A lawyer in a mid-size firm recently missed an important deadline promised to a business client, leading to an unhappy client who ultimately took their business to another firm. Although no ethics complaint or malpractice claim was filed against the lawyer, the financial and reputational losses to the firm were significant.

The root cause for this mistake was the departure of a long-time paralegal just a week before the missed deadline. She was the sole person responsible for managing all deadlines at the firm and knew how to run its legacy case management program, which generated reports that lawyers and staff relied on. When she left, her knowledge went with her. 
 
This scenario highlights a common challenge faced by law firms and other businesses—the loss of knowledge when experienced employees retire or leave. They take not only their accumulated knowledge but also valuable relationships. Firms must find a way to capture and retain institutional knowledge and make critical knowledge accessible to their teams if they want to ensure business continuity, provide quality legal services, and stay competitive.

What constitutes “knowledge” in a law firm?

We often equate to knowledge information. SABIO, a consulting firm, defines knowledge as “a network consisting of facts, skills, and capabilities that an individual uses to solve a problem or complete a task.” This broad definition acknowledges the intangible, unquantifiable data that an individual possesses.

In a law firm, knowledge can be categorized as explicit and tacit. Explicit knowledge encompasses facts, technical or legal skills, office procedures, and transferable information. Tacit knowledge, on the other hand, is gained through personal experience, observation, and relationships, making it harder to articulate but still shareable.
Law firms typically prioritize preserving explicit knowledge but should consider tacit knowledge. Both types constitute “institutional” or “organizational” knowledge that requires proper management.  

Why is knowledge management important?

Effective knowledge management offers invaluable benefits. Leveraging the collective wisdom and experience of colleagues enhances productivity and efficiency. Knowledge-sharing fosters collaboration between departments, promotes transparency, and eliminates redundant efforts. Access to critical knowledge enables firms to adapt swiftly to changes and outperform competitors lacking such resources.  

Moreover, proficient knowledge management empowers firms to make crucial decisions. By capturing and sharing knowledge, firms can make informed choices rather than act out of fear. For example, a firm may retain an underperforming or disruptive employee because that person has unique knowledge or expertise. This decision delays or prevents necessary staff turnover due to the firm’s fear of losing vital knowledge when that person departs.

Firms should aspire to a state where changes like restructuring, employee departures, or leadership transitions don’t disrupt operations due to potential knowledge loss. Strategic, financial, legal, or personnel decisions should not hinge on one person’s employment. This dependency leads to information hoarding, creates silos, and hinders efficiency and team morale—conditions detrimental to a successful practice. 

How to manage knowledge 

Effective knowledge management entails creating, capturing, storing, and providing access to employees' explicit and tacit knowledge, work products, and content. It revolves around three key elements: people, culture, and systems.

Connecting People

People form the essential bedrock of knowledge that firms rely on to serve clients and operate efficiently. Therefore, it's crucial to emphasize connecting individuals with one another. Identify those with specialized knowledge, unique skills, extensive networks, or insights into systems and processes, and facilitate connections within the firm. This is especially vital for capturing tacit knowledge, as it's primarily shared through interpersonal relationships.

These connections can be established by nurturing informal meeting spaces where colleagues can collaborate, exchange ideas, and engage in joint projects or social activities. Such environments encourage the sharing of wisdom and the transfer of knowledge. Through these interactions, colleagues may discover new techniques, resources, or innovative ways to reuse and repurpose information.

Fostering an Engaged and Sharing Culture 

Merely bringing people together may not yield results unless the firm cultivates a culture of engagement and sharing. Establishing personal connections depends on a workplace that values and expects sharing, collaboration, and a sense of unity. Building this culture involves both communication and action.

Communication involves firms clearly articulating the values and expectations that promote an engaging and sharing culture among employees. When employees understand what's expected of them, they're more likely to meet those expectations. Values serve as guiding principles for their interactions with colleagues and help prioritize competing demands.

Action begins with management. Firm leaders must exemplify the behaviors and attitudes they want everyone else to adopt. Shareholders, owners, partners, and managers should participate in informal meetings, collaborate on projects, and engage in activities to share their knowledge and experience. They should also show genuine curiosity about how associates and staff acquire their skills and knowledge. These leadership actions set the cultural tone within the firm.

Establishing Systems to Document Knowledge 

No comprehensive knowledge management strategy is complete without a system for documenting knowledge, especially explicit knowledge. Law firms already utilize tools to capture knowledge, such as documents, memos, files, databases, and contact lists. While these tools are valuable, they often miss the "know-hows" and "how-tos" that aren't formally documented. As illustrated in the earlier scenario, tasks like using software programs or generating reports can become second nature after an initial learning curve, leading to overlooked documentation.

Documentation involves recording, organizing, and storing knowledge in various formats, including written documents, videos, and audio recordings. This knowledge should be kept within the firm and easily accessible to others. Office processes and procedures can be documented in manuals or checklists, while meeting minutes, collaborative platforms like Teams or Slack, emails, memorandums, and attorney work products can capture different types of knowledge. Centralizing this information with a clear structure enhances accessibility and usability.

Attorneys and staff may not automatically document their knowledge unless it's a requirement or an expectation. This emphasizes the importance of establishing a culture that encourages engagement, sharing, and documentation. For instance, when someone in the firm employs an alternative service of process or completes a complex task for the first time, ask them to create a checklist of the steps. The next person using the checklist can refine it with additional insights. Allow time for departing staff to train their replacements or create checklists for important job aspects.

Firms should also develop succession plans for lawyers or staff members considering retirement. Capturing and retaining the extensive knowledge and information held by long-term employees is essential for smooth transitions. The plan should outline how responsibilities will be delegated and to whom. The aim isn't to rely on one person as the primary knowledge holder for key firm operations, as this concentration of knowledge can pose risks. Succession planning offers an opportunity to groom high-potential employees for growth and leadership within the firm.

Conclusion

The legal profession thrives on knowledge. Lawyers dispense advice and guidance rooted in their understanding of the law, while staff manage the daily operations of the practice using their expertise in processes and procedures. The collection of this extensive and varied information is invaluable to the ongoing prosperity of any firm.