Friday, 10 July 2015

Should KM change the culture, or work with the culture?

If the culture of your organisation makes Knowledge Management difficult, what do you do? Seek to change the culture?  Or work your way around the different cultural elements?

I was reading a book about legal KM at the weekend, and the author (quite rightly) identified the hourly billing culture of many law firms as being inimical to Knowledge Management, largely because it drives individualism through setting personal targets. The author frequently asserted that "Knowledge Management needs a collaborative culture to be successful" and therefore that the billing model should change.

There is a risk here.

The risk is that we may see culture change as a way to support Knowledge Management, rather than a way to support the business.  This is the wrong way round. KM must put the business first, and changing an entrenched culture to support KM may be the wrong thing to do; at least in the short term.

Let's look at the legal "hourly rate" model. This has evolved over time and is still the prevalent billing model in the legal market (although this may be changing). It is reasonably logical, it can be reasonably transparent, and it allows legal firms to derive revenue in conditions of great uncertainty, such as litigation. Sure it incentivises the individual, but it ensures the revenue for the firm while reducing risk.  Anything that challenges the hourly billing model will probably not survive very long in many law firms.

Let's assume this model will be here to stay for a while yet. The question then becomes, not how KM can change the billing culture in order to make KM easier, but how KM can work within the billing culture for the benefit of the firm?

Traditionally, legal KM has done just this. By using non-fee-earning lawyers to act as a supply chain of legal knowledge for the front-line fee earners, thus freeing up fee-earning time for the top lawyers. However there may be other ways to work within the model, for example by reducing the time spent on non-fee-earning activities.

Take Business Development, for example. This non-billable activity is crucial to the future of the firm, and requires lawyers to do non-legal activities, such as client development, pitching and billing. When Ernst and Young (who also billed by the hour) were investigating KM in the 90s, they focused their pilot efforts on the time it took to create and close a bid, and through reusing knowledge were able to cut this time by a huge percentage.  Other law firms could use KM to learn about customers, clients, business segments and key individuals as a way to increase business development success rates.

Take Marketing, as another example. In a recent Georgetown Journal of Legal Ethics article, “I Didn't Go to Law School to Become a Sales Person—the Development of Marketing in Law Firms,” consultant Sylvia Hodges writes, “Traditionally, lawyers believed that their knowledge and expertise spoke for itself, and it would be a sign of defeat to start marketing.” (source). That attitude is changing, and law firms need to develop their knowledge of effective marketing (an area which KM already addresses in many consumer goods companies).

These are just two examples where Knowledge Management can show its worth in the legal sector, above and beyond the traditional model of PSLs creating precedent libraries, without attacking the hourly billing model.

If you, too, face an entrenched culture which is unfriendly to Knowledge Management, perhaps you should think not how to change the culture, but how to work within it for long enough that you can prove the value of KM, and show the way to a culture which supports the business better.

1 comment:

Gordon Lind said...

One of the interesting things about consulting in knowledge management is that it can quickly become clear that what is billed as a problem solving device or the introduction of new infrastructure is actually (at least in the minds of one or more of the Board/steering group) a culture changing device.
It becomes very important to spot this early enough to manage expectations and sensitivities (it can create a temporary hurdle in relationships with the client to be too wise about this too early for example!)

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