Category: Tradition

Institutional memory — a diversity problem?

Mark GouldLeave a comment

The BBC has discovered that knowledge management is important, at least in the form of improving institutional memory. In a report for Radio 4’s Analysis programme, Phil Tinline writes:

Each time someone leaves their job, a chunk of the organisation’s memory leaves too. How, then, do you run complex systems, see through long-term projects, or avoid past mistakes?

Short-term contracts and outsourcing reduce the appetite for learning company or product history. And when job losses land, even more knowledge is lost.

In 2012, one institution found that, as City firms poached its bright young employees, its staff turnover was hitting 28% – faster, apparently, than McDonalds.

And for Her Majesty’s Treasury, after its experiences during the financial crisis, this was rather scary.

The report describes a number of initiatives in commerce, industry and the public sector, but I was particularly struck by the inclusion of the UK civil service as an institution suffering particularly badly from organisational amnesia. How is it that one of the world’s pre-eminent administrative cadres, studied by academics of all types, with record-keeping and archival traditions dating back hundreds of years, can forget experiences and decisions made just a few years ago?

SIgning the way

Tinline suggests that staff turnover is an important component of the problem and I suspect that, as with many other organisations, the faster pace of work probably also plays a part. But what struck me was a reference to ‘folk memory’ by the outgoing Treasury Permanent Secretary. Without trying to read too much into the Permanent Secretary’s words, I think there may be a slight, but significant, difference between ‘folk memory’ and ‘institutional memory’.

When I learnt, and then taught, constitutional law, the civil service was still regarded as a very traditional force within British government. The research of Peter Hennessy and the comedy of Yes Minister suggested that centuries of experience were distilled into power exercised gently but forcefully to sustain a variety of constitutional norms. Almost invariably, senior civil servants were men, Oxbridge-educated, and with good networks across government through which traditions could be maintained. Those traditions contribute to a particular kind of folk memory that allows people to communicate and work more efficiently, since they can rely on a shared understanding.

Even when I was a student, this traditional approach was changing. The civil service recognised the need to improve the breadth of its recruits — drawing people in from roles in the private sector, and working to improve the diversity of recruitment — more women, and more non-Oxbridge graduates. At the same time, the civil service also found itself competing with political appointees — special advisers — for the ear of ministers. Yes Minister gave way to The Thick of It. There is no easy way for folk memory to be transmitted in a more fragmented system like this. What is needed is a concerted effort to develop and sustain shared understanding — the more formal institutional memory.

In a sense, folk memory can be sustained by lazy adherence to outdated standards of recruitment and advancement that lead to a lack of diversity. As organisations (not just the civil service) become more diverse, the benefits that come from diversity are matched by a new burden of finding new ways of ensuring that there is a proper understanding of the organisation’s history. This might be a personal obligation, as shown in the obituary of the late Chris Martin, the prime minister’s principal private secretary.

Martin, who has died of cancer aged 42, had always thought deeply about the place of the civil service in the constitution. He wrote his university dissertation on its role, and was a compulsive reader of biographies and political works that helped him understand its history and its place in the British story. The network of relationships he built up through successive jobs at the top of Whitehall was not just tactical; he used it wherever he could to enlist support for the civil service as an essential institution.

In Downing Street he set up a History Board with Anthony Seldon and Peter Hennessy to record and preserve No 10’s own story.

But organisations cannot rely on there being people like Chris Martin to take responsibility for learning like this. The range of examples provided in the BBC report show clearly that organisational amnesia is a widespread and pernicious problem. Overcoming it should be a priority. Doing so demands careful consideration of the problem, how best to address it, and proper resourcing of the prescribed remedy. What organisations should not do is avoid good current actions (such as improving diversity), simply because they may lead to future forgetfulness. That approach stands in the way of inevitable progress and is lazy.

Breaking silos for client service: the internal view

Mark GouldLeave a comment

Unbundling legal services has become the norm. Less than a decade ago, virtually no firm would even have known what this might mean, but now even the Law Society has recognised in its recent report, The Future of Legal Services, that this is a real choice for firms and clients.

An AdvanceLaw survey of GCs from 88 major companies, found that almost 75 per cent would be willing to move legal work away from the Magic Circle or Top 50 firms assuming a 30 per cent difference in overall cost. Fifty-seven per cent also noted that they find lawyers at the top firms less responsive than those of their second tier colleagues.

Rather than purchasing the full service option, by 2020 an increasing number of in-house lawyers are more likely to have taken work back in-house or opted for unbundled services, where they buy expert advice and assistance at key stages but deal with the actual running of their own cases. And by 2020 we are likely to see general public buyers also starting down this path.

WoodpileIt is interesting that the Law Society presents this as being driven by client demand, as if firms have played no part in the disaggregation process. In fact, whilst this is clearly in the client interest, some firms have played a leading role in thinking more imaginatively about the way in which they provide legal services.

A number of new roles have grown up to support unbundled legal services — legal project managers, matter coordinators, and so on. As such, unbundling is part of a set of practices aimed at improving legal work (including process mapping, greater use of technology , and so on). As Graham Laing puts it, unbundling makes legal services customisable to client needs, which is potentially a very powerful outcome.

Customisation of legal services is about integrating the client into the firm’s value chain. Firms are being required to reconnect with their clients and to compete effectively by recognising market drivers and investing in a deep understanding of client needs and desires. It’s about grasping what clients really want. Listening to them more. Understanding them better. Gathering valuable client information to attain reliable data on market demands will result in services with better market suitability. Merely satisfying what clients ask for is no longer enough for survival in a legal market environment of intense competition.

This is clearly something that clients want, as shown by these two tweets by Brett Farrell, a former lawyer, now responsible for buying legal services:

https://twitter.com/BrettPFarrell/status/701993783827656704

https://twitter.com/BrettPFarrell/status/702974448064856065

[Update: Sadly, Brett has retired from Twitter, so these tweets are no longer available.]

Brett’s view is not unusual, neither in its content nor in its tangible frustration at the current state of law firm client-centricity. Many firms appear to be moving (slowly) in the right direction. But the picture is much less pretty when one looks at how firms organise themselves internally. Real change needs to take place there, and few firms realise it.

Whilst most good firms are actively working on meeting client desires by rethinking the way their lawyers work with each other, with client lawyers and commercial people, with other firms, and with alternative legal providers, there is much less imagination about the way they expect their own business services professionals to operate. If unbundling is right for lawyers, should it not also be considered for internal services? What might that look like?

Although some firms have started to think more imaginatively about how they organise their business services professionals, most still approach recruitment and resourcing questions in a very traditional manner. Looking at the jobs listed on recruitment sites, for example, it is clear that firms still expect sales and marketing professionals to be part of a business development function, technology experts to be in IT roles, and resourcing specialists to be deployed in HR.

Arranging business services like this ignores the possibility that a more effective arrangement might be possible, where the starting point is not “how do we group similar people together?” but “what things need to be done, who should do them, and how should they be managed?” Thinking about deploying expertise in this way might help firms to serve clients better, amongst other benefits.

So, for example, there may be a set of responsibilities that go along with ensuring that the business can work effectively — infrastructural tasks. This would include the provision of core IT services, facilities management, core accounting and financial services, and some procurement and contract management responsibilities. Depending on the volume of work in each of these areas, some of these could be outsourced. Even if they are still done in-house, it is most likely that they can be managed to a specification, which suggests that they might reasonably be grouped together as a single management responsibility. in doing this, the firm might see benefits, such as a common approach to resilience and business continuity, that would be more difficult to achieve if they are separated.

Another approach might work at the other extreme — activities that are intimately associated with the provision of legal services to clients. Here silos can result in competition for resources between different areas, whereas a coordinated approach might allow more transparency about costs and benefits. Take client care as an example. The various people in a firm who come into contact with clients all have a part to play in providing a good (and consistent) client experience. However, few firms would consider managing their front-of-house reception teams (who are often internally managed in a facilities group or outsourced) alongside client relationship managers (more commonly found in business development teams). But those two groups have a lot that they could share with each other to improve the overall performance of the firm. Client management itself is often seen as a role for lawyers as well as expert managers. But not all lawyers take well to the demands of client management, and the client experience suffers as a consequence. Sadly, few expert client managers understand exactly what it is that lawyers do for clients, and this can also affect the client experience. Why not rethink client care completely — perhaps develop an account management capability (including people of all types) akin to the model used in advertising agencies?

Another approach might be to use dynamic teams for specific types of work or projects. A firm wanting to improve the way its technology supports clients, for example, might draw together a specialised group of people — lawyers, technologists, client relationship managers, information and knowledge professionals and financial experts, and others drawn from inside and outside the firm — to dedicate their time to developing a product or service that meets client needs. At the moment, firms tend to go a little way towards this model, but they often make it hard for the project team by expecting some or all of them to carry on with other work. When lawyers keep their chargeable targets, and the IT developers are expected to maintain systems, and the marketing folk have events that need support, all at the same time as being involved in a project, the urgency of the ‘day job’ tends to detract from the importance of the project. Managing the group separately and giving it targets to be met as a group should improve the likelihood that something good can be produced in the shortest time. The cost to the firm is that some less important tasks are not done. That is a choice of priorities that the firm needs to make with its eyes open.

Firms that have adopted a clear sector focus, or that have a set of key clients, might also consider aligning business services professionals with the legal teams working most closely with those sectors and clients. Some firms already do this to some degree, with pricing specialists, relationship managers, and business analysts for example, but there may be scope to broaden the idea to include others. This kind of approach also introduces a form of matrix management that firms don’t always get right. An accountant managed within the firm’s finance team who also has a role on pricing for a sector team might find themselves torn between two sets of management instructions. My experience is that in most firms the client or sector team rarely has a formal management responsibility for business services professionals. If the client experience is supposed to be at the heart of what the firm does, should those teams not be entitled to exercise stronger management control?

Putting the client at the heart of the firm does not mean automatic acquiescence to client demands. The customer is not always right. What this approach does is to allow professionals of all kinds (not just lawyers) the opportunity to participate in improving the way clients are supported. Each specialist will have their own perspective on this, but the current siloed model, with direct client contact reserved to lawyers and a few others, generally inhibits any real understanding of how things might be arranged differently and better. An unbundled, client-focused model can provide firms and their people with a more rewarding working experience.

Unbundling internal services also has consequences for the firm’s senior managers (directors and ‘heads of’ business services groups). In the silo model, each of these people has a clear set of responsibilities, and a fairly fixed group of people to manage. Sometimes roles at this level can become ossified, and sometimes the strategic focus that they should have is overwhelmed by the daily grind of operational management. An unbundled model would allow a firm to think more dynamically about line management, so that senior people can dedicate more time to strategic issues. Equally, unbundling some traditional silos might lead a firm to realise that not all the roles at this level are necessary. But a silo that exists only because it serves the interests of the person at its head is probably one whose work is least connected to the interests of the firm’s clients or its other employees.

I can’t promise that Brett Farrell’s plea for law firms to provide a better client experience will come quickly, but I am fairly sure that if it is to come at all it needs to involve more than just the lawyers. Traditional business services structures are much less likely to help generate the right experience than a more imaginative approach that draws on all the relevant talents that the firm holds.

Partnership and client service

Mark GouldLeave a comment

There is an interesting article on the Lawyer website today. It draws on interviews with a number of senior lawyers about the past and future of legal practice. The whole thing is worth reading, but I want to comment here on some of the remarks about partnership as the organisational norm for law firms.

2014-07-25 20.16.21-2When asked “Is partnership the right model for a 21st century legal services provider?”, most (but not all) of the panel responded positively. It was clear that for them, the mode of ownership was causally linked to quality of client service.

Here are some examples.

Chris Saul, senior partner, Slaughter and May:

I do think that the partnership model is the right model for a 21st century legal services provider.

It brings with it the essential coincidence between ownership and management. That means that all of the owners (the partners) are driven to manage the business and the practice in a responsible, thoughtful, progressive and creative way. Once you divorce ownership from management, problems can arise.

I think that clients very much appreciate the partnership approach. They like the fact that each partner is an owner and is thus naturally motivated to provide the best possible service to the client but in a way that means the full resources of the firm are used in support of the service.

Tim Eyles, managing partner, Taylor Wessing:

I actually like the partnership model. It creates a sense of ownership. That in turn creates glue internally and externally; it engages a team spirit in delivering what’s still a very personal service. We should hesitate before dismissing the partnership model, given the nature of the services that we provide.

If it’s accepted that clients want their lawyers to be in effect their business partners and business advisers, the partnership model is flexible and it engages people, which is hard to replicate in a corporate structure where it’s more pyramidic.

John Schorah, managing partner, Weightmans:

[I]t would be misguided to think the partnership model has no role in the 21 century legal services provider. Partnership can be a really empowering tool and if every partner in a legal services provider did his or her job well, and that empowerment is a big part of that, you will have a really successful legal services provider.

Simon Davies, managing partner, Linklaters:

A hypothetical ‘blank sheet of paper/perfect model’ law firm today comes with no guarantee of long-term success tomorrow. Every operating model needs adapting sooner or later and that’s where the real challenge lies.

Such a law firm might do worse than to build an operation that keeps this need for flexibility front of mind and choose an organisational model that is equipped to respond quickly.

I firmly believe that lockstep firms have a real advantage when it comes to implementing lasting change, largely because of the shared ‘team’ objectives that are inherent to that model.

David Patient, managing partner elect, Travers Smith:

For the time being, yes, I think so, although I am sure we will see different types of legal services providers in the future. I am not convinced, however, that in the short term they will compete for the type of work we do at Travers Smith. A law firm partnership should be built on trust, respect and friendship – ours is, and it’s a key component of our culture and our ability to provide the highest quality service to clients.

Later in the article, the panel is very supportive of the work done by their business services people, which started me wondering why partnership is seen as necessary for lawyers to provide good client service, but (in most firms) not so for their colleagues in other areas. Richard Masters (head of client operations, Pinsent Masons) put it most clearly:

Top quality client service is at the heart of the law firm proposition. It’s not possible to deliver that without really top quality business support, be that IT, facilities or knowledge. Unless business services are respected and integrated as a key part of the overall service solution, they cannot provide the quality of support service that’s needed.

In his recent detailed analysis of the top-level firms in New York and London, Bruce MacEwen showed that those firms appeared to be converging on a partnership comprising about 20% of total lawyers. If that figure is replicated across the sector, it is inevitable that four of every five lawyers working with clients are not partners (although many of those will aspire to become partners, of course, and that may affect their outlook). In reality, the figure may be greater than this — the responsibilities of ownership and management may leave less time for partners to attend to client work than their non-partner colleagues. I’d be interested in knowing whether clients really get better service from the lawyers who don’t own the firm. And of course, virtually none of the business services professionals who contribute to client service will even be eligible for partnership.

I am also intrigued by the idea that ownership (or promise of ownership) generates a more client-focused culture. My experience of working with a range of marketing, IT, finance and other professionals has been that they can be client-focused as any partner. And I have seen partners put their perception of the firm’s interests ahead of those of their clients, to the firm’s ultimate detriment.

I think some of the comments above are actually very context-sensitive. Slaughter and May is not a typical law firm, and it is easy to imagine that its partnership motivates its lawyers to perform in a very different way from others. Just because a model works well in one place, we can’t expect it to translate well everywhere else — other factors will play a critical role.

Coincidentally, today I also read a post by Charles Green on the balance between individual and organisational responsibility for trust and integrity. He is clear that there needs to be personal responsibility as well as institutional support.

A proper view of trust and integrity in business would squarely locate accountability on individuals. The penalties for violating rules should be in the range of 3X the ill-gotten gains, not 1X or less. Auditors may or may not be considered accountable for integrity and trust, but they shouldn’t think they can address these issues solely through risk assessment, monitoring and communications – not unless they address whether or not managers are clearly accountable (cf the recent GM mess), and whether or not the sanctions imposed on them for misbehavior are absolutely clear (e.g. swift termination for ethics violations, period).

One of the problems with partnerships is that (depending on the terms of the partnership deed) it can often be hard to ensure that accountability for poor partner behaviour is as swift and public as Charles Green suggests it needs to be. The behaviour generated by a partnership culture is not necessarily all positive.

I can see why firms cleaving to the traditional partnership model need to justify that choice, but the tone of some of the views expressed in the Lawyer article concern me. They almost suggest that any client choosing to work with a firm that is not organised as a partnership will get a poorer service as a consequence. In reality, my suspicion is that service culture is independent of organisational choice. As more different types of professionals become involved in supporting clients, I hope those clients will judge the quality of that work on what actually happens, rather than the way the business is owned.

The risks of change

Mark GouldLeave a comment

The series of posts on the legal environment will continue, but this is a quick post about change and risk.

I recently met Richard Martin, who is a film and cycling aficionado as well as being a member of Change Agents Worldwide. He wrote a fantastic series of blog posts exploring the idea of the cycling peloton as a metaphor for an agile and adaptive company, but today he wrote about stage 9 of last year’s Tour de France in which the Garmin-Sharp team rode in a way that had never been seen before — taking the other teams by surprise and helping one of their riders, Dan Martin, to win the stage. The story is also told in this video, which is worth watching even for those who aren’t fans of the sport.

https://vimeo.com/72820136

There is a passage in the video that particularly struck me. Charly Wegelius, the Garmin-Sharp director sportif comments on how the sport has become a bit predictable (at 9′ 13″).

A lot of people who work in cycling have got so much experience that they go to sleep in a way, and they stick to their own plans that they’ve done, you know, for many years. They can get caught by surprise because they don’t think differently very often.

I am sure that resonates for people in many organisations. I can certainly see it in many parts of the legal sector.

The downside of being as adventurous as Garmin-Sharp were is that catching people by surprise is high-risk. Rather than getting a stage winner, the team could have completely burned out and been dropped to the back of the race — and possibly even outside the cut-off time for participation in later stages. There was no middle ground. To make this change, they had to take an incredible risk.

It is not surprising that, faced with such risks, organisations avoid making significant changes.

But elsewhere in Richard’s blog post, he describes all the things that have to come together to make a stage of the Tour de France work (informed by watching the third stage of the race this year as it sped through the Olympic Park in London). This interconnectedness — organisers, local communities, police forces, the teams, the spectators, the weather, potentially malicious elements — makes it impossible to predict the outcome even of  a familiar plan. A radical change may be obviously risky, but doing what has always been done could be riskier.

As Richard puts it:

It is this very interconnectedness, this interplay of multiple systems, that reinforces my belief in the peloton formation as an apt metaphor for a modern, agile, adaptive and responsive organisation. One that has to operate under loose frameworks, tolerating risk, constrained by Government and regulatory policy, responding to shifting market conditions, seeking to evolve, transform, succeed, survive.

I think there is another element, which is that different members of the organisation need to have the autonomy to do what is necessary to deal with things as they arise. The Garmin-Sharp team did that. Jonathan Vaughters (the team manager) set the goal and made it clear that the most risky approach was permissible. Charly Wegelius outlined a possible plan of action with the riders, as well as being on the course in the team car giving instructions over the radio. But most importantly, each rider was trusted to do whatever he thought necessary to play his part in delivering the result — each playing to his own strengths and understanding the strengths and weaknesses of the rest of the team (and the other teams) as well as the nature of the terrain.

I am not sure that many organisations can work as well as that.

Improving yield: an agricultural metaphor for organisations

Mark Gould3 Comments

An old way, overgrown As a schoolchild, despite my mother’s agricultural ancestry, my understanding of farming was as basic as the writer of the classic hymn, “We Plough the Fields and Scatter.” The hymn suggests that all one needs for a plentiful harvest are some good seeds, a ploughed field, and a beneficent god to bring the right weather.

Nowadays, I know better. Although plants and animals may be capable of reproducing and growing naturally, the science of agriculture has allowed farmers to improve yields hugely. As an example, drawn from the FAO’s database, the following graph shows the increase in cereals production in Europe over the last 50 years. (Not shown is the fact that the area under cultivation has actually fallen over the same period.)

Cereals

This scientific approach is merely the culmination of millennia of human development, from the Neolithic period onwards. As we learn more about how other species can be manipulated, or the earth itself can be nurtured to support greater yields, it is possible to feed a growing population.

Modern farming therefore depends on the advances in techniques and materials that are available. Cereal crops are now planted by GPS-guided seed drills that allow the farmer to ensure that as little seed as possible is wasted — no longer is it scattered wantonly. Plant and animal species have been bred for improved yield over centuries. A modern farm is as far from natural growth as it is possible to be.

By comparison, many aspects of our human organisations depend heavily on trusting people to work effectively. Worse, where we aim to make improvements, there is often little science behind them to show that they will actually increase productivity. As a result, people often struggle with poorly designed systems that obstruct their efforts to work better.

I keep coming back to agriculture as a metaphor for the way we manage organisations. I think it is especially relevant for knowledge management. In order to improve the yield of the organisation (by whatever measure is appropriate), managers need to enhance people’s natural capabilities (fertilising for growth), while reducing the impact of adverse conditions (sheltering crops from bad weather). That isn’t possible without a deep understanding of the environment within which the organisation works, the natural capabilities of the people within the organisation, and the value of whatever the organisation produces.

A manager armed with that understanding (and an awareness of how the different factors change over time) can test different approaches to improving productivity, based on the factors that are known to make a difference. Managing in this way means that time isn’t wasted on things that won’t make a difference (even if the organisation next door is using them). Testing different techniques allows success to be observed — unsuccessful interventions can be stopped without significant loss.

In fact, many business interventions are more like cargo-cult science. They are often copied wholesale from other organisations (where they may or may not have been successful). They often fail because they don’t fit the way people want to work. (This is especially the case with KM systems.) But when they fail, the blame falls on the people who failed to change to fit. Too often the cry goes up, “how can we make people use the system?”

I have never heard a farmer blame the wheat for not growing properly when they try out a new cultivation technique, or the cows for a reduced milk yield when the feed mix is changed. Farmers often complain, but they know to change the right things when they can. Organisational leaders too often complain about the wrong things and therefore make the wrong changes. Poor organisational productivity is as often a product of a badly managed environment as improved agricultural yields are of painstaking land management.

KM in law firms: rising to a challenge

Mark Gould4 Comments

Spurred on by a disappointing conference experience, Greg Lambert has challenged law firm KMers to justify their existence.

He starts:

I have to tell you that coming away from the ARK conference on Knowledge Management, I was a little disappointed with the direction that many of the law firms are taking with the idea of Knowledge Management (KM). Some of the presenters were showing products that were very “flashy” and useful, but weren’t really what I would consider “KM” resources.

Many of them were “Client Services” products… or were fancy dashboards attached to accounting or time and billing resources, but not really what I would think of when it came to capturing “knowledge” at a firm.

And finishes:

The entire conference seemed to be about keeping KM relevant, by expanding the definition of KM and taking it in the direction of Law Practice Management, or Alternative Fees, Accounting and Financial Interfaces, or Client Development Resources. All noble things for a law firm to do… but again, completely outside the scope of what KM was meant to bring to the firm. As Mary Abraham put it in a tweet:

“Why is #KM obsessed with PM? Because desperate knowledge managers are searching for a raison d’être.”

As you can probably tell, I am a little depressed after hearing everyone basically say that in order to stay relevant, you need to abandon most of your objectives and principles and turn KM into something else. I’m hoping that I’m wrong.

There is a lot bundled into Greg’s succinct post, and I want to try and unpack and deal with as much of it as I can here. (I’ll probably fail, but that’s what the comments are for, no?)

The first thing to note is that Greg is absolutely right to crtiticise the use of the ‘knowledge management’ label for activities that are properly the province of other management disciplines. I have always taken the view that there is a place for KM to improve business support functions in law firms (as well as the work of the lawyers themselves). However, if firms’ BD, HR or finance functions find better ways of presenting the information that people need to operate properly, that doesn’t feel to me like a KM project — it feels like an improvement in HR or finance.

The test for ‘KM-ness’ is, I think, similar to a piece of advice for CEOs that I read in one of the HBR blogs a couple of weeks ago.

Top executives usually say they set their priorities and then figure out how to implement them. But in this process many executives make a critical mistake. I’ve noticed this when I’ve mentored new CEOs. They say, “Here are the top five priorities for the company. Who would be the best at carrying out each priority?” Then they come up with themselves as the answer in all five areas. It might be the correct answer, but it’s the wrong question.

The question is not who’s best at performing high-priority functions, but which things can you and only you as the CEO get done? If you don’t ask yourself that question, your time allocations are bound to be wrong. …

…[Y]ou really have to hold yourself back from taking on other functions or tasks even if you might excel at performing them.

The same is true for non-CEOs. So what is it that KM (and only KM) can do? That is the proper focus. So if KMers (from law firms or elsewhere) find themselves presenting at conferences, their material must, I think, be something that could not reasonably fit at a BD, HR, finance, or IT conference.

On the other hand, Greg’s perspective on KM may be a little limited. It isn’t clear from this posting exactly what his definition of proper law firm KM is, but there is a hint in the statement,

these projects were very cool, they were very useful for getting information in the hands of clients or attorneys, but to call them knowledge management resources would be stretching the truth a little bit because they didn’t really capture and reuse existing firm knowledge in the traditional meaning of knowledge management.

This isn’t the place for a debate about the definition of KM, but I think it is important to recognise that ‘capture and re-use of existing knowledge’ doesn’t do justice to the breadth of possible (and justifiable) KM activities. For me, Dave Snowden’s draft definition captures this fairly well:

The purpose of knowledge management is to provide support for improved decision making and innovation throughout the organization. This is achieved through the effective management of human intuition and experience augmented by the provision of information, processes and technology together with training and mentoring programmes.

(As an aside, the comments on Dave’s definition repay close study and reflection, as does the blog post that precedes it.)

However, Greg’s approach to KM is not an unusual one (especially in law firms), and I think there is something to explore here. The conference he attended, “Knowledge Management in the Legal Profession” is a regular event in the Ark Group calendar (as is the equivalent in the UK). Whilst there are similar events that concentrate on KM in specific sectors (notably the public sector), it appears that legal KMers (deliberately or accidentally) tend to dissociate themselves from KM developments in other types of organisation. When I have attended general KM conferences, I have often been noted as a rare legal delegate. If my impression is correct, it is a great shame — I have learned much from my colleagues in law firms, but even more from those in government, industry, commerce and banking. (Sometimes this is a process of learning by distinction — industrial KM is necessarily very different from that in professional services. It is still valuable though.) I think another consequence of a narrow focus could be that conferences on legal KM may run out of clearly KM-related topics so that they start to rely on presentations such as the ones disappointed Greg.

Interestingly, Richard Susskind has a parallel complaint to Greg’s complaint in The End of Lawyers? Susskind remarks at one point in the book (unfortunately, one of my colleagues is reading my copy, so I can’t give a proper quote or reference) that lawyers often talk about the work they do as a form of project management or similar non-legal skill. Susskind finds this odd — why do some lawyers apparently lack confidence in the value of their legal skills? Why, equally, do they think that clients might be interested in paying over the odds for a gifted amateur project manager (albeit with legal skills) rather than a professional project manager who would do a better job (and allow lawyers to focus on their own professional specialisms). Just as some practising lawyers feel they can turn their hands to many different activities, so do many legal KMers. The result is a lack of clarity about what they should actually be specialising in.

A final point. Greg refers to a specific comment that “caught my attention, and made me wonder if KM just needs to be scrapped at law firms altogether.”

When asked about “who” creates the documentation behind a firm’s model documents resource, the answer was that this would be a good opportunity for those in KM who were former practicing attorneys. (Translated: “You’ll need to have someone in KM do this, because no one else in the firm will.”)

I am not sure whether this is a reflection of the lack of value placed on KM, rather than the choices firms make. (And possibly a difference of approach on either side of the Atlantic.) In the UK, at least, law firms have long relied on model documents (otherwise known as precedents or standards). Before we had dedicated KM lawyers, those precedents were drafted by the most experienced (and expert) lawyers in the relevant field. In some teams that is still the case, but now many firms depend on their Professional Support Lawyers to create at least the first draft of the key documents. That is not because the firm values those documents less, but because they have found a more cost-effective way of producing a key resource. I am not sure that US firms have the same dependence on precedents, so they have yet to prove their worth. If that is the case, I imagine that it is probably right for the KM team to take the lead and show the practising lawyers why there is value in model documents. (There is, however, a good case for saying that everyone has a responsibility for KM, just as Larry Hawes recently argued for collaboration and Enterprise 2.0.)

Overall, then I am sympathetic to Greg’s challenge (and we should never be complacent that what we do is unassailable), but I think things may be more complex than he asserts.

Thinking about the future

Mark Gould

Blogging here has had to take a bit of a backseat while some other things take priority. Occasionally, I do manage to post some links to Twitter, or some longer quotes and notes to Posterous (and I am always adding interesting stuff to Delicious). Today, there was a bit of a theme in the things I saved to Delicious, which I wanted to capture here.

Canal boats, Pontcysyllte

First, the always insightful Jordan Furlong, writing at Slaw:

For many … firms, though, the challenges are extremely serious. The prospect that emerges from all this is a legal services marketplace in which many law firms are simply irrelevant — they’re not structured in ways that deliver maximum value to clients and they can’t compete with rivals that are. There was a lot of talk at the Georgetown event about whether “BigLaw is dead,” and I have to agree with those managing partners who dismissed the notion: these firms are obviously up and about and making a great deal of money, and it’s absurd to pretend they’re dead men walking.

The worry, for me, is that many firms, of all sizes, aren’t ready for the radical ways in which the playing field is about to change. Their focus is either straight ahead, on their clients, or internal, on their own condition and competitiveness. They’re like a quarterback whose gaze is either locked downfield on his receivers or focused dead ahead on the defenders in his path. As a result, he never sees the hit coming, from his blind side, that flattens him and turns the ball over to the other team. It’s not just lawyers and clients who matter anymore. New players, with an unprecedented combination of size and speed, are charging onto the playing field like a storm and rewriting the rules of the game as they come.

This new post reminds me of another of Jordan’s that I have linked to previously: “The Market Doesn’t Care.” As the new post makes clear, the market for legal services in the UK (and elsewhere as well) has changed irrevocably. Even without the impact on ownership structures and legal practice brought by the Legal Services Act 2007, the legal profession has not been immune from the effects of the economic crisis. More importantly, clients have not been immune, and they have also had their eyes opened to new ways of delivering legal services (Richard Susskind lists 12 of these in The End of Lawyers, so don’t assume it is all about legal process outsourcing). Likewise both sides of the relationship need to be aware of the potential for disruptive legal technologies (again, Susskind identifies ten of these). In the face of these pressures, no individual firm and no business model can take the view that it has a market-defying right to continue unchanged.

Another quote, this time (via Jack Vinson) an encapsulation of a thought of Clay Shirky’s by Kevin Kelly:

“Institutions will try to preserve the problem to which they are the solution.” — Clay Shirky

I think this observation is brilliant. It reminds me of the clarity of the Peter Principle, which says that a person in an organization will be promoted to the level of their incompetence. At which point their past achievements will prevent them from being fired, but their incompetence at this new level will prevent them from being promoted again, so they stagnate in their incompetence.

The Shirky Principle declares that complex solutions (like a company, or an industry) can become so dedicated to the problem they are the solution to, that often they inadvertently perpetuate the problem.

The Shirky Principle offers one explanation as to why law firms have managed to get as far as they have without encountering serious disruption to their basic business models. Athough some practice areas have had to fight off competition from management and HR consultancies or tax accountants, the core business has been protected by an assumption of a symbiotic relationship by lawyers and their clients. As new entrants with challenging business models have set their sights on the legal market and as businesses look much more carefully at their legal costs, this assumption can no longer hold.

So where do law firms go from here? I offer no advice — the question needs an answer rooted in each firm’s culture, traditions, client needs and market. However, a summary of the Theory of Constraints to which Jack Vinson points is instructive:

Think of your system — your organization — in terms of a chain . . .

If you care about the capacity and capability of the chain, strengthening any link other than the weakest is a waste of time and effort. Identifying and strengthening the weakest link — the system’s constraint — is the only way to strengthen the chain itself.

In a similar vein, John Tropea alerted me to a series of guest posts by Boudewijn Bertsch on the Cognitive Edge site (published two years ago, but still insightful). One of those posts draws together a thought of Russell Ackoff’s (“Improvement must be focused on what you want, not on what you don’t want.”) and the Cynefin approach to complexity.

Another sin I often see in companies, is that executives focus improvements on what they don’t want, rather than what they do want. There are two reasons why this is wrong. First, if you eliminate what you don’t want, you don’t necessarily get what you do want. Second, by focusing on what you don’t want, your solution space is much smaller compared to when you focus on what you do want.

Many companies that are engaged in formal improvement initiatives like lean six sigma or operational excellence, are focused on elimination of defects and waste. Their executives mistakenly believe that if they remove defects and waste they improve the performance of their company. Not true. A case in point is Motorola who tried to apply six sigma to improving customer satisfaction by focusing on reducing defects in the late 1980s. While they succeeded in improving their manufacturing through six sigma, a much more ordered and stable environment than the market place for products – they failed when they tried to apply six sigma to improving customer satisfaction. Their assumption was that as long as you would reduce defects (“something we don’t want”) it would improve customer satisfaction. However, no matter how hard they tried, their own customer research proved them wrong. We can explain their failure using the Cynefin framework.

At some point I want to pick up the Cynefin point (especially as I became a Cognitive Edge practitioner in February), but for now the challenge for law firms is to work out where their weaknesses are, what kind of inertia prevents them from fixing those weaknesses, and what they want instead.

That thought process alone must take account of actors as varied as employees, partners, clients, other external agents, the regulatory environment, and so on. Even without considering the variations within those groupings (which may be immense) that feels like a complex system to me.

Making time

Mark Gould1 Comment

One of the things that can prevent us from getting things done is time, and how we manage it. Even without anyone else’s help (or hindrance), the average worker has to deal with procrastination and thinker’s block.

Montepulciano

When those challenges are added to the need to work with colleagues and clients in a managed environment, things can get even more difficult. It is easy to get carried with the flow of life and work without really thinking about how best to use one’s time. Clients have demands to which lawyers are keen to respond, and most firms have financial imperatives that require particular approaches to work management. One consequence is that it can be hard to find time to do other things. In fact, in many organisations, this is intended. Tony Quinlan highlights the problem:

The drive for efficiency and perfect accounting for time is a constant anachronism — and far too much attention goes there, with added implications that activities like lunchbreaks and socialising were wasting time or somehow detrimental to the organisation. It’s often the implication that a work contract indicates a straight exchange of salary for workhours, and that any hours used at work for non-efficient work purposes is time stolen from the organisation. A very dangerous mindset to get into — and one that I’ve challenged more than a few times at conferences (typically, someone talking about email and spam and how many hours can be saved, with a spurious figure of what that means on the bottom line. Spare me.)

The contractual exchange of time for money is absolutely explicit in a law firm, where fee-earners record time in six-minute blocks, which then get converted into bills for clients. (I know many firms are moving away from the extreme version of that model, but very few of them have actually done away with the need to record time.) This can have a corrosive effect on any activities (including knowledge sharing) that are not “fee-earning” or which make it harder to reach time-related targets. Tony goes on to recall life in a more relaxed working environment.

I remember the tea trolley at Racal, back in the 1980s when I was testing radar systems.  It was actually a very useful social space — a specified point in the day when a bunch of people from different areas and specialisms met and talked as we waited to buy anything that I’d probably not allow my children to have today.

There’s a serious denigration of such social spaces these days, usually on efficiency or bottom-line grounds but (as in the case of smoking rooms) health ones too.  The value was in building cross-functional networks and communication channels and talking in non-formal environments.  And non-policed too, which made them more powerful for sharing problems or warnings of potential future issues.

Like Tony, I think the social aspect of work is crucial. If we make it harder for people to interact casually, we lose a real opportunity for creativity, change and insight. Gossip (of the non-malicious kind) almost always conveys more useful and actionable information than the formal corporate communications channels. (We need those too.)

[I]f the smoking room, the tea trolley, the staff canteen (and lunch hour) are all disappearing, where do we meet other parts of the organisation except in meetings?

A good question, Tony, and one which would frighten many people.

Do we have too many meetings? Possibly, and they may well be poorly focused as well. However, Paul Graham puts his finger on a more subtle issue. Different people are affected by meetings in different ways.

One reason programmers dislike meetings so much is that they’re on a different type of schedule from other people. Meetings cost them more.

There are two types of schedule, which I’ll call the manager’s schedule and the maker’s schedule. The manager’s schedule is for bosses. It’s embodied in the traditional appointment book, with each day cut into one hour intervals. You can block off several hours for a single task if you need to, but by default you change what you’re doing every hour.

When you use time that way, it’s merely a practical problem to meet with someone. Find an open slot in your schedule, book them, and you’re done.

Most powerful people are on the manager’s schedule. It’s the schedule of command. But there’s another way of using time that’s common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can’t write or program well in units of an hour. That’s barely enough time to get started.

When you’re operating on the maker’s schedule, meetings are a disaster. A single meeting can blow a whole afternoon, by breaking it into two pieces each too small to do anything hard in. Plus you have to remember to go to the meeting. That’s no problem for someone on the manager’s schedule. There’s always something coming on the next hour; the only question is what. But when someone on the maker’s schedule has a meeting, they have to think about it.

Where do lawyers fit into this model? Are they makers or managers? And clients — where do they fit? I don’t think there is a simple answer. However, it is a question we should always ask. Will this meeting that feels innocuous to me actually disrupt another person’s day to such an extent that they feel unable to spare the time to do something that might deliver more value instead (like chatting to someone as they make a cup of coffee)? Or, alternatively, is this meeting actually the time when something critical gets done — like finding out from a client exactly what their commercial objectives are?

Is knowledge work what we think it is?

Mark Gould7 Comments

When we talk about knowledge work, I think many of us probably focus on desk-bound paper-shufflers of some kind. Here’s a man who disagrees.

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Matthew Crawford has an academic and work history that could mark him out as an intellectual — perhaps the ultimate knowledge worker. He has a PhD in political philosophy from the University of Chicago, after which he held a postdoctoral fellowship at the University’s Committee on Social Thought. After that, he was executive director at a Washington policy organisation. Between his master’s degree and his doctorate he worked writing summaries of academic journal articles for library CD-ROMs. His current vocation, however, is to run a motorcycle repair shop. This change in direction is the subject of a book, which is touted in a New York Times article and the appearance on Stephen Colbert’s show that you can see above.

Crawford’s argument is that what we commonly think of as knowledge work is most often in fact just mindless following of process, whereas manual tasks may often pose some difficult mental challenges.

There probably aren’t many jobs that can be reduced to rule-following and still be done well. But in many jobs there is an attempt to do just this, and the perversity of it may go unnoticed by those who design the work process. Mechanics face something like this problem in the factory service manuals that we use. These manuals tell you to be systematic in eliminating variables, presenting an idealized image of diagnostic work. But they never take into account the risks of working on old machines. So you put the manual away and consider the facts before you. You do this because ultimately you are responsible to the motorcycle and its owner, not to some procedure.

Some diagnostic situations contain a lot of variables. Any given symptom may have several possible causes, and further, these causes may interact with one another and therefore be difficult to isolate. In deciding how to proceed, there often comes a point where you have to step back and get a larger gestalt. Have a cigarette and walk around the lift. The gap between theory and practice stretches out in front of you, and this is where it gets interesting. What you need now is the kind of judgment that arises only from experience; hunches rather than rules. For me, at least, there is more real thinking going on in the bike shop than there was in the think tank.

By comparison, Crawford sees remoteness and a lack of responsibility pervading much of our knowledge work.

The visceral experience of failure seems to have been edited out of the career trajectories of gifted students. It stands to reason, then, that those who end up making big decisions that affect all of us don’t seem to have much sense of their own fallibility, and of how badly things can go wrong even with the best of intentions …

There is good reason to suppose that responsibility has to be installed in the foundation of your mental equipment — at the level of perception and habit. There is an ethic of paying attention that develops in the trades through hard experience. It inflects your perception of the world and your habitual responses to it. This is due to the immediate feedback you get from material objects and to the fact that the work is typically situated in face-to-face interactions between tradesman and customer.

An economy that is more entrepreneurial, less managerial, would be less subject to the kind of distortions that occur when corporate managers’ compensation is tied to the short-term profit of distant shareholders.

I think one of our primary challenges in management (and especially knowledge management) is to instil a culture of paying attention. To some extent, much of 20th century management drove people into places where they did not need to pay attention: they were forced into silos of specialisation where they did not need to worry about what anyone else was doing. The result of this can be seen in many modern workplaces. For example, consider this description of life in a global accounting firm, from Steve Denning’s review of Alain de Botton’s book, The Pleasures and Sorrows of Work.

He zeroes in on the HR director and her activities which include promoting day care centers and animatedly asking subordinates at monthly get-togethers how they are enjoying their jobs; organizing competitions in landscape painting and karaoke to stimulate creativity; and “Employee of the Month” schemes which reward the winners with river cruises and lunches with the chairman. (p.248)

“For most of human history, the only instruments needed to induce employees to complete their duties energetically and adroitly was the whip… Once it became evident that someone who was expected to remove brain tumors, draw up binding legal documents or sell condominiums with convincing energy could not be profitably sullen or resentful, morose or angry, the mental well being of employees commenced to be an object of supreme concern.” (p.244)

Thus it would be plausible but wrong, de Botton says, to judge the HR Director as “an unnecessary sickness”. This would be “to misconstrue the sheer distinctiveness of the contemporary office” as “a factory of ideas”. The HR Director plays a key role in maintaining the mask of shallow cheerfulness that keeps the office running smoothly. It is “the very artificiality of her activities that guarantee their success”, like a party game at a house party that initially invite mockery but, as the game gets under way, participants are surprised to find that the game enables them to “channel their hostilities, identify their affections and escape the agony of insincere chatter”. (p.246)

Yet the success is relative. He notes, tellingly, how little time, amid these systematic efforts at contrived conviviality, is actually spent on real work, and how much is devoted to “daydreams and recuperation”. (p.258)

Perhaps knowledge work is actually too easy for people to engage with it properly. By documenting processes in excruciating detail, organisations have simultaneously suppressed creativity and innovation, and created the conditions for inadvertent (but inevitable) error and failure.

A glimpse into the abyss

Mark Gould3 Comments

John Flood has published on his blog an article he co-wrote for The Lawyer. It is essentially a challenge to the traditional UK law-firm business model.

The context for the challenge is clearly the current economic crisis, coupled with the opportunities offered for different organisational structures by the Legal Services Act. In essence the suggestion is that law firms should stop ‘owning’ their stock (lawyers) and instead lease it as and when client demands dictate.

Although legal work has become more commoditised and an increasing proportion of it shipped offshore, it is perhaps lawyers themselves, both associates and partners, who are the commodities, traded and marketed by recruiters and head-hunters. New service models such as Axiom Legal, Rimon Law and Lawyers Direct are flourishing. One recruiter is now even advertising ‘pay as you go lawyers’. At the same time, the equity partnership prize is becoming ever harder to win, and even less sought after by today’s younger lawyers who are more mobile and happier than ever to migrate to newer opportunities.

Since a sufficiently large pool of high-quality and experienced lawyers is emerging from the crisis, why not rent lawyers for a specific period or task and then let them go again? The advantage of temporary resources is that they can be deployed as and when needed and released when not.

What would be the purpose of the firm in this model?

A smaller, tighter front-line team would oversee client relationships, supervise the work and manage the firm. Rather than constantly seeking merger partners, law firms could structure their growth in a more organic fashion which would build collegiality as well as returns.

I am not sure what this would look like. I think there are two (potentially competing) reasons why law firms are organised as they are. The first is that the current model has served private practice lawyers well so far. That is not to say that this will remain true. John Flood and his co-author, Peter Rouse, chief executive of 7 Bedford Row Chambers, have started to make a compelling case for change from this perspective. However, the current model has also grown up in response to client needs. It is at least arguable that clients play some part in designing law firms. There is compelling evidence (see Ron Friedmann and others, passim) that client pressure will define the law firm model to a much greater extent in years to come. The Flood/Rouse model may serve clients well, but it is not clear from the article how or why clients would prefer this approach to one of the many others on offer.

As they are currently organised, law firms can and should offer clients the security that individual lawyers are well-trained and -briefed so that they can apply more than basic legal knowledge. That is one of the functions of firms’ KM activities. How would that be replicated in a firm using the Flood/Rouse model? There is a real risk that clients would get little benefit from this approach. Yes, firms might find that their costs are lower and that this might translate into lower hourly rates (assuming that the billable hour still holds sway), but a poorly-briefed contract lawyer could take much longer to perform the tasks required to the standard required by the client. As a result, the client would see no financial benefit, and might even discern a distinct difference in the quality of the work done.

That is not to say that we should dismiss this approach. No organisation can assume that it will be allowed to remain in its current form forever. Likewise, those of us who work in a particular way because of the form of the organisation we support should also be mindful that change is inevitable and be constantly seeking ways of ensuring that the service we provide is still hitting the mark for our people and our clients.

If the Flood/Rouse model were pervasive, what would law firm KM and training look like?