Knowledge Management and Business Development – Luxury Or Necessity?
The Legal Business Landscape Today
Technology and new dynamics of the business relationship between lawyers and clients are driving change in the legal industry.
The classic law firm business model is losing its lustre.
Clients today demand better service, faster turn-around and full transparency on their matters.
Previously unheard of, it is commonplace these days for lawyers to pitch for work, make submissions to legal directories and league tables and proactively use social media to establish online presence to market their practices.
Commoditisation of Legal Work
Lawyers cringe at the thought of legal services becoming a commodity. As discouraging as it may be, a lawyer’s years of hard work, knowledge and practice experience are less meaningful to potential clients than they once were.
Claiming excellent knowledge of the law is not the only differentiating factor today.
The internet has enabled greater access to legal knowledge and information.
Alternative legal service providers are also making inroads into the legal industry. They offer easy access to a wide-ranging suite of documents, from employment contracts, incorporation documentation, wills, leases to basic M&A agreements at relatively low subscription fees.
As a result, there is a preference for technology powered legal alternatives, perceived to be more efficient and affordable, compared with the engagement of a lawyer, which can be a rather laborious and expensive process.
This trend will only become stronger as online alternatives make improvements to their products and services.
Pitching for Work – Beauty Parades and League Tables
A few decades ago, any form of law firm marketing would have been frowned upon. The thought of going to a prospective client and competing with other law firms in a “beauty contest” or making submissions for ranking in league tables would have seemed absurd.
The market for legal services has evolved in favour of the client. Law firms today spend many unbillable hours responding to pitches and league table rankings.
Corporate legal departments are working to become more cost efficient and strategic by reducing the number of firms they have on their panels. Additional players (beyond the general counsel) such as the procurement department are now part of the law firm engagement process.
Procurement departments do not view law firms as an exception in the purchasing decision for law firm contracts. Law firms must now pitch for work that would previously have gone to the firm with little to no scrutiny.
Knowledge Management and Business Development – Boon or Bane?
Knowledge Management (KM) – No Longer a Luxury
Traditionally, KM has been about legal document-based taxonomies, collecting and creating useful content, curating it, organiding it, and surfacing it in a way that makes it accessible to lawyers as and when they need it.
In recent years, KM has evolved and matured, with an increased focus on how to leverage advanced technologies such as machine learning, artificial intelligence, and bots.
Many law firms consider KM a luxury. However, the necessity of KM has become increasingly apparent, in particular, during the current coronavirus pandemic.
The coronavirus pandemic has legal implications across and within practices. Whether a firm is primarily focused on transactions, litigation, or both, the current crisis requires quick access to high-value content. It is now more important than ever to have a robust, clear and secure mechanism in place to capture, curate and manage materials to help prevent “reinventing the wheel”.
At the onset of the pandemic, seemingly overnight, every law firm had to assemble pandemic teams to:
- advise how the firm should respond internally to stay-at-home rules;
- advise clients on how to protect their businesses, employees, contracts, and customers in an emerging area of “pandemic law”; and
- ensure their lawyers have remote access to existing knowledge resources while aggregating and disseminating the tsunami of laws, regulations, and policies that were emanating at warp speed from every level of government.
Law firms with KM departments would have been in a better position to handle the initial challenges. They can rely on their KM professionals to play a key role in their response teams and help their lawyers deal with real time demands from clients.
In a fast-moving, rapidly unfolding crisis like the current pandemic, it is crucial for everyone not only to have access to good documentation but also the ability to track breaking news. Having a central and easily accessible link is fundamental.
One of the core functions of KM is designing and implementing digital research and workflow platforms that offer lawyers one-click access to statutes, practical guides and precedent databases. These “libraries” are open 24/7 and accessible from any location. KM has unknowingly prepared for the pandemic with this core function.
Another key role KM would have played is help set up internal knowledge sharing platforms, establish client facing e-rooms, and feed content to law firm marketing/business development with COVID-19 client updates, thought pieces, and webinars.
Business Development (BD) – Out of Sight, Out of Mind
Gone are the days when marketing and BD in a law firm only planned client events and arranged law firm marketing collaterals such as brochures and gifts. These functions still happen but they are measured against targets and data.
A large part of BD in law firms today revolves around analysis of industry trends, maintaining law firm visibility on both traditional and social media platforms, submissions to league tables, legal directories, and responding to pitches.
As with KM, BD departments in law firms would also have played a key role in the law firm’s pandemic team. Important functions that BD teams would have undertaken include:
- Ensuring the firm stays visible with appropriate market messaging around the pandemic.
- Assisting partners with staying connected to the clients by proposing strategies that differentiate the firm’s content marketing from the deluge of COVID-19 related materials generated by law firms.
- Suggesting ways to provide clients with targeted and insightful content, instead of developing marketing or thought leadership materials on every topic.
KM and BD – Long Term Essentials
Operational efficiency is key to how law firms respond to technology and client demands, the drivers of change in the legal industry. KM and BD can play key roles in preparing law firms for the legal market of the future.
KM and BD can collaborate to redesign and simplify how lawyers find and leverage firm information and resources to deliver improved legal services.
KM and Digital Transformation
The COVID-19 crisis turbo charged technology adoption.
Lawyers who had proudly defined themselves as Luddites, are now working remotely, forced into virtual meeting rooms and deprived of their books and physical paper files.
As law firms gradually move to re-opening their offices, the lessons they learned by the forced change in work processes during the crisis should be embraced.
They should pry themselves away from reverting to the “old way of working” and press on with the adoption of technology and collaboration tools that allow them to move to the next tier of knowledge and collaboration.
The crisis highlighted the need for a high degree of collaboration amongst multiple groups, including legal subject matter experts, knowledge management, business development and IT.
KM professionals can play a key role in proactively coordinating collaboration by guiding and helping set up collaboration tools to meet the needs of different groups in the firm and help lawyers embrace legal technology.
Beyond Commoditisation of Legal Services
Today, lawyers rarely begin work from a blank screen. They rely on accumulated knowledge, research electronically or pick the brains of colleagues.
A technology driven KM system can be implemented to enable lawyers to leverage on existing firm resources and turn around agreements and deliver advice efficiently and cost effectively.
Beyond implementing tools that speed up and replicate work, KM can lead in in the creation of a single digital workspace with a consumer-like search experience – think Google search.
Many firms store their information in a patchwork of non-connected systems. Lawyers spend an inordinate amount of time logging in and out of systems trying to gather firmwide knowledge and expertise.
A KM platform that is able to aggregate the firm’s information on past matters, successful strategies, expertise and business intelligence, including third party content and research services and deliver associative information to lawyers comprehensively and efficiently will elevate the productivity of lawyers.
The ability to find precedents easily, connect clients with experts in the firm and identify peers with the right experience and expertise on a matter will help lawyers leverage on the firm’s vast and valuable resources to deliver high quality services.
More Than Just Pitches
Without systems, processes and technology, responding effectively to requests for proposal (RFPs), submissions to league tables and creating quality content for firm website and other marketing materials can take up many unbillable hours and manpower.
For example, a typical RFP would require a law firm to compete for its own business by:
- proving its very existence as a quality firm;
- justifying its staffing procedures, billing rates, and approach to matter management (unthinkable previously); and
- be willing to compromise on pricing, once arrogantly deemed non-negotiable.
Many RFPs require quick responses and lawyers must be able to provide the information required speedily when an opportunity to pitch for work arises.
A single digital workspace that enables easy user search for the right experiences and matter descriptions swiftly will save time and can be a strong differentiator.
Such a system will also capture other salient information, saving lawyers and the firm the hassle of being asked repeatedly to provide the same information whenever there is a new RFP or submission.
Manage Business Using the Entire Data Ecosystem
KM solutions can be used to harness information from the entire data ecosystem by building applications to mine and analyse different types of data such as firm’s finances and other information to monitor WIP, A/R, review fee benchmarking and staffing needs and even conduct performance reviews on lawyers.
The firm’s KM intranet site can also be used to build law firm culture which is important for talent retention and a cohesive business. Lawyers can stay connected with firm matters such as recent wins, new hires or other happenings within the firm via the intranet.
The Future of Legal Services
When a crisis hits, majority of law firms tend to focus on core business as financial pressures heighten. The typical response is to discard all non-core activities to cut costs.
Although it is tempting to categorise law firm marketing/BD and KM initiatives as non-essentials, a firm’s response and resiliency to the pandemic or any crisis are dependent on where the firm is along the spectrum of agility, infrastructure, digital knowledge, and collaboration tools.
Post crisis, clients will continue to expect more efficiency and will have less patience for firms that insist on doing work using outdated processes. Real-time updates via client portals, after hour services and instant delivery of completed work will become increasingly common.
Courts will continue to become more tech savvy and new standards will be imposed.
Affordable tech powered alternatives will proliferate.
The legal community needs to embrace the changes taking place and prepare for a new wave in the business of lawyering.
The change taking place in the legal profession is not a temporary trend.
To prepare for the legal market of the future, lawyers need to focus on how to use technology to develop a strong market positioning built on niche, differentiation (from legal product companies) and brand to secure and retain client loyalty.
Law firms can leverage on KM and BD solutions to creatively offer legal services to clients at transparent and predictable costs and at the same time provide value through thoughtful and consistent client experience.