The key ingredient for creating and sustaining law firm profitability

14 November 2016

In our latest blog, Dr Anthony J Rhem, PhD, contributor to the just published title on Knowledge Management in Law Firms, discusses ways of building strategic advantage for law firms and its clients.

Creating a Client Advantage - The Practice of Knowledge Management in Law Firms

Legal knowledge management is the driving force within law firms across the globe. The recent International Bar Association (IBA) conference in Washington DC attracted over 6000 legal professionals from around the world and Knowledge Management (KM) was prominently featured at the conference. In an article by Ron Friedmann of Fireman & Company in Bloomberg Law he indicates that legal knowledge management is on the rise as law firms realize that KM increases a lawyer’s productivity (Friedmann, 2016). This increase in productivity leads to delivering better value to clients. Ron Friedmann also indicates that The 2016 Citi-Hildebrandt client advisory expects “to see more focus on knowledge management” and The 2015 Altman Weil law firm report finds that 68% of firms with 250+ lawyers have incorporated KM initiatives to improve the firm’s efficiency (Friedmann, 2016).

In a Forbes 2014 article Micah Solomon indicates that creating true client loyalty is one of the most powerful and reliable ways to build a strategic, sustainable advantage for the law practice and that truly loyal clients are less price sensitive, and are less likely to be enticed by competitive entreaties from the firm across the street or across the continent (Solomon, 2014). Knowledge Management plays a key role in ensuring a high level of client support. KM staff operate smoothly between lawyers and a range of operational functions; ideally situated to increase intra-firm collaboration, communication, and understanding. Some KM programs have worked on operations for some time, but business conditions are now ripe for more extensive applications of KM to firm operations; arguably critical to keeping operational teams relevant and law firms profitable (Solomon, 2014).

Client support specifically focuses on dramatically improving the client experience. It is the expectation of all clients that legal professionals and law firms will provide high quality legal services and it’s that promise and demonstration of high quality legal services that are the intangibles that will set the firm apart. Some of the benefits KM has for legal professionals as it pertains to servicing clients are:

• Creating an environment to Share, Collaborate, and Store pertinent law firm content
• Mentor and cross train new associate, and experienced lawyers
• Manage and expand the talent and experiences of lawyers at the firm  
• Ability to reuse internally developed knowledge assets such as precedents, letters, research findings, and case history information.

Knowledge management in law firms provides the ability to identify and provide business process and technology solutions to improve the business and increase profitability through improved client relationships. Establishing KM groups in firm operations to facilitate collaboration and knowledge transfer within the operation functions of the firm is another area where KM can be applied to support lawyers in their client relationships. KM in addition will provide process mapping, understanding work-flow and critical touch-points and handling the flow of knowledge throughout the firm. Knowledge Management is the key ingredient for creating and sustaining law firm profitability.

A Few Tips to Consider when implementing KM at the Law Firm:

• When considering incorporating Knowledge Management (KM) with the law firm/law practice begin with the benefits KM can bring.
• Identify the key benefits and align them to the KM drivers to facilitate the adoption of KM at the law firm.
• The use of technology is changing the way law firms operate and the way legal professionals work. Acquiring the right technology professionals to assist in transitioning technology into the firm as well as providing the necessary training to all legal staff will facilitate adoption and proper use of technology.

Dr Anthony J Rhem, PhD is a contributor to the new book on Knowledge Management in Law Firms, within the series on the business of law.

References
Friedmann, R. (2016). Perspective: The Rise of Legal Knowledge Management. Bloomberg Law. 
Retrieved from https://bol.bna.com/perspective-the-rise-of-legal-knowledge-management/
 
Solomon, M. (2014). Transform Your Law Firm's Client Service: Consultant Offers Five Steps
For Starting Your Legal Industry Initiative. Retrieved from http://www.forbes.com/sites/micahsolomon/2014/02/04/transform-your-law-firms