Thursday, August 15, 2002

Benchmarking KM in US and UK Law Firms

Stuart Kay, in today’s LLRX, publishes an outstanding article titled Benchmarking KM in US and UK Law Firms. The entire article is worth reading, but this comparison between US and UK firms is spot on:

Technology is less of a driver in the UK than it is in the US, and more of an enabler. Because UK firms have been sharing knowledge more effectively for longer than firms in the US, they initially developed more labour intensive, manual systems for doing so (ie prior to the availability of suitable technology). This means that knowledge systems in UK firms tend to be of high quality and to have high added value. Concepts of how technology can be utilised or squeezed to get ‘more bang for your pound’ for knowledge systems are also therefore more sophisticated in some UK firms.

UK firms are more accepting of the labour intensive, manual filtering, classification and dissemination of knowledge in order to ensure that knowledge which is shared is of high value (as opposed to the indiscriminate or automatic dissemination of all information). The business culture and processes for doing this are well established. What is being sought by UK firms is ways of improving these processes and making them more efficient by the optimal use of technology. It is recognised by UK firms that currently there is no technology that will eliminate human input if quality in knowledge systems is to be retained. [emphasis mine] []

Stuart is the Knowledge Manager at Gilbert + Tobin, a 200+ lawyer law firm based in Sydney, Australia. (Odd synchronicity - multiple articles about KM in Australian law firms inside of a couple hours, eh?) This article is the most solid overview I’ve seen of what is going on the US and UK markets. Though he includes a caveat that his survey sample is too small and can’t be conclusive with respect to either market, I can say that my experience (I’ve probably met with 100+ large US law firms in the past 18 months, and 30 or so large UK law firms in the same time frame) is entirely consistent with Stuart’s.

One thing Stuart doesn’t mention is what gave rise to these fundamental differences. I think a lot of it goes back to compensation. If you pay people primarily based on the business that they individually generate, they’re far less likely to see any value in sharing. If, on the other hand, you compensate people on their overall contribution to the firm – and measure contributions on more than just revenue – sharing starts to look a lot more attractive.

Furthermore, firms that invoice clients based on how long it takes them to do something have absolutely no incentive to do that thing faster.

Building your business on inefficiency is like dating Angelina Jolie. At some level, you’ve got to know that she’ll bleed you dry.

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