The better it is to be a partner at firm X, the worse it is to be an associate

Titled Big Firm Blues, Bruce MacEwen has blogged on an interesting correlations exercise on last year's AmLaw associate satisfaction survey and PPP numbers. What he found (working on this together with Prof. William Henderson) is alarming in terms of prospects for the future of law firms. The bottom line is that the higher profits are per partner, the lower the following indices are likely to be:

• associate satisfaction
• interest level of work
• partner-associate relations
• openness of finances
• communication toward partnership status.

I would say that at least associate satisfaction and interest level of work can be dealt with by investing in knowledge management:

1. Most obviously, if all the menial tasks like drafting basic stuff over and over again are taken away from an associate because it can be found in a well maintained KM system, (ideally honed by constant feedback loops and therefore of high quality) more interesting work is likely to be in the pipeline. More interesting work of higher value that is...
   
2. Associate satisfaction I believe is connected point 1 as it is certainly more satisfying to do more interesting and higher value work, but this can also come out of a culture of collaboration, which KM can help to foster. It is not rocket science that collaborative people helping each other are highly likely to be more satsfied with their work environment.
   

The last three points, there is not much KM can do about and the danger is, as Bruce says in his posting, the law profession will "continue to be a profession that consistently over-indexes on alcohol abuse, divorce, mid-life crises, and other key indicators of social, emotional, and, dare I say, spiritual, health."

I believe KM can not only make law firms more profitable, but also raise associate satisfaction and the interest level of work, thereby helping law firms to be profitable AND good places to work.

No "delusions of grandeur"

No, I am not getting "delusions of grandeur" as a fellow blogger kindly suggested to me in an email telling me basically not to talk bad about the recently published book by Thomas Davenport. I strongly believe that KM can be a lot more than what the"keynote speakers", "founding fathers" and "distinguished authors" tell you or the software vendors try to sell you without losing a single thought on meaningful measures or culture. It needs a clear link to strategy and the means to understand if it successfully supports that strategy. In a law firm environment there is "neither input nor output that is not knowledge" (Hunter et al. 2002). Of course a laissez-faire approach, against which Davenport warns, is not up for discussion in such an environment.

I think the basic questions and steps to take are:

1. Ask yourself why you want or need to do KM
   Revisit your strategy or get yourself one if you have none. Ask the right questions, such as Why are we managing knowledge? What are the business imperatives? How can we make a difference in client service? How can know we are doing the right thing? What is our raison d'être within the business?
   I still consider the balanced scorecard framework and implementation steps the best suitable framework for this. After all, it is a pattern and not a straightjacket.
2. Derive measures from strategy
   It doesnt need to be a full set of cause and effect relationships (a success map) from the very start. Start gradually with loosely connected indicators but dont loose track of what is important. Dont measure simply because you can and a certain measure is easily available. Measure the things you expect to make a difference.
   
3. Test and refine these measures
   See if they correlate, see if the framework makes sense. See if there really is cause and effect.
   
4. Concentrate on the key measures identified
   How can we excel in the areas we measure? Are they still valid? As reality changes, so do the needs for measures. Redirect resources to those identified as vital and away from those lower in the order of significance.
   

And the beauty of all this is you wont even need complicated software or consultants for all this and it will give you at least some of these outcomes:

• A single management dashboard for a complex task
• Better understanding of KM on all levels of the organisation
  
• More efficient KM services
• The ability to measure and report on cost and resource allocation
• The ability to efficiently track the changing impact of KM and KM initiatives
• Improved responsiveness to financial and organisational issues as they arise
• Improved communication with stakeholders about the services KM provides
• Help in the process of determining returns on investment in KM applications and services.

As Mike Bourne et al. say in their 2003 article: "Measurement has to lead to insight and insight to action". That would be the best possible outcome: Action based on insight based on measures.

Anyways, I learned a phrase today: delusions of grandeur. I use dict.leo.org in cases where I dont understand a word or phrase. dict.leo.org is a good example of a very useful website generated with the help of a lot of people who did not only take from but also give to a free service. And as for the delusions of grandeur: I am not claiming I could write a better book than Davenport and looking at my (almost finished) dissertation I cant say it is the cradle of wisdom, but at least I still have to try the best I can. And I have the right to be annoyed for having spent money on a book that did not get me any further than where I was before.

Thinking for a living by Thomas H. Davenport

I had not noticed the book announcement on the Gurteen newsletter and was therefore very grateful to find it on the blog A Compound of Alchymie and I did like bloghost John Curran did and ordered it straight away.

I never made it beyond chapter 3. From the announcement and the first 40 pages I had expected break-through stuff on measuring knowledge, innovation and such. I had expected that a book with the sentence "How to get better performance and Results" on the cover would actually contain a good deal of knowledge on measuring and managing performance of knowledge workers and not just common places like "A laissez-faire approach to knowledge work wont lead to improved performance and results" under the heading "Recommendations for Getting Results from Knowledge Workers". This was the last sentence I read in the book.

The most useful book - in terms of concrete measures for KM - I have read thus far, is still the 2004 book Strategy Maps: Converting intangible assets into tangible outcomes by Kaplan and Norton which provides very interesting insight into measuring intangibles in general and some good and practical examples on measuring knowledge as well.

BTW - another entry on A Compound of Alchymie is pointing to the checkershadow illusion. Have a look to see how our brain sometimes fools us (the assumption is that square A and B on the picture to the left are the same colour and the evidence can be found here)

"Knowledge in transit"

A picture to support my posting on law firms using KM as a marketing tool...

I saw this van yesterday on Chancery Lane, outside the Law Society and opposite the offices of Denton Wilde Sapte (so yes, there is a lot of lawyers running around there): "It's a knowledge thing". I had seen the phrase before, but what I really liked about this one was the additional sentence "caution - knowledge in transit".

Complexity Science and KM

Complexity science is highly relevant for KM as it is (also) about behaviour of people within organisations and drawing conclusions on their complex interactions.

I first read about complexity theory in the book "The New Knowledge Management : Complexity, Learning, and Sustainable Innovation " by Mark W. Elroy and first heard a colleague of mine speak about it around two years ago. He referred to the topic as an analytical approach to chaos theory, which - to be honest - confused me at the time but becomes clearer with more contact with the subject.

Now knowledgeboard.com is addressing the issue with a Special Interest Group, to be moderated by Carol Webb, who is currently looking for formal expressions of interest by (latest) Friday 9 December 2005. Please contact Carol directly for any questions.

Law firm KM publicity

It is interesting to watch the recent surge in publicity on law firm KM. Over the last week there were some very interesting posts about Ark Group's KM for the legal profession conference: Ron Friedman blogs about the presentation by Jason Marty (Baker McKenzie) and Julia Randell-Khan (Freshfields Bruckhaus Deringer), while Joy London blogs about Browning Marean, partner with DLA Piper speaking out about KM at law firms.

Why the sudden move away from secrecy? Some of the reasons Browning Marean mentioned for pursuing a KM career also apply to this question (summed up by Joy London on excitedutterances):

• Client demands: He pointed out that more and more prospective clients are demanding law firm KM descriptions in RFPs.
• Recruiting: law school recruits are asking firms about their KM systems, mentoring and training programs.
• Capture institutional knowledge: lawyers who move to new firms as laterals are "roving Samurais". The brain drain of their intellectual capital can be enormous.

KM is becoming more than a back-office function. All of the points mentioned above are not only a reason why it is interesting to have a law firm KM career but also a reason to make KM efforts publicly known and I guess we will see a lot more of that soon.

Is the law firm environment ready for folksonomies and social bookmarking?

Folksonomies (technorati tag; del.icio.us tag) and social bookmarking (technorati tag; del.icio.us tag) certainly are among the concepts that are here to stay and will help us in creating a more meaningful network of how we all see the world. Technorati is currently tracking two million tags that can be searched here, del.ici.us can be searched here
and for flickr (photo search, and yes you can find pictures on "law firm") here

I saw this first on an Austrian blog I regularly read (randgaenge by thomas n. burg) and was quite impressed with the power of tags linked on technorati, delicious and flickr. (although on a personal note I am quite annoyed technorati stopped showing the links to my blog from excitedutterances and mathemagenic for some reason, which still worked two days ago).

Powerful, very powerful I think, but only look into this if you have half an hour to spare right now. I took me by surprise and I should be on the other end of Vienna right now rather than still sitting here being fascinated with stuff that is news to me.

Applying this to a law firm environment, several things come into my mind:

1. How about a KM system using user generated tags? That could potentially have saved a lot of large law firms a lot of money and effort that in some cases led to exactly nothing. (Baker McKenzie however seems to have been successful, as Jason Marty, their Global Director of Knowledge Management describes in this article on Modern Practice.)

2. But on the other hand how would you get busy fee earners - who are by large unwilling to submit their know how themselves - to create their own taxonomies using such a tagging tool?

Realisation rate as a measure for the success of KM

Steve Matthews presents the synthesis of a discussion following a posting on Matthew Parson's book discussing two key drivers: leverage and realisation rate.

On the subject of realisation rates, Stuart Kay (Knowledge Manager at Baker McKenzie Australia), one of the early thinkers and writers on KM ROI in law firms argues that "If you simply benchmark KM against gross write downs, you may find yourself ruining the credibility of your KM effort as a result of a couple of poor hires a significant proportion of whose time is written down and over which you have no control or influence. The measure will not be accurate - it will be arbitrary, and you will essentially be gambling with your credibility."

I totally agree and this is one of the basic challenges of any performance management framework that looks beyond the traditional measures and aims at managing intangibles such as knowledge (or image or any other intangible). We can never be certain that there is not a lot of other factors influencing the target of our measures but we basically got to start somewhere. But maybe we should start somewhere below realisation rates. E.g. is there a correlation between usage of KM systems and hours billed in the first place or can junior lawyers be brought up to speed and billing more fees in practice areas where KM is further ahead?

It is important to discuss issues like realisation rates and leverage, but maybe at the stage of measuring KM where most firms I know about currently are, this is beyond a clear and arguable link. I believe performance management is about insight leading to action. If that insight is uncertain (due to many other factors potentially influencing the outcome), how can we determine the right action?

Sometimes these very general benchmarks without a framework of causal links and measures remind me of the ROI calculations of software vendors, which some of you may be familiar with (along the lines of "we implemented XYZ CMS and it saved us $5 mio in two months"). This is where Stuart Kay's notion of "gambling with your credibility" comes back in my mind.