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Faces of Innovation Full Report

FACES OF

INNOVATION

 


 

From Innovation

to Implementation

 

How Knowledge Management Leaders and

legal Tech Are Reinventing Law Firms

 

.01
Executive
Summary

Law firms worldwide are embracing innovation, and knowledge management leaders are central to helping them adapt to an increasingly competitive marketplace. To understand how law firms are transforming themselves from the inside out, Nuix engaged Ari Kaplan Advisors to fuel a discussion with KM leaders in six countries. We examined strategies for reimagining the delivery of legal services, the impact of technology on that shift, and how firms are embracing a fluid, ever-growing information landscape.

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82%
82
reported that their law firms were leveraging insights from Total Data Intelligence and taking a holistic look at their data.

Background

Between May 30, 2019 and July 19, 2019, Ari Kaplan Advisors interviewed 33 knowledge management leaders from law firms in Belgium, Brazil, Canada, the Netherlands, the United Kingdom, and across the United States.

  • Fifteen served as their firm’s chief knowledge officer, eight were directors, and the remainder held similar leadership roles.
  • More than half worked for firms that earned more than $500 million in annual revenue.
  • Two-thirds (64%) were at firms of more than 1,000 employees.

The Transformation of Knowledge Management

Our survey found clear evidence that law firms and their knowledge management practices were undergoing considerable transformation. All respondents but one (97%) reported that their role had changed in the past few years.

“KM professionals are working with more technology and are involved in areas such as pricing, conflicts, and business intelligence,” noted one participant.

“KM is now responsible for looking at the business of the firm as a whole to take advantage of all of the tools available on the market,” remarked another.

More than half (55%) could specifically identify when their responsibilities moved from an exclusive concentration on knowledge management to a broader focus on innovation. The remainder noted that it was a gradual transition.

“It has been part of our fiber for a while, so it was more of a morphing than turning the corner; the formality around it, however, was key,” said one leader.

“When we transferred to a new managing partner in 2015, who was more focused on reconsidering all of the firm’s processes, receptive to new ideas, and eager to test new technologies, there was a clear shift,” countered another.

59%
59
of law firms surveyed said they were building their own technology for knowledge management.
88%
88
noted that law firms were reconfiguring roles and shifting responsibilities to accommodate the changing nature of legal services.

Roles and Responsibilities are Shifting

Almost all participating KM leaders (88%) noted that law firms were reconfiguring roles and shifting responsibilities to accommodate the changing nature of legal services.

“We have many new roles, including data scientists, knowledge systems engineers, and best delivery advisors, who work in hubs with KM and IT,” said one knowledge management participant.

“We are changing both client-facing and internal roles to meet the demands of the marketplace and the evolution of service delivery capabilities,” added another.

 

 

Client Expectations and Demand for New Services Are Prompting Firms to Deploy Multidisciplinary Teams

Three out of four respondents (78%) noted that client expectations were prompting law firms to assemble multidisciplinary teams.

“Clients are not asking for multidisciplinary teams, but they are asking for things that require backgrounds with legal, project management, and business process talent,” said one participant.

“There is a wave of change, but individual conversations with clients are unspecific, such as requests to change a business model or leveraging alternative fees,” offered another.

Collaboration Is High

Most respondents (58%) rated the level of collaboration between their knowledge management team and the firm’s lawyers, paralegals, and professional staff at a four out of five (five being the highest); one-third ranked the level of collaboration at a five.

“It is the best firm I have ever worked for from a collaboration standpoint,” said one leader.

“We have far more demand than we can meet so we try to align with the coalition of the willing; we are, therefore, selective about who we work with and how extensively we work with them,” added another.

Law Firms Are Embracing Analytics and Machine Learning in the Pursuit of Total Data Intelligence

Four out of five respondents (82%) reported that law firms are leveraging insights from taking a holistic look at their data. This concept of Total Data Intelligence includes the intentional examination, cultivation, and reuse of data after a litigation event.

“It is only recently that law firms have woken up to the gold dust they are sitting on and with that realization, the importance of KM is growing because we are doing the mining,” said a knowledge management leader.

“Data is our number one asset outside of talent,” added a peer.

“Law firms are doing this, but inconsistently; there are some global firms that have taken a total data strategy approach, look at data structuring, and want to apply technology, but not all,” explained a third.

97%
97
reported that their role had changed in the past few years.

Law Firms Are Building Technology

More than half (59%) of those surveyed said their firms were building their own technology for knowledge management.

“I think firms that are inclined to develop technology will continue to do so; it gives you flexibility to build things exactly how you want them with your own branding, look, and feel,” said one participant.

“We made the decision that building technology is not our core business, though we work closely with technology developers,” countered another.

"
It is only recently that law firms have woken up to the gold dust they are sitting on and with that realization, the importance of KM is growing because we are doing the mining."
.02
Defining
Innovation

The definition of innovation varied among the 69% of participants whose firm had gone to the trouble of defining the term. The common qualities were client-focused, straightforward, service-centric, improved, modern, and process-oriented.

"
We consider innovation in terms of process improvements because we work on volume litigation so our margins are small and we need to use technology and better processes to improve our workflow."
55%
55
of respondents emphasized that the combination of process and procedure was more valuable than people and technology alone, each of which received the vote of a single survey participant.

More than half (55%) of respondents emphasized that the combination of process and procedure was more valuable than people and technology alone, each of which received the vote of a single survey participant.

“Process always comes first when we look at innovation,” said one KM leader.

"We consider innovation in terms of process improvements because we work on volume litigation so our margins are small and we need to use technology and better processes to improve our workflow,” added another overseas.

“We implement processes that enable us to deliver more value to clients,” noted a third.

Client-Focused

The interests of clients were foremost for many of the participants.

“It is about doing work more efficiently and in a way that is better aligned to the client’s needs, technically, procedurally, or from a content perspective,” explained a knowledge management professional.

“We look at it from the client’s perspective and innovate if there is value for the client; we focus on client-centric innovation,” echoed another.

Examples:

  • We license a cloud-based contract automation tool for clients to use in a self-service format.
  • The firm created a Dutch and French chatbot for labor union elections.

 

Straightforward

Simplicity was a highly valued component of successful innovation initiatives among many participants.

“There are a lot of complicated definitions out there, but we wanted something simple because it is very much about trying to be a catalyst for change across the organization,” said one KM official.

“We try to bring it down to simple ideas that bring us fantastic efficiencies,” offered a second.

Examples:

  • The firm has a legal project management dashboard that includes matter management dashboards, which help on pricing and planning for future matters.
  • We have implemented a new internal search engine, a digital catalog, an expertise system, and an internal social collaboration function to open the barriers to knowledge sharing helping both business development and the ability to look at an issue from different directions.
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"
We try to bring it down to simple ideas that bring us fantastic efficiencies.”
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Service-Centric

A focus on service to clients was central to innovation among many of the respondents.

“While some think of innovation as primarily or exclusively technology, we emphasize that it is not the case; we broadly view innovation as doing anything that improves our service delivery, including, but not limited to technology,” commented a KM leader.

“Innovation means finding improved ways to collaborate with clients and others at the firm, new services to offer, and new ways to operate the business,” shared a peer.

Examples:

  • The firm actually has an innovation client, which is the chief KM officer, and gives lawyers working on innovation projects up to 50 billable hours for serving that client.
  • We created a data analytics fair at the firm, which offered the lawyers a great opportunity to see specific tools and reports that could be valuable to their practices and enabled us to describe the technology in use.

 

Alterative Improvement

Incremental improvements are a key element of modernization—and KM teams are focused on intentional iteration to make this happen.

“Innovation is akin to disruption; it is trying to develop a better mouse trap or a better way of doing things,” noted one law firm leader.

“Innovation is ultimately about questioning the norm and then doing something about it to inspire a mindset or a behavioral change,” added a second.

“Any firm that has a sophisticated, mature knowledge management department setup is starting to broaden what knowledge management means; they are calling it innovation, but it is often just mature knowledge management,” explained a third.

Examples:

  • The firm has streamlined much of its due diligence work for complex real estate transactions, which has made it very competitive. In fact, other law firms in the state are referring work to the firm because we can do it faster and cheaper.
  • The firm led a hackathon that produced several initiatives, such as a regular feedback loop based on comments from the associates.
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Modern

Most law firms strive for productive change and advancement.

“Innovation emphasizes modernization, so it is important to have a robust strategy towards innovation, ranging from the fancy tools to the basic items that add value to customers; we are a practically-minded firm,” said a participant.

“Innovation means finding improved ways to collaborate with clients and others at the firm, new services to offer, and new ways to operate the business,” remarked a peer.

Examples:

  • We have developed a proprietary tool to help support data visualization in M&A to make legal arguments associated with the competitive impact of the transaction.
  • We have rolled out robotic process automation focused on repeatable tasks. We also use AI to update outside counsel guidelines and we have already been able to produce a quantifiable ROI on two projects.

Process-Oriented

Many of the participants are reimagining an array of processes to transform their organizations.

“We are finding that we can make more of an impact by creating change at the incremental level rather than a single revolutionary initiative,” said one KM leader.

“We want the right lawyers doing the right thing at the right time to avoid inefficiency and give the client the most value when hiring the law firm,” echoed a peer.

Examples:

  • We are developing an internal search tool that integrates all of the firm’s systems.
  • We have people at the firm who seem to be trying to push a boulder with a toothpick so we combine information and systems to assist the lawyers in doing this faster, cheaper, and more accurately than they could with just a manual touch.

The Challenges of Definition

Ultimately, “Innovation means different things to different people,” said one KM professional, whose firm has not established a uniform interpretation of innovation.

“We use the term ingenuity, rather than innovation,” explained a peer.

“Innovation is about doing things differently and unleashing your imagination to challenge the present and shape the future,” concluded a third.

The Transformation of Knowledge
Management

All but one of the respondents (97%) reported that their role had changed in the past few years.

“KM professionals are working with more technology and are involved in areas such as pricing, conflicts, and business intelligence,” noted one participant.

“KM is now responsible for looking at the business of the firm as a whole to take advantage of all of the tools available on the market,” remarked another.

 

.03

More than half (55%) could specifically identify when their responsibilities moved from an exclusive concentration on knowledge management to a broader focus on innovation. The remainder noted that it was a gradual transition.

“It has been part of our fiber for a while, so it was more of a morphing than turning the corner; the formality around it, however, was key,” said one leader.

The Busy Intersection of Knowledge and Technology

The respondents highlighted various reasons for this transformation.

“It feels like the time has come for the people who have always operated at the intersection of knowledge and technology, so it is a good time for KM,” said one.

“The innovation component was not part of my job description and was just a happy accident that it became a component of driving the knowledge management function at the firm; people who have been involved in KM are perfectly placed to spearhead the drive toward innovation because knowledge management has always sat at the intersection of the lawyers, technology, and business services teams,” added a second.

“We are literally the only department that touches every aspect of the matter that comes in the door,” summarized a third.

That said, “I have always been charged with coming up with creative solutions to questions; we have a new bag of tools, a new customer base, and more resources so it has changed and yet it has not changed,” countered one respondent.

55%
55
could specifically identify when their responsibilites moved from an exclusive concentration on knowledge managment to a broader focus on innovation. The remainder noted that it was a gradual transition.
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Leadership Dynamics Have Fueled Change

A number of responses referenced a shift in leadership as a catalyst for change.

“The firm hired a chief of strategy and innovation; his arrival in 2017 at the firm was a turning point because he is able to engage the partners in a more effective manner,” reported one KM leader.

“Four to five years ago, there was a turning point when the law firm appointed a new managing partner and as part of that shift, we started thinking about building the infrastructure from scratch,” said another.

“When we transferred to a new managing partner in 2015, who was more focused on reconsidering all of the firm’s processes, receptive to new ideas, and eager to test new technologies, there was a clear shift,” concurred a third.

 

Innovation Roles Are Redirecting Ideas

The rising influence of technology and the increased emphasis on building a culture of innovation has further elevated knowledge management throughout the legal community. And, there is now a mechanism to foster innovation at some firms.

“My role used to be served through knowledge management, but is now a new role as head of innovation,” highlighted one participant, who noted that innovation was becoming more structured.

“By labeling the role with innovation, it is helping direct professionals and staff members to the correct individual responsible for innovation,” the individual added.

That centralization seems to be a criticalfactor for gathering ideas and evaluating them for implementation.

“The role of head of innovation now serves as a central hub for all of the firm’s new ideas; we are now able to have a cross-functional and cross-cultural debate that is no longer held in silos,” said another leader, who noted that the firm’s lawyers had the ability to add ideas into an innovation platform and share them directly with the innovation team.

In fact, knowledge management now impacts pricing, conflicts, project management, and business intelligence, among other areas. Beyond information management, it is about leveraging technology to deliver better information to support the firm’s clients. In fact, KM leaders are focused on providing strategic and competitive advantages through that information. “Now, the focus is on the cool things law firms are doing and how efficient they can be as a means of attracting clients,” explained a participant.

"
We saw processes that weren't working for our clients and connected certain innovative tools to help and it became obvious that we needed them."

Macro Trends Are Moving the Legal Market

Several participants highlighted industry-wide shifts as drivers of momentum.

“Around 2015 when people started to talk more seriously about artificial intelligence, which emerged as a buzzword, we focused more heavily on innovation,” recalled one respondent.

“It was 2010-2011 with the emergence of legal operations and a heavy focus on process; the moment that the client took notice and asked us to do things differently, that is when the role of KM expanded,” offered another.

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Data Intelligence Matters

One interesting focus has been on curating data over the past few years.

“There is an increasing recognition of the value and importance of data; when KM moved from being about content and people to equipping a law firm with business information to help it function, firms realized the importance of having well-curated and managed data,” noted one leader.

“The new frontier is mining all of the document content and new technology to allow the firm to gain new insights, including through AI, that help the firm understand trends in the market and provide better service to its clients.”

For many, “It has been a series of smaller steps rather than an epiphany and it continues to evolve as we learn from the initiatives and projects in which we engage; it is a constant evolution of strategy,” offered one KM leader.

“We saw processes that weren’t working for our clients and connected certain innovative tools to help and it became obvious that we needed them,” noted another.

One participant highlighted a key defining moment: “Two years ago, I attended a conference and heard a presentation by Patrick DiDomenico; I read his book [Knowledge Management for Lawyers], put his ideas into practice, and that was the turning point.”

Another specifically remarked: “There was one RFP to which we responded in early 2019, which seemed like a turning point because if we didn’t have a sophisticated knowledge management program, we would not have been considered.”

Measuring the
Impact of KM

More than two-thirds (70%) of KM leaders said they measured their performance, though for many it was based on impressions and feedback rather than quantifiable metrics or KPIs.

 

.04

“We evaluate the annual knowledge strategy, which includes soft and hard targets, and also distribute a global knowledge survey every two years where we ask about our services and products,” said one leader.

“The KM team has monthly progress meetings with firm management and is evaluated based on those status updates; it is also assessed on achieving quarterly goals and adhering to an annual review,” offered another. “ My success is driven largely through adoption so change management is a key piece of what I focus on,” said a participant. Increasingly, KM can be tied to business development.

The 30% of KM teams whose performance was not measured typically focused on incremental changes.

“It is a largely anecdotal world of marginal gains; occasionally, you make some big leaps, but it is often about small improvements and small wins,” said one law firm leader.

“There are standard assessments of whether we meet goals, but KM is notoriously difficult to get a hard ROI on; we are now working directly with clients and there is a much more obvious connection between the work we are doing and the nature of the client engagements,” offered a peer.

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"
My success is driven largely through adoption so change management is a key piece of what I focus on.”

A few noted that innovation itself was determined by behavioral change and an increased demand for the projects it created.

“My success is driven largely through adoption so change management is a key piece of what I focus on,” said a participant. Increasingly, KM can be tied to business development.

“We do generate revenue by completing work that lawyers don’t have to accomplish and one of our goals is to grow that revenue over time,” said an official.

“The KM team is also measured based on revenues that are realized based on its work,” offered another. As the lynchpin between many of the firm’s various disciplines and practice groups, leaders in this area seek to build consensus.

“My performance is often judged on my ability to collaborate; ensuring that everyone plays well in the sandbox is one of my superpowers,” advised a third.

Ultimately, “KM was always focused on innovation, but we recently rebranded it more with innovation because in the industry as a whole, you are seeing the word innovation being used,” explained one leader.

“You also see it from clients in RFPs, who ask firms to talk about the innovative ways they are using technology that differentiates them from their competitors,” added a peer.

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Metrics That Matter for Knowledge Management

The most common metric that KM leaders follow to gauge their success is usage, with 67% reporting that they study these trends.

“From a KM perspective, we track usage, which is a proxy for how relevant and practical our products are,” said one leader.

“The best way of observing lawyers is to track the tools that they use,” echoed another.

“It is more important to track adoption rather than simply innovation,” concluded a third.

Beyond usage, 27% study the impact of KM on client engagement, including new business and revenue generation. As a firm’s knowledge initiatives become more diverse and increasingly provide a competitive advantage, this metric will likely be used more frequently.

“We evaluate how often and extensively clients access our knowledge resources,” said one KM official.

“We report on the number of research requests, and the number of competitive intelligence briefings that led to pitches and later to clients; we track any metrics that lead to outcomes of which we are aware,” noted a second.

“We are working on a set of metrics where we can see how often innovation is part of pitching, part of a matter, and generates direct value for the firm and the clients,” added a third.

This metric is particularly important for firms that license tools and subscriptions, such as those organizations that have developed GDPR and CCPA compliance applications.

.05
Roles and
Responsibilities
are Shifting

Almost all KM leaders (88%) noted that law firms were reconfiguring roles and shifting responsibilities to accommodate—and influence—the changing nature of legal services.

“We have many new roles, including data scientists, knowledge systems engineers, and best delivery advisors, who work in hubs with KM and IT,” said one knowledge management participant.

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“We are changing both client-facing and internal roles to meet the demands of the marketplace and the evolution of service delivery capabilities,” added another.

The growth of law firms and the professionals that serve within them, as well as the proliferation of non-traditional competitors has expanded the range of responsibilities and array of leaders contributing to each organization’s success.

“We are constantly thinking about how to offer more value to our clients because they have lots of choices, particularly given the encroachment of accounting firms and other providers of legal services,” said one leader.

For some organizations, the shift offers a way to demonstrate enhanced client service.

“Firms are adding chief innovation officers and chief client service officers; they are steps to show clients that firms are listening,” noted one.

“It is not innovation for the sake of it; we do it because we think it will bring value for our clients,” offered a colleague.

It also reflects a recognition that firms that thrive often do so by developing holistic teams to support their matters.

“For a long time, the practices and administrative staff were separated, but that is no longer the case since we need more roles that can work with attorneys and empathize with them,” said a knowledge management official.

“There are also more non-practicing attorneys in different administrative roles,” added a peer.

Examples of the shifts include:

  • “We have shifted the business development strategist role away from marketing and into practice management; you are seeing an integration to more effectively help lawyers with their practices.”
  • “We have assigned people to IT, who have not traditionally been in that department, such as the library staff, which has moved from dealing with books to information services; that has allowed us to have a broader IT strategy to identify ways that the firm can be more efficient with IT.”
  • “A couple of years ago, you did not see chief pricing, chief innovation, and chief client officers, but now there is a recognition that law firms need to adjust to meet client demands.”
  • “We have more innovation lawyers and professionals, practice support leaders, embedded researchers, legal project managers, and others that did not exist a decade ago.”
  • “You are seeing people who are responsible for data, such as the head of data analytics or of data science, and innovation, such as the head of innovation, client value, and client satisfaction.”

 

While there are many new initiatives and a diverse focus, most transformations are occurring gradually. “When we talk about change, we need to talk about it generationally; nothing transformative happens overnight,” said one participant. Part of this trend also reflects a shift in perception. “The legal industry is substituting the term ‘non-lawyer’ with ‘multi-disciplinary professional', so, there is also a shift from needing a JD to needing other experience,”noted another.

 

"
We are constantly thinking about how to offer more value to our clients because they have lots of choices, particularly given the enroachment of accounting firms and other providers of legal services."

Client Expectations Are Prompting Firms to Deliver New Services Powered by Multidisciplinary Teams

Three out of four respondents (78%) noted that client expectations were prompting law firms to assemble multidisciplinary teams.

“Clients are not asking for multidisciplinary teams, but they are asking for things that require backgrounds with legal, project management, and business process talent,” said one participant.

“There is a wave of change, but individual conversations with clients are unspecific, such as requests to change a business model or leveraging alternative fees,” offered another.

While client expectations are prompting firms to alter their teams, “Clients are not interested in how the sausage is made; they are asking for improved, efficient delivery of services, which is reflected in what they pay,” explained a KM leader.

“They are asking us to be more agile in how we serve them, and you need to have different skills at the table to get it right,” advised a peer.

To anticipate and respond to certain client needs, various firms are reevaluating their approach.

“We have found that our client service feedback program is helping us identify new projects; and, showing the partners what clients are saying helps the KM team execute on new initiatives,” reported a participant.

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“Traditionally, the relationship with the clients was with the client lead or the lawyers, but with the rise of the [Corporate Legal Operations Consortium], there is a lot more interest in KM and the firm’s technology and processes,” added another.

“In the innovation space, where KM plays a role, many of the ideas come from clients,” offered a colleague.

In fact, technology is a key driver of this shift. “You can still write a valid agreement with pen and paper, but clients are putting pressure on firms to use the latest technology; for example, clients are demanding electronic data rooms and access to their own information in real time,” highlighted a KM official.

The efficiencies that those tools generate are also in demand.

“They are asking for solutions related to technology, process improvement, and price predictability; having access to data, people who understand the history of matters, and those who manage the matter is an attractive combination,” said another.

Collaboration Is High

More than half (58%) of respondents rated the level of collaboration between their knowledge  management team and the firm’s lawyers, paralegals, and professional staff at a four out of five (five being the highest); one-third ranked the level of collaboration at a five. 

“It is the best firm I have ever worked for from a collaboration standpoint,” said one leader. 

“We have far more demand than we can meet so we try to align with the coalition of the willing; we are, therefore, selective about who we work with and how extensively we work with them,” added another.

Collaboration is a critical factor for many firms because it fuels executive support, raises awareness of KM’s impact on the firm’s overall success, and unifies the firm’s array of talent. 

“We built practice innovation teams to have lawyers come up with ideas and get involved in developing them for the benefit of the client; our central team is fairly small, but our model is to leverage people around the world and their ideas,” remarked a KM leader. 

“We have a cross-disciplinary or multi-disciplinary group of people, such as HR, business development, client value, legal project management, and  technology, working towards each initiative; everyone is simply working together to better the firm in every way possible.”

That said, “It is a large firm so there are logistical challenges associated with universal collaboration,” advised one respondent. 

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Also, “People are not fully aware of what we can do so we need to communicate our skill better; we are prepared to help, but people are still afraid of technology changing their lives and taking over their jobs or are concerned that it is inapplicable to their practice.”

For some leaders, the level of collaboration is most significant within different segments of the firm. 

“There is a lot of back-and-forth, with some practice groups more than others; KM is deeply embedded into the leading practice groups and I cannot imagine how collaboration can be higher at the firm, though we work more closely with some groups than others,” commented one participant.

“In some practices, there is a practice support lawyer and, occasionally, an embedded researcher, so the level of collaboration is 100%, while in other practices where we don’t have those representatives, the level of collaboration is lower,” added another.

 

For Others, It Also Varies Depending on the Project 

“We have innovation projects where lots of lawyers are involved, but we also have the problem that while we would like lawyers to remain involved, their billable work takes priority,” offered a respondent. 

And, there are regional differences as KM is more mature and widespread in certain areas. 

“There is a different approach to knowledge management in the UK than in the US; we have KM lawyers who have decided to stand back from client work so there is a very high level of collaboration with these individuals because they are experienced lawyers who understand the model,” explained a KM leader in the UK.

Law Firms Are Leveraging Analytics in the Pursuit of
Total Data Intelligence

.06

A common cause of conflict between litigants and their law firms and service providers is the need to reprocess and reexamine the same data for subsequent litigation events. A Total Data Intelligence approach avoids this issue by examining and cultivating data after a litigation event to reuse in subsequent litigations or to gain further insight.

Four out of five respondents (82%) reported that their law firms were leveraging insights from total data intelligence and taking a holistic look at their data. 

“Data is our number one asset outside of talent,” added a peer. 

“It is only recently that law firms have woken up to the gold dust they are sitting on and with that realization, the importance of KM is growing because we are doing the mining,” said a knowledge management leader. 

“Law firms are doing this, but inconsistently; there are some global firms that have taken a total data strategy approach, look at data structuring and, want to apply technology, but not all,” explained a third.

While this trend is likely to continue, it remains somewhat immature. 

“We are trying but have not reached an optimal level; all firms are trying to their best to figure out how to take the data that they have and distill it to predict the future,” said a respondent.

"
Data is our number one asset outside of talent."
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There are significant obstacles associated with this effort, ranging from information management and infrastructure deficiencies to cultural changes and a need for new protocols. 

“Law firms are trying, but there are challenges with the data itself in law firms because it is often in different systems that don’t speak to each other,” reported a KM official. 

“They are talking about it a lot but haven’t really produced anything yet since it is very hard in the legal profession to harness the data because it is in legacy systems and also subject to privacy and confidentiality restrictions,” added a peer. 

There is also a practical impediment to optimizing data. 

“The quality of the data that clients are relying on is flawed because of mistakes in choosing proper codes,” noted another.

Some are pooling the readily-accessible information that they have today to draw conclusions. 

 

“We try to tie data, such as HR, financial accounting, CRM, document management, and other information together.”  

Despite the progress and effort, “A lot of law firms have a long way to go,” said one leader. 

“I don’t know that anyone is doing this very well,” said a peer. “Law firms are doing this, but inconsistently,” noted a third.

To increase their effectiveness in this area and to accelerate the process, several participants highlighted the rise of the law firm chief data scientist and the need for greater investment in data. 

“Data is a new asset and law firms realize that they need to exploit it better,” said one. 

“Before you can take advantage of Total Data Intelligence, you need to invest in it,” added another.

As part of that investment, a few mentioned the emergence of data lakes as an option for marshalling their information.

“Our firm is thinking of combining public data and merging it with its own proprietary data, which could provide a new competitive advantage,” advised a KM leader.

"
Our firm is thinking of combining public data and merging it with its own proprietary data, which could provide a new competitive advantage.”

Law Firms Are Building Technology

More than half (59%) of law firms surveyed said they were building their own technology for  knowledge management. 

“I think firms that are inclined to develop technology will continue to do so; it gives you flexibility to build things exactly how you want them with your own branding, look, and feel,” said one participant. 

“We made the decision that building technology is not our core business, though we work closely with technology developers,” countered another.

For those building technology, there is great excitement. 

“Our firm has a legal technology subsidiary that offers another opportunity to get close to clients and engage new clients; the signs are promising,” said a KM leader. 

“We are creating custom solutions for clients, but we are not selling tools independently, yet,” offered another.

That success is also influencing others. 

“The firm is even considering a technology spin-off that develops systems and programs,” offered a peer. 

“Our CFO is of the mindset that law firms will become software developers so we are headed in that direction,” concurred another. 

“Our technology is only for internal use at this point, though we do daydream about selling it to other law firms,” remarked a third.

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6%
06
respondents had developed subsidiaries to build commercial applications to license to their clients or beyond their firms into the broader legal community.

Of the limited sample set, 6% of respondents had developed subsidiaries to build commercial applications to license to their clients or beyond their firms into the broader legal community. Those that had not still might share it to enhance their business prospects. 

“We are bringing technology together to create solutions for our clients,” said one participant. 

“We don’t charge our clients for our platform, but it is a value-add,” noted another.

For many KM leaders who are not building their own tools, resources are an issue. 

“We don’t have the resources to build our own technology or the internal strength to do so,” said one. 

“It is too expensive and a law firm cannot attract the best development talent,” remarked a colleague. Given those resource constraints, some cannot remain up-to-date. “We cannot move fast enough to build from scratch.”

A third of the responding KM leaders follow a hybrid approach of customizing technology, rather than coding it entirely. 

“We try to build tools for internal purposes but are  just as open to buying technology and customizing it,” said one. 

“We are looking at ways to customize tools from vendors and also building technology for in-house purposes,” noted a second. 

“We are using out of the box software, but  developing certain elements to tailor for our needs,” another concurred.

For many, their firms decided that building technology was not aligned with their strategic plan. 

“We made the decision that building technology is not our core business, though we work closely with technology developers,” advised one leader. 

“It seems cheap to build something, but if you want to remain up to date, it is more involved and it is not our core business to build software, so it doesn’t always make economic sense,” added another.

What's next
for knowledge
management?

There were a variety of predictions about the future of KM, including that “There will be much more focus on data so all KM professionals need to understand what data is and how firms can leverage it,” and “It will be a more multi-faceted role that combines legal knowledge and technology.”

.07

One leader advised that in the new era of KM, “We will continue to solve problems  and make the experience better for attorneys and clients.” 

In fact, the expectation of more client interaction was common among the participants. 

“We will almost be working directly with the clients and I see my role focused on marrying the internal operations of the firm with the legal operations of the client,” offered one. 

KM professionals “will be the go-to people for specific questions regarding client service, as well as intelligence on the business of each client,” said a participating leader. 

“Technology is grand and fabulous allowing us to do more for less, but it fundamentally comes down to human relationships; I think humans will teach technology how to fill our gaps, which will be a fascinating wave,” offered another.

Despite the focus on KM teams, in a few years, law firms are likely to enjoy more machine-powered support. 

“The future will see a lot more self-service knowledge management, where users can find information more directly without the need for an intermediary to help,” suggested one leader. 

“We will see a shift of technology handling documents or reviewing documents the way we will have autonomous vehicles,” noted another.

“There is a lot of commoditization that can and should be done with what we do, the more people can access knowledge at the time of need, the better; it will be embedding the best knowledge we have into technology,” concluded a third.

The future will see a lot more self-service knowledge management, where users can find information more directly without the need for an intermediary to help,” suggested one leader.

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find out more about our speakers

 

Ari Kaplan

Principal Ari Kaplan Advisors


 

Caroline Sweeney

Director on Knowledge and Innovation at Dorsey & Whitney

 

Paul Sirkis

Managing Director in the Legal Department at Macquarie Group

 

Bryant Isbell

Managing Director, Global eDiscovery & Data Advisory, Baker & McKenzie, LLP