvency laws that may disallow him from exercising his rights, at least temporarily. But even if the purchaser is not in insolvency, the seller is not sure to get paid. The purchaser has gained title to the goods and therefore is their owner, and so it could be that he might sell the goods to a third party – who, in principle, is not obligated to pay the purchase price to the original seller because there is no contractual relationship between them in this regard.
Needless to say, it is essential for the seller to protect his rights as best he can and as early as he can. The concept of retention of title in itself is complicated enough in one jurisdiction, but becomes increasingly so in times of growing globalisation, where foreign jurisdictions come into play. It is not customary any more that a manufacturer purchases the supplies he needs only in the nearest city or even in his own country. On the contrary, with the use of the internet the quality and price of goods for sale can instantly be checked and compared all over the globe. And the ordering process is completed by a mouse click. In that situation it is even more important that the supplier knows what his rights are when he ships his goods to another country, possibly even another continent.
How is the UK market currently in public takeovers?
Thirty-four deals were announced in 2013, with a total deal value of around £10.1 billion. Looking at the first three months of this year compared to the last three months of last year, the number of deals fell, but the deal value increased by around 40%. So public M&A appears to be returning. The question is whether this will continue through the summer. It is interesting that several of the recent flotations have been priced towards the bottom of their range.
Where do you see it heading?
If only I had a crystal ball! UK plc has billions of pounds in surplus cash - sooner or late, pressure will grow for companies to invest it or return it to shareholders. This makes some of them attractive takeover targets. At the same time, the new Takeover Code rules on disclosure and the ban on break fees could put off certain bidders from making offers.
We are pleased to introduce our first blog post in banking and finance: a video interview with our blog editor for banking and finance, Edmund Parker, global co-head of Mayer Brown's derivatives and structured products practice.
The author and consulting editor of a number of Globe Law and Business titles on derivatives, Edmund offers an expert view on the evolution of credit derivatives.