Strategics and Knowledge Management

There is one thing we are already sure about: Recession has come!

The first question that comes to our minds is: What should we do to face it?

The answer involves some changes that we will have to adopt as well as several  attitudes that we can and must take in our companies (I dare to say they are several ones and they will be addressed in my future discussions), but now I will limit myself to explore some of the ways the Knowledge Management can and should be used in the adjustments of the existing strategies and also in the definition of the new strategies that a modern law office should adopt and follow in the these next “rough times”!

In order to better understand the correlation between the two areas, which is the theme of this article, we should address the concept of Knowledge Management [KM]. And for us to have an idea about the range of the topic,  there are several definitions of “KM” and all of them are very good.

Just for illustration purposes, I mention the definition of Melisse Clemmons Rumizen, as “the systematic process that creates, captures, shares and leverages the knowledge that is necessary for the success of a company”. The other definition I refer to is by Carla O`Dell and Cindy Hubert who state that it is the “systematic effort that allows the information and knowledge to grow, to flow and to create value for the company”.

And being more objective and pragmatic, I prefer the very well adapted and stated concept by the author Patrick DiDomenico, in his book Knowledge Management for Lawyers, where he summarizes the concept of knowledge management:  “to deliver the right information to the right person and at the right time”!

By adopting and applying this concept in the analysis of all the explicit and tacit data and information that exist in all the department scopes of one company, we can surely consider that all this “mass of information” forms the main base for addressing by the Knowledge Management. In the (virtuous) cycle of the “KM”, the information are addressed, organized, indexed, distributed in order to allow their use and, in the end , they are kept and updated to feedback the cycle,  serving to provide grounds and to leverage the critical decisions of acompany. In other words, the “KM” goes much beyond the drafts and the creation of the storage areas of standardized models that some law offices have been using on their intranets.  Those are pieces of information that were usually regarded as being solely and exclusively under the responsibility of the Financial, Invoicing/ Accounts Receivables, Human Resources departments.

1- As a first example, we can mention the treatment of the lifecycle of a client’s subject (“matterlifecycle”).

Traditionally the subjects are recorded in the internal systems aiming at the correct issuance of the invoices, their financial and timesheet control and, in some cases, the team dimensioning and management (still  little frequent).

In addition to previously mentioned basic information (subject name and code, type of collection, invoicing address, contact person at the client and attorney in charge), other several pieces of information must be included, in the several phases of the subject life, so that the KM may address them and use them in the future in a more comprehensive andeffective manner in the strategic and in the marketing strategies, such as:

In the subject creation phase: the correct identification of the performance area and activity fields to which the client is inserted, the detailed description of the addressed topic and all those people engaged (internally and externally), the internal concept of the type of work performed (type of procedural suite, audit, acquisition, merger, etc.), the person in charge of the generation, etc.

In the life phase of the subject: the maintenance and timely updating of all the changes incorporated during the entire process such as, developments, attorneys and consultants engaged, new requests by the client, etc.

In the subject final or closing phase: the inclusion of the information that effectively occurred in the subject, that is, final amounts received and spent, terms effectively fulfilled and relevant documents that were partof the work (final contracts, relevant opinions, legal theses, etc. which are much more important than background drafts).

2 – A second example is the correct generation of a proposal and its budget follow-up.

I dare to say that a small quantity of offices have accurate systems of budget and proposal generation, which in their vast majority, are performed based on remembering the similar cases and in the personal experience of the more experienced partners. The complexity of the recent subjects, the volume of the current and past information and the pressure relative to deadlines and prices make this method a little reliable and, what is worse, with little information that can be used in the future.

The proposals generated by the offices should be based on detailed budgets (in the same way the industries do), and considering the complexity, the team (all the ones engaged and their estimated quantities of hours to be dedicated), the indirect costs and other estimated expenses.

In those two examples (there are others), there are pieces of information contained in the traditional records are neglected and which, when compiled and organized may generate very important statistics in relation to the past, its evolution and the current status related to:

1. What is (are) the main market(s) where the office or the law office has bigger performance or specialization. Currently there is a big variety of law services that are specialized and connected to economic activities, such as “lifesciences”, telecommunications, (satellites, etc.), security on the internet, compliance, in addition to the traditional ones (tax, litigation, labor, etc).
2. Where and how the office is using its resources and, most importantly, where it is being more or less efficient in its results. What are or were the more profitable subject, what were the specialties or the more efficient teams.
3. What types of works performed and their accomplished results.

Additionally, and most importantly,  those statistics can and should guide the marketing and strategy efforts, that is,  which markets and types of companies the office should concentrate its efforts on; what are the stronger and more efficient internal areas, what are the internal weaknesses that need attention and investment, what fields of activity the office has more domain in the subject and that can be expanded by cross-selling efforts,  in addition to helping make decisions concerning team dimensioning and formation, contracting and investment in HR  (courses and training).

The two referred examples were and are being used as important tools to help the Managing Committee of KLA – Koury Lopes Advogados, in the strategic definitions of growth and as guidelines of their marketing actions.

Knowledge Management is a very important tool to be used in the strategic definitions and it must be seen this way by the office managers in the current and future management of their businesses.

The support by an outsourced and experienced consultancy firm, which is also exempt from internal political interactions, may indeed speed up the adaptation process to the new reality !