A hybrid approach

Continuing her 'Challenging preconceptions' series, Cora Newell interviews John Alber of Bryan Cave's Client Technology Group, and examines the divergent development of KM in the UK and US

In view of my unusual background as a dually qualified American attorney at law and an English solicitor, I have watched the divergent development of knowledge management (KM) on both sides of the Atlantic with considerable interest.

Historically, KM in US law firms has been primarily technology driven – all about the development of information systems, which have concentrated on the enhancement of individuals’ efficacy as a priority rather than knowledge sharing. To some extent, this may reflect the original US firm ‘eat what you kill’ attitude to compensation – an approach which ties an individual’s remuneration exclusively to individual rather than firm performance. This is a very different system to what used to be the traditional English lockstep, although this has also evolved with recent reports that one UK national law firm is scrapping the firm-wide performance element in its bonus model for salaried partners and focusing purely on individual performance.

Am/Law 100 firms now base equity partner compensation on a percentage of firm revenues which move up and down, with the percentage depending on a number of factors. Individual performance, including the ability to generate work, is but one.

In contrast, KM in UK law firms has been essentially people driven – the major investment involving the hiring of dedicated professional support lawyer (PSL) staff to take on the creation of work product that can be re-used, such as precedents and standard forms.

But interestingly, the past few years has seen the increasing convergence of American and UK attitudes resulting in a meeting of minds somewhere out in the depths of the chilly mid-Atlantic waters. Whereas US law firms have embarked on the recruitment of dedicated professional support staff, law firms in the UK have developed a greater technology focus, investing in expensive knowledge systems and embracing the concept of enterprise search.

Future articles in this series on challenging preconceptions will explore this theme in greater depth but it is probably true to say that Bryan Cave is an example of one American law firm with a KM approach so individual it fits neither of the two traditional models, as my interview below with John Alber, partner in charge of Bryan Cave’s Client Technology Group, demonstrates.

After a limited exercise in hiring PSLs for some practice groups in the firm in the 1990s, Bryan Cave’s first comprehensive KM steps began in 2000, in the wake of the Y2K effort. The firm directed its KM energies on the fundamentals of its enterprise architecture – an area not usually perceived to be the province of KM professionals, but one it felt essential in order to ensure the free flow of information within the firm. But in order to understand the firm’s approach to KM, it is first necessary to understand what the firm means by the term ‘KM’.

It is no accident that it is the Client Technology Group, headed up by Alber, which is the community within the firm that most closely resembles a KM group. Alber explains that his firm’s standpoint on KM flows from the attitude that the principal function of knowledge in its knowledge-based organisation is to serve as an aid to making a wise decision. “In the course of our business and practical lives, we are presented with a stream of potential decisions every day,” says Alber. “The challenge, in the case of each decision, is to make it in a way that best meets the needs and best serves the interests of our clients and the firm. To do that – to make the best possible decision – we need to have, at our fingertips at exactly the time we make that decision, all the information necessary to make a good decision. Moreover, that information needs to be ‘actionable’. Actionable information, by its very nature, suggests a proper course of action. My telling you that your shoe is untied is actionable. Unless your undone laces are a fashion statement, you are likely to remedy the loose ends. If, on the other hand, I see your laces are undone and I give you a book on shoes, I will not have given you anything actionable. You may find the time to read the book and it may eventually dawn on you that shoes are better tied than untied. We may only hope that you haven’t taken a spill down the stairs before you tie them.”

From Alber’s perspective, the term ‘KM’ is a misnomer, or perhaps a matter of misplaced emphasis. “You may manage a great deal of information and, for all that effort, never once help someone make a good decision,” he says. “A lot of investments in KM fit that description. They may not be bad things to do. Owning a book on shoes isn’t necessarily a bad thing. But it may be better for your business to spend your money elsewhere first.”

It is this perspective that gives rise to the firm’s ‘information gravitation’ aspiration. The term has its roots in cosmology and astrophysics. Alber is someone who has long been struck by the elegance of the universe’s machinery which, he explains, operates according to a relatively small set of principles and constants of which gravitation is one. As those play out, the right things happen.

“You might say that each element in the system has all the information it needs to do what it needs to do at every moment,” says Alber. “Satellites orbit, planets spin and the stars carry on their merry way. We asked ourselves, what if we could construct information systems so that at each decision point our decision makers had all the information they needed to do what they need to do? Suppose they didn’t have to search or otherwise struggle to get that information? Suppose it was simply part of the fabric of their everyday lives? That is the aspiration inherent in information gravitation and it has informed many of our decisions over the course of the past number of years. I can’t say that our aspirations are fulfilled yet. Constructing an information universe is, it turns out, a bit of work. But I think we are very much better off for having set down this path.”

The firm concentrated on data architecture as its first priority. For example, for information to flow freely, how you identify an individual in one system needs to be identical (or at least easily relatable) to how that individual is identified in other systems.

The firm made fundamental changes to all its systems to ensure that this was possible –for example, by using unique employee identifiers consistently throughout its systems. Once that was done role data in, say, the HR system, could be used to determine data access to financial information, competitive intelligence, or engagement particulars. Many similar steps were taken with other types of data, the net result of which is that users can now reach into any system and relate its information to that in any other.

Bryan Cave finds it enormously useful to be able to do that, as Alber elaborates. “By 2003, we were ready to turn to other things and it was time to determine what areas of knowledge we would give highest priority. I remember that in that time frame the marketplace was rife with KM ‘solutions’,” he says. “Vendors large and small were proposing that we adopt elaborate, expensive and largely stand-alone systems to manage what we know. We chose not to pursue those. Rather, we shifted our focus to making business knowledge much more accessible to decision makers in the firm. And by decision makers, I mean those lawyers who staff and price matters for our clients every day. We foresaw that the marketplace would change in the coming years, and we believed that having command of the fundamentals of one’s business would become very valuable indeed.

“In this day of increasing price competitiveness and increasing resort to fixed fees and other alternative fee arrangements, I am very glad we oriented our priorities in that way. I might add that we were also very interested in enterprise search at that time, but judged the tools then available insufficient to the task.”

The firm began in 2003 by developing, first, a set of business key performance measures – half a dozen indicators of the strength of a particular engagement or client relationship. These were developed by the firm’s Operating Group – the day-to-day management committee, on which Alber sat, in close collaboration with the firm’s core management functions. The Group also worked closely with the Executive Committee – the firm’s board – in developing and refining those performance measures. These refinements have continued, changing the way the firm measures profitability, for example, and adding a couple more measures.

The firm then set about developing a suite of tools that permitted lawyers to plan and track engagements with reference to those key business measures.

Since 2003, the firm has gone through a number of versions of those tools and they are now quite comprehensive. Alber considers that the firm has as much access to the fundamentals of its business as any firm in the world. The impact of such access, and of having chosen (if not in the first instance, then by iteration) effective, actionable measures is significant. “We can point to, for example, dramatically increased billing speed as one such result,” he says. “Within months of having finally hit upon an effective way of conveying bill speed, we saw nearly a week taken off average time to bill.”

Bryan Cave has no traditional KM staff. Instead, it has focused on building a cadre of developers, project managers, business analysts and content specialists, who can help the firm’s lawyers create innovative solutions for clients’ legal and business problems. The firm has concentrated on two discrete areas in the past ten years: the creation of client-facing KM and, more recently, the development of enterprise search.

Having rejected turnkey KM systems, such as those available from big legal vendors, its first client-facing KM system was a trade law decision support system. Development of that system required a “Vulcan mind meld” with the lawyers in the trade group, to arrive at a set of decision rules that could be embodied in an application that delivers legal advice to clients. When coupled with an innovative pricing and staffing model, the support system application proved a hit and has been in use ever since.

From that start, the firm has plunged further and further into client-facing applications so that it now has many hundreds of web-based applications up and running, These range from decision support systems, to training systems, to workflow systems to full-blown database applications (such as how to manage a due diligence process). Very often, the development costs for these applications are paid for by clients, which means that the return on investment is real and tangible, both financially, and in terms of deepening the relationship with clients.

A recent example of another ‘Vulcan mind meld application’ is one the firm built to streamline the process of doing due diligence in connection with the sale of units of cellular radio spectrum. The radio spectrum licenses and radio stations themselves, which constitute the principal assets of wireless companies, are highly complex constellations of legal obligations. In the US, the Federal Communications Commission regulates radio spectrum very closely. When selling assets that include radio spectrum, extensive due diligence is required to ensure that the assets comply with all regulations and that any underlying physical infrastructure has no entanglements (for example, bad leases or incomplete property grants). The complexity of that can make legal expenses a very significant component of the costs of sale of spectrum.

For a client contemplating the sale of a large portfolio of such assets, Bryan Cave created a way to ‘repackage’ what its most expert lawyers knew into a form that could be used by relatively junior lawyers and by contract attorneys. The system was a complex database application that embodied extensive ‘workflows’. These workflows guided the attorneys doing the due diligence through the labyrinth of steps necessary to assure high quality due diligence. The application also gave supervising attorneys and clients the ability to monitor workflow and progress.

Distilling this complex knowledge into a workflow enabled the firm to significantly reduce the per-unit cost of due diligence for a very large volume of assets and produced a very happy set of client business executives. This application, by the way, was recently featured in the Wall Street Journal.

Alber emphasises that the creation of an application of this type requires lawyers to step far outside their daily practice routines and comfort zones. Lawyers must shift their thinking from one focused on learning to recognise problems, to that of teaching others how to recognise problems. It takes a special team to be able to manage that shift.

Alber confirms that client-facing KM will continue to be a major focus for the firm, with the current economic climate spurring it on to look for innovations in how it delivers its legal services and to find ever more effective ways to apply what the firm knows to client problems.

In respect of the firm’s second KM strategic initiative – that of enterprise search – it has implemented a system (within the Sharepoint intranet) which is consistent with the intranet’s ‘gravitation’ model approach. What does this mean? The system pulls together all matters relating to a particular client by making use of one commercial search engine across all of its applications to drive the search for documents, expertise, matters and more. It also moves away from a discrete Google-like search approach (requiring a user to initiate a query) to one that pushes or ‘gravitates’ content to users that is appropriate to the decisions they are most likely to name. So, although not yet a reality (as Alber freely admits) in an ideal future world, when a Bryan Cave lawyer picks up a call from a client, the firm’s systems should know who that is, what the firm is doing for him or her, the status of those efforts and the business particulars of the engagement.

“Information at the fingertips when a call is answered is the objective – pushing search much more deeply into day-to-day activities – far beyond being simply a means to access the document repository. Evolved enterprise search - a vehicle for making better business and legal decisions,” says Alber.

And as for the firm’s intranet, it is developed around a new media model to facilitate its use as a KM tool, and borrows many elements from Facebook, LinkedIn and the like to help build ‘communities’ of knowledge – of which there are approximately 90 to date. These share knowledge tools – including wikis, blogs, threaded discussions, newsfeeds, and idea repositories, to name but a few.

Alber does not envisage US firms building cadres of PSLs as has happened in the UK. “I don’t think US firms have an appetite for that,” he says. “There are people who act as ‘knowledge specialists’ or ‘knowledge managers’ inside some US firms now, but I don’t foresee those ranks growing by much. Indeed, we’ve seen a diminution in the ranks of such professionals over the past year or two and I expect that to be a relatively long-term phenomenon. The connection between traditional KM and client service or revenue is too attenuated. While that can be overlooked in flush times, it comes front and centre in these times.

“Instead, I think you’ll see more firms actively looking for ways to attack the relationship between the value and cost of legal services and using KM technologies as part of that effort. That will increase the need for technologist experts in these areas. It will also create a need to shift some KM expertise more directly into the ranks of practising lawyers and away from dedicated specialists. That is certainly the direction we’ll be taking.”

Food for thought for the rest of us.

Cora Newell is a senior KM adviser and solicitor with wide experience of City firm practice. She is founder of KM Insight Consulting, a consultancy which offers advisory and change management services to firms wishing to develop their knowledge capabilities, information management and business efficiency. A regular speaker at major KM and legal conferences, she can be contacted at newell@kminsightconsulting.com