A lawyer in a mid-size firm recently missed an important deadline that she had promised a business client she would meet. This resulted in an unhappy client who eventually took their business to another firm. Although no ethics complaint or malpractice claim was filed against the lawyer, the loss was huge for the firm, both financially and to its reputation.
The reason for this mistake, it turned out, was that a long-time paralegal left the firm a week prior to the missed deadline. She was the only person at the firm who managed all the firm’s deadlines and knew how to run its legacy case management program to generate reports that lawyers and staff rely on to manage their cases. When she left, her knowledge went with her.
Law firms, just like other businesses, have always been plagued by the “knowledge drain” that happens when experienced employees retire or leave the company. These employees take not only the information they’ve learned during their time, but also the relationships they’ve established and curated when they leave. Firms must find a way to capture and retain institutional knowledge and make critical knowledge accessible if they want to ensure business continuity, provide quality legal services, and maintain a competitive edge.
What constitutes “knowledge” in a law firm?
We commonly equate knowledge to information. The consulting firm, SABIO, defines knowledge as “a network consisting of facts, skills, and capabilities that an individual uses to solve a problem or complete a task.” This expansive definition of knowledge recognizes the intangible data that an individual has which cannot be quantified or documented.
In a law firm setting, knowledge can be broken down into explicit and tacit knowledge. Explicit knowledge refers to facts, technical or legal skills, office procedures and processes, or any information that can be captured, expressed, and transferred to another person. Tacit knowledge is acquired from one's own experiences, observations, or personal and professional relationships. This knowledge is harder to express or communicate linguistically, but still can be shared.
While law firms typically focus on preserving explicit knowledge, it’s important to include tacit knowledge. Both kinds make up the “institutional” or “organizational” knowledge that should be properly managed.
Why is knowledge management important?
The benefits of knowledge management cannot be overstated. Being able to rely on and reuse the collective wisdom and experience of colleagues make us more productive and efficient. Knowledge-sharing improves collaboration between departments, promotes transparency, and avoids reinventing the wheel. With access to important knowledge, a firm can adapt and respond to changes more quickly and out-compete those without such knowledge or access.
Besides those benefits, the ability to manage knowledge effectively allows firms to make important decisions. When knowledge is captured and shared, firms can make informed choices rather than act out of fear. For example, a firm may decide to keep a staff person or attorney who is underperforming or is toxic to the work environment because that person has specific knowledge or expertise that no one else has. The necessary turnover of staff is delayed or prevented due to the firm’s fear of losing that person’s knowledge when he or she departs.
Firms should aim to reach a point where changes such as restructuring, employee departure or retirement, and personnel or leadership transitions will not result in an upheaval due to a potential loss of knowledge. Being able to make strategic, financial, legal, or personnel decisions should not hinge on one person’s employment in the firm. This dependency breeds a culture of information hoarding, creates silos and turfs, and fosters inefficiency and resentment. This environment is not conducive to building or sustaining a successful practice.
How to manage knowledge better
Knowledge management requires firms to create, capture, store, and make available and accessible employees’ explicit and tacit knowledge, work products, and contents. It focuses on three components: people, culture, and systems.
Identify and Connect People
People are the foundation of knowledge that firms need to serve clients and run the practice. So, it makes sense to focus on connecting people with people. Identify people with specific knowledge, specialized skills, vast relationship networks, or information about systems and processes and connect them with others in the firm. This is critical to capturing tacit knowledge. It is through the connection and relationship between individuals that tacit knowledge will be shared.
Connections can be made by creating informal meeting spaces where co-workers can pick each other’s brains, work on joint projects, and hold business or social activities to exchange ideas or pass on wisdom. Through these connections and interactions, colleagues may pick up a new trick or resource, or come up with creative ideas to reuse or repurpose information.
Create a Culture of Engagement and Sharing
Simply getting people together may not go anywhere if the firm doesn’t have a culture of engagement and sharing. Personal connection is premised on a work environment where sharing, collaboration, and a sense of collectiveness are valued and expected. Creating this culture entails both words and deeds.
The words are about firms clearly communicating the values and expectations that promote an engaging and sharing culture to their employees. When employees know what is expected of them, they are more likely to meet those expectations. Values help guide their interactions with colleagues and prioritize competing prerogatives.
The deeds start at the management level. Leaders of the firm need to model the behaviors and attitudes they expect everyone else to have. This means shareholders, owners, partners, and managers need to enter those informal meeting spaces, work on a joint project, or attend activities to share their knowledge and experience. It means asking an associate or a staff person how they know certain things, where they learn their skills, and being open and curious to the information. These modeling behaviors set the tone for the culture at the firm.
Establish Systems to Document Knowledge and Procedures
Finally, no knowledge management is complete without a system to document knowledge, particularly explicit knowledge. Firms already have tools that capture lawyers and staff’s knowledge via documents, memos, files, databases, contact lists, etc. While this may seem enough, there are still “know-hows” and “how-tos” that are not documented. As the story in the beginning of this blog demonstrates, using a software program or running a report is something that becomes muscle memory after an initial learning curve. No one thinks to write down instructions on how to perform those tasks. It is only after an employee departs with that “know-how” that documentation becomes important.
Documentation refers to capturing, organizing, and storing knowledge in a format (written, videos, audios, etc.) that can stay with the firm and be accessible to others. Office processes and procedures are documented in an office manual or checklists. Other types of knowledge are captured in the minutes of meetings, on collaborative platforms such as Teams or Slack, or in emails, memorandums, and attorney work products. Storing all this information in a centralized location with some sort of structure or organization makes it easily accessible and usable.
Attorneys and staff may not automatically start to document their knowledge unless they know it’s required or expected of them. This goes back to creating a culture of engagement, sharing, and documenting. If someone at your firm utilizes an alternative service of process or does something complex for the first time, ask them to document the steps in a checklist. The next person who then uses that checklist should refine the steps with additional information they learned. Ensure that departing staff have sufficient time to train their replacement or at least create a checklist on how to do important aspects of the job.
Firms should have a succession plan for lawyers or staff looking to retire. The vast amount of knowledge and information that a long-term employee has needs to be captured and retained to ensure that the firm runs smoothly throughout this transition. The plan should identify how that person’s responsibilities will be delegated and to whom, among other things. The goal, as mentioned earlier, isn’t to have one person be the primary knowledge holder on key firm operations. This concentration of knowledge can be a threat or a liability to the firm. Succession planning is also a good opportunity to develop high-potential employees for growth and leadership in the firm.
The legal profession is driven by knowledge. Lawyers provide advice and counsel based on their knowledge of the law. Staff help run the law practice based on their knowledge of processes and procedures. Capturing all this diverse and comprehensive information is priceless and essential to the continued success of any firm.