5/20/11

A Shortsighted Solution: "Focus KM Where the Revenue Is"

In my last post, I made a particularly provocative assertion that the Legal KM community was primarily made up of lawyers and that their being lawyers clouded their interpretation of KM in a legal environment so that they were missing the KM needs of at least 50% of the firm, specifically, the staff. I was sure that would get the words flying fast and furious. There would be emergency meetings and conventions. I would cause a great schism in the Legal KM community. The vast majority of Legal KMers would close ranks against my radical ideas, while a select few passionate revolutionaries rallied to my side. Together, we would call on the greater (non-legal) KM community to support our just cause and stand with us against the mighty horde of attorney-centric Knowledge Managers.

As it happened, I got some very lovely polite comments on the blog, a couple of emails and a tweet or two. Not exactly a revolution in the making. However, I did get one response from a good friend of this blog, a prominent Legal KMer, and a lawyer, which has confounded me ever since. He said, “In my opinion you should focus your legal Knowledge Management initiatives on the attorneys because they generate the revenue.” Actually, it was on Twitter, so it was more like, “imo, focus KM where revenue is”, but I interpreted it as the former.

As I have said before, I’m new to KM, my background is in IT, and I’m not an authority in either field. On the other hand, the tweeter is an acknowledged authority in Legal KM and I would absolutely defer to his judgment in just about anything KM related. However, the more I thought about his statement, the less sense it made to me. In fact, I can’t imagine a KMer in any other industry saying to focus Knowledge Management on the areas of revenue generation. (To be clear, the rest of this post is not about the tweeter’s position. I only have a 140 character tweet to go by, it wouldn’t be fair to write several hundred words in response. Following are the thoughts that his tweet inspired in me.)

I appreciate that there may be many good reasons to focus KM on the revenue generators, but I don’t believe any of them have to do with actually improving or increasing knowledge flow within the firm. Self-Preservation is a good place to start. The concept is pretty high on my list and I get it. The attorneys pay the bills, so focus on their perceived needs, look like you’re making an effort to improve things specifically for them, they will appreciate you, big raise, bonus, get to keep your job. That makes sense, but does it lead to better communication, or does it lead to attorneys with rarely used, shiny new tools that do little to nothing to make things better as a whole?

Another possible reason to focus KM on the revenue generators is to show that your initiatives are affecting the bottom line. Go ahead and add Economist to the long list of things I am not, but the connection between KM and ROI seems tenuous at best. It may exist, but I’m not sure it’s quantifiable in a way that would meet Generally Accepted Accounting Principles. David Griffiths over at The Knowledge Core blog made this case in an article called KM: The ROI Myth last March. And even if you could show KM initiatives had a measurable ROI, would a profitable KM initiative be indicative of a successful KM initiative? Or conversely, would a KM initiative that lost money, indicate a failure? I really don’t know. I’d love to hear thoughts on that.

KM is about efficiency and effectiveness, ultimately those things should lead to increased profitability, but I would argue that by focusing KM solely on the points of revenue generation you will never see the improved efficiency at the wider firm level. Law Firms are dysfunctional franchises. Partners may share resources, but they are largely in competition with each other. Sharing knowledge is not their default condition and probably never will be. You have to focus KM on the attorneys for the reasons above and many more, but in order to improve communication and knowledge flow across a firm, you need to strengthen the ties between the attorneys. That means making sure the staff know who, what, where, when, why, and how to find the information that they need to support their attorneys and that they have the ability to share their own lessons learned and best practices. I’m not arguing that a majority of KM resources in a law firm should be devoted to staff, just that we can’t ignore the conduits between the attorneys all together. In many cases, the shortest distance between two attorneys who need to communicate, might actually be through their secretaries.

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3 comments:

Mark Gould said...

I think you are right to be puzzled. Like any other commercial organisation, a law firm needs its internal processes (of which KM is one) to improve profit. That can only come from increased revenue or reduced costs. I don't think focusing on one to the exclusion of the other is wise.

That said, it is obviously essential to prioritise and make choices between the wide array of possible KM actions. In doing that prioritisation, it is important to know what are the real obstacles to improved profits. Once those have been identified, and we have removed from consideration the things that are better fixed by our colleagues HR or Finance (for example), we need to work out which are most susceptible to knowledge-focused interventions.

The important thing about the process I have described is that there is no pre-judgement about the merit of work done for lawyers or non-lawyers. If everything we do is driven by improving profit through better development, application, and use of knowledge then we may end up with projects building on legal knowledge alongside those breaking down non-legal silos. Or we might create something that can be used on both sides of the divide.

David Griffiths said...

Ryan,

I have an article coming out in the professional law journal, "Managing Partner" next month. It is called, "KM: The facts and nothing but the facts". The article addresses the core essence of KM and what needs to be considered when managing the process.

The agreement with the publisher does not allow me to post the article until one month after publication. However, if you get in touch off-line, I would be happy to have an email conversation about the content.

Cheers,

David...and thank you for the link to my ROI blog!

Ron Friedmann said...

My view is that one should always question authority, so I think you are right to challenge the Tweet.

So now I can unmask myself as the un-named person who Tweeted "imo: focus where the revenue".

The challenge with a nanoped (nano op-ed, that is comment on a Re-Tweet) is that I have far fewer than 140 characters.

My thinking behind it was only that if KM requires an investment that requires partner approval, it is much easier to get approval for something that is for lawyers. I am not saying this is good. In fact, I am appalled by the lawyer caste mentality (let the record show I am a lawyer). But I do think it is a realistic political judgment.

As Mark points out, Profit = Revenue - Cost. So if KM can reduce cost by enabling staff, that is good. Furthermore, if KM enables staff to help generate more revenue - e.g., via better client service or marketing - then even better.

So I do not actually see a dichotomy. Only perhaps a political choice in some firms in some circumstances.

I am glad you spoke up because this is a good topic.

Ron

 

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