LEGAL ASSET MANAGEMENT,
AKA KNOWLEDGE MANAGEMENT
Law firms are businesses, and the value of lawyers’ work product is
knowledge, so it stands to reason that effective management of the attorneys’
knowledge is imperative to achieving the firm’s business goals. A knowledge
management (KM) strategy is an effective vehicle for that task. After decades
of false starts, law firms and corporate legal departments are making strides
in the implementation and adoption of knowledge management programs.
Propelled by shifts in the economy, legal teams have been exploring ways
to maintain profit levels despite a downward pressure in fee structures and
a slowdown in hiring. To accomplish this, law firms are appointing teams to
identify technology and develop processes for legal asset management.
Because knowledge management program development can be an
enormous undertaking, many legal teams deferred it until they were able
to identify a clear return on investment. Recently, multiple factors have
influenced the decision to move forward.
During the Great Recession of 2008, budget tightening
in corporate legal departments induced cost reduction
strategies in firms.
Staffing levels in law firms dropped noticeably: the amount
of work diminished, General Counsel demanded alternative
fee arrangements, and firms needed to adjust. An online
layoff tracker found that for every associate laid off
between 2008 and 2010, the same firms lost three support
staff1. Smaller support staffs and fewer associates per
partner meant that attorneys had to generate the same
amount of revenue with fewer people. To accomplish this,
firms required tools to increase efficiency, reduce costs,
help them develop new business and adjust to changing
fee arrangements. Though knowledge management
might have appeared to be the perfect place to cut, in fact,
it was an initiative that would help firms attain their goals.