The Emergence Of Knowledge Analysis: Change And Knowledge Management In Large Law Firms: Free Download

By Ronald W. Staudt, Professor of Law and Associate Vice President for Law, Business and Technology at Chicago-Kent College of Law

Meet knowledge management's new internal customers: Finders, Minders and Grinders.

Knowledge management ("KM") teams in large law firms have new internal customers: the managers of the firms, the finders who are generating new business, the marketing chairs who are positioning the firms and the finance directors who are struggling to price the professional services of the firms as they face increasing demand for creative alternative fee arrangements. These new customers of KM need more than reliable information and knowledge; they need analysis of information and knowledge to be able to do their jobs. KM is beginning to broaden its vision and expand its arsenal to meet these new challenges. 

Change 

Change is the most frequently used word to describe the legal profession today. While many of us thought that technology would be the driver of deep change in the practice of law, it turns out that the new economics of large firm law practice is the real change agent.1 The deep recession of 2007 is driving top law firms and their clients to rethink many of the assumptions underlying their business relationships with clients. The institutional practices of many of the largest law firms have been buffeted by reduced legal spending. Significant reduction in business activity has reduced the need for legal services.There are fewer deals, fewer mergers, fewer company launches, and as a result there are lower revenues to law firms that serve companies. Businesses are also cutting costs in all areas including legal spend. This reduction in legal spend and business activity has produced layoffs of existing lawyers and deferred hiring of new lawyers by the largest law firms.The economic downturn has energized the ACC Value Challenge, a continuation of more than a decade of emphasis by in-house counsel on alternatives to hourly billing business models for the purchase of legal services.2 Alternative fee arrangements, AFAs, are on the lips of everyone who manages large firms. The economic downturn has triggered a sea of change in the direction of billing arrangements in large firms. More and more clients are exploring fixed fee arrangements. Law firms are offering more creative approaches as alternatives to the cost plus professional services deals of the past that relied exclusively on billing for lawyer hours expended.3

KM's Lawyer Customers: Finders, Minders and Grinders 

The new business reality creates a demand for a new type of KM for large law firms. The new economics will change the way lawyers do their jobs at all stages of their careers, from entry-level associates to managing partners. It will no longer be sufficient for KM teams to deliver model documents and enhanced work product from law firm files. Lawyers, at all stages of their careers, will need more advanced tools-KM that offers a preliminary analysis of documents, financial information and staffing histories.Lawyers, as well as architects and other consultants, can be described as finders, minders or grinders. These three overlapping categories define the stages of professional development and the major impact of the work that professionals do on a daily basis.4Finders are attorneys who bring in new clients. Minders manage the matters that the firm handles for clients and maintain relationships with current clients. Grinders do research, draft contracts, handle the depositions, review discovery documents and argue motions in court. 

• 1. See, e.g. Ronald Staudt, All The Wild Possibilities: Technology That Attacks Barriers To Access To Justice, 42 Loyola L.A. L. Rev 1117 (2009); Richard E. Susskind, The End Of Lawyers?: Rethinking The Nature Of Legal Services (2008). At 270: "To Cap It All, A Number Of Disruptive Legal Technologies Are Emerging . . . Which Will Directly Challenge And Sometimes Even Replace The Traditional Work Of Lawyers. For Many Lawyers, Therefore, It Looks As If The Party May Soon Be Over." Darryl Mountain, Could New Technologies Cause Great Law Firms To Fail? 52 Syracuse L. Rev. 1065 (2002); Darryl R. Mountain, Disrupting Conventional Law Firm Business Models Using Document Assembly, 15 Int'l J. L. & Info. Tech. 170 (2007); Marc Lauritsen, Fall In Line With Document Assembly: Applications To Change The Way You Practice, L. Off. Computing, Feb.-Mar. 2006,
• 2. At 71.2. Association of Corporate Counsel: "The Legal Industry Is Changing: The ACC Value Challenge offers proven tools and tips to help you save time and money while increasing your value to senior management." http://www.acc.com/valuechallenge/index.cfm last viewed, Dec. 14, 2010.
• 3. 3. AFAs are a new development only in the large law firms that serve large corporate institutions. Small firms and solo practitioners have been using alternative fee arrangements since time immemorial. Personal injury plaintiff's work has been a contingent fee business forever and personal injury defense work for insurance companies is often a fixed fee engagement with triggers to move to higher per case fees as matters move through stages of litigation. As a result, there have long been incentives in these practices to be efficient with lawyer hours and to use technology and staff leverage to reduce the cost of delivering fixed fee services. Fixed fee engagements for personal legal services have long been common. Divorces and small business incorporations are advertised every day at fixed fees. The law firms and sole practitioners with family law practices and bankruptcy practices and estate planning practices face increasing competition from well-financed and highly automated legal information and form businesses like Legal Zoom. Codification KM that automates repetitive tasks and ensures high quality services in matters that can be well served by document assembly and Web enabled reengineering is an emerging requirement for these small firms if they are to survive.

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