Wednesday, June 5, 2002

Why Implement Knowledge Management?

Joy linked to an article written by my buddy John Hokkanen in Managing Partner magazine. But MP Magazine doesn’t publish their content online (at least they don’t try and prevent people from linking to it; they just don’t put it online). So I hopped over to John’s personal site, and saw that John published a variation on the article in ABA Law Practice Management magazine in March. Shame on me – I write a regular column for the magazine and can’t believe I missed such a great article. Fortunately, Joy saw it and had some good things to say.

Allow me to quote one excerpt that I think makes a lot of sense (and not just because it promotes a concept my company, Interface Software, focuses on):

… Customer relationship management (CRM) systems … are clearly KM systems, because they seek to capture, maintain and leverage lawyers’ knowledge about current and potential clients. By knowing who knows whom and who has talked to whom, the firm is better able to manage its client relationships, cross-sell its services and connect with prospects. There is something of an arms-race quality to these systems: If a firm’s major competitors have committed to CRM systems, can a firm afford to forego one? Maybe it can, but these systems, like fax machines and e-mail, are driving client-service levels to a new standard and thereby becoming unavoidable business expenses.

“Unavoidable business expenses” are one of four ways Hokkanen sees that firms can justify their investment in KM efforts. The rest of the article is well worth reading – further evidence of John’s leadership in this area.

In a separate post, Joy asks:

The issue remains – how do we get the lawyers at firms like BigLaw to share their tightly guarded contacts? Will they ever share their contacts in a CRM system?

(She then goes on to cite an article from last spring featuring a customer of ours who has had success implementing InterAction a little creatively.)

The answer is, in a word, yes. They will share. But they need a reason to. Simply promote it as good for the firm and you’ll have a bunch of people opt out. If they’re partners, there’s little you can do to force the issue (another sad byproduct of the decentralized management structure in most firms).

Ultimately, the difference in CRM for law firms, accounting firms, and other professional services firms versus a traditional CRM implementation is that services organizations are culturally challenged in ways that product-oriented companies aren’t. I wrote more about this generally a few months ago; but it boils down to compensation and organizational barriers that don’t exist in corporations. CRM system successes depend in part on the organization’s ability to align compensation with participation in the CRM system. Management must support the initiative (vocally) and all stake-holders need to understand why the firm is moving forward. (Lawyers are funny that way: we assume we learned everything we ever needed to know in law school – tell us something is a necessary cost of business and we’re going to at least want some inkling of why.)

For more on some of these issues, check out some of the recent articles on the subject. (Strangely, they all seem to mention InterAction. Wonder what’s up with that?) (Side note: strangest article placement has to be the article in eWeek, a Tier 1 technology pub, that resulted from an article I wrote for Peer to Peer, a magazine for LawNet members. The journalist must have just done a Google search and read my article, since he never talked to me!)

And as long as I’m shamelessly promoting my company while trying to actually respond to Joy’s utterances (!), let me point out that Interface Software was named last week to the Upside 100 list of hottest technology companies in the country. Criteria?

This year’s Hot 100 comprises companies with promising technologies, solid business models, and meaningful growth over the past 12 months – a monumental achievement in this economic climate.


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