P R O B A T E   &   P R O P E R T Y
January/February 2003
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Technology Property

Technology—Property provides information on current technology and microcomputer software of interest in the real property area. The editors of Probate & Property welcome information and suggestions from readers.

Knowledge Management

The last column discussed the importance of technology to preserve knowledge in a disaster. It is also important to manage intellectual resources in a proactive way. “Knowledge management” can be crucial to the successful performance and delivery of legal services.

Knowledge management can be defined in a wide variety of ways. In my view the most critical elements of knowledge management are the systematic sharing and preservation of the intellectual capital of an organization. Knowledge can be shared in numerous ways, and this column will focus on the use of a web-based document database as well as some of the basic concepts of knowledge management. Future columns will discuss knowledge sharing through web-based collaboration systems, software that helps spread the knowledge of experts throughout an organization, and document automation templates that can incorporate the organization’s knowledge into its activities.

Why is knowledge management important to the practice of law? If used properly it is a tool that can materially enhance the quality of legal services as well as the productivity of those delivering those services. If you sit on the sidelines while other firms or law departments incorporate knowledge management into their practices, within a couple of years you may very well find that you are no longer competitive with those who can deliver greater value at a lower cost to their and your clients.

Although technology in the guise of electronic computing devices is not theoretically a required element of knowledge management, computers enable the implementation of knowledge management tools in a useful and cost-effective manner.

Knowledge Sharing

That knowledge sharing enhances the quality of a law firm’s work product should be indisputable. Any increase in the relevant knowledge brought to bear in delivering a legal service can affect quality only in a positive manner. As an example, let’s consider a law firm representing the developer of a regional mall. The firm has a strong real estate practice with a number of partners and numerous associates and paralegals in the real estate practice area. The partner in charge of the matter assembles an appropriate team of associates and paralegals. None of the members of the team, including the partner, possess the full collective knowledge of the firm. Each lawyer and paralegal at the firm has developed her or his own knowledge from other matters they have worked on at the firm or with a prior organization, from educational experiences in law school, continuing education programs, and readings, and from discussions with their colleagues at the firm and at bar associations and other groups to which they belong.

In a major transaction, such as the development of a regional mall, many firm lawyers not on the deal team are likely to have dealt with a similar transaction, while others who are on the team may be completely unfamiliar with it. Because a very broad range of issues may be encountered, even a partner can learn from other partners or associates in the firm. In prior transactions, complex and extended negotiations may have been held with zoning authorities, building departments, contractors, surveyors, architects, lenders, title insurers, or with particular lawyers or firms representing other parties to the project. If the critical knowledge gained by the experience of other lawyers in the firm is immediately available to team members at their desktops, the likelihood of avoiding complex and lengthy negotiations and drafting and of duplicating an already proven successful transaction is increased and the quality of the work product enhanced. It is true that every real estate deal has many unique circumstances, but many common elements frequently recur.

Implementation

Without the systematic deployment of knowledge management tools, knowledge sharing will take place as it usually does. Of course, members of the firm talk to each other and seek out others for advice, but this can often be on a haphazard basis. First, one might not know who best to contact for a specific bit of knowledge. Second, the appropriate person might be on vacation, ill, on a conference call, in the middle of a closing, or otherwise not readily available, or might not remember some of the significant relevant details. Third, strained relationships or ego may limit certain inquiries to others in the organization.

Is it really possible to make the collective knowledge of the firm available at the desktops of all firm lawyers and paralegals? Technically, it might be possible, but it is probably impractical to capture all knowledge. Nevertheless, enough of the important knowledge can be captured to make the endeavor worthwhile. Knowledge that has been reduced to writing is relatively easy to capture by placing all relevant writing in a full-text, searchable database that is indexed to make retrieval easy. It is not a simple task because the relevant and value-adding documents must be identified from among a large quantity of documents. An investment in time must be made by the firm’s lawyers to capture these documents, and the firm must be careful to craft a process that captures only those that will add value. In a large organization, each practice area can be so different that each needs to fashion its own criteria for identifying the documents that will add value to the knowledge base. If those contributing the documents are indiscriminate and toss in every document without being thoughtful, finding the documents of value will be more difficult.

Getting lawyers to dig into their paper or electronic files is not a simple task for a variety of reasons. There is the ever-present press of client work. Within the highly competitive environment that exists in many firms and law departments, lawyers may feel they have a competitive advantage in withholding significant precedents for themselves. To overcome this, the organization’s top management must support the endeavor directly and make it clear to all lawyers in the organization that the degree to which they participate in knowledge sharing will play a role in partnership, leadership, and compensation opportunities. Management’s actions must support its stated policy for the policy to have an effect. Certainly the great incentive to promoting knowledge sharing is that it will give the firm a competitive edge. As a client, which firm would you want to represent you? The one where knowledge sharing is practiced or the one where lawyers keep their knowledge to themselves so that client will not receive the benefit of all of the firm’s knowledge?

Confidentiality

Although knowledge sharing is important, the instances when sharing is not appropriate must also be recognized. Privileged or confidential information needs to be protected. Any good knowledge sharing system must permit limiting access to certain documents to certain individuals or groups. Even so, such protection should not be an excuse to withhold contributions from the knowledge base when there is no real necessity to keep the information confidential. Redaction is usually available to make important documents available to others while not disclosing confidential information. The organization must clearly establish a sound policy on what constitutes confidential information that is not to be shared with all lawyers in the firm.

Annotations

Documents by themselves are often not adequate sources of knowledge. Annotations are very important so readers will understand why documents were drafted in a particular way. The firm certainly doesn’t want to develop a practice in which some critical points are given up by less experienced lawyers solely because the same points were given up during negotiations in a prior deal (1) because of a weak negotiating position or
(2) in exchange for an important advantage elsewhere in the deal. When a transaction is completed, the post-closing process should include a determination of what documents to include in the database that will be helpful to others who negotiate or draft future transactions. Any such material added to the knowledge base should be annotated to the extent necessary to enable others in the organization to fully understand the context and thinking behind its use and to easily locate material of value in the document.

Of course, many events occur during a transaction that are not reduced to writing. Great results might have been accomplished during the closing process that would be very helpful to others in the organization who will find themselves in similar situations in the future. It might have taken you twenty hours to achieve that great result. Because of your increased knowledge, you now know you can achieve it in two hours the next time you are confronted with the same issue. You should also make that knowledge available to others in your organization by adding a note or memo to the knowledge base so they can achieve the same savings. You may also have experienced a bad result that you now know how to avoid in the future. You should help others in the organization avoid the same result by adding a note to the knowledge base.

After reading this column, some might say that because time is such a premium, they don’t have the luxury to waste it identifying the valuable knowledge gained during the transaction. It is true that you will have to invest time in this process, but the payback will be tremendous in the time saved by you and others in your organization on future transactions and in the added value that can be provided clients.

Retrieval

Of equal importance to the contribution of documents to the knowledge base is the ability of all lawyers and paralegals to readily retrieve what they are looking for without having to browse through a good deal of irrelevant material. A number of elements are required in a well-designed, web-based system to achieve this result. They include:

1. A database that is well constructed and permits full-text search capability of all documents it contains.

2. A well-established list of subject matter categories (sometimes referred to as a taxonomy) that can be assigned to any material as it is being added to the database. The database should permit a document to be assigned multiple categories without limit. Different people think in different ways, and the same person thinks differently at different times and under different circumstances. Categories should be assigned in a manner that will reflect the variety of ways lawyers and paralegals search for documents in each type of legal subject matter.

3. A great search engine to do full-text searching with simple or complex queries.

4. A very user friendly Intranet web site that (a) will facilitate finding documents by full-text search or selecting documents by category and (b) will present the results in a manner that is easy to view and easy to sort by date, contributing person, contributing practice area, and other identified relevant
criteria.

5. Procedures have to be established for the appropriate way to categorize documents being added to the knowledge base, and people have to be trained in the categorization process.

6. A process must be established to update, remove, or annotate material that is no longer representative of good practices that the organization’s lawyers should rely on.

Solos and Small Firms

What about solo practitioners or small firms that do not have the benefit of a large number of lawyers among whom knowledge can be shared? First of all, no matter how small the firm, it is beneficial to maintain documents in an organized way to allow instant retrieval. This issue for small firms, however, highlights the most significant part of a knowledge management system for a legal organization—the lawyer.

It is obviously difficult to successfully share knowledge if you do not have other lawyers to participate with you. This is how an organization of lawyers, such as a bar association, can play an important role. Why not give solo practitioners and lawyers in small firms the opportunity to share knowledge as part of a large group and provide the technology to make it attractive for the lawyers to participate? Because information can be made available on a web site accessed through a web browser, there should be no need to require the lawyers to buy or install any application software. This can be a way for a bar association to attract and retain members. The American Bar Association already provides many means of sharing knowledge through numerous CLE programs, magazines, books, other publications, listservs, web sites, and committee activities. Providing a knowledge management system that enables solo practitioners and small firm lawyers to have immediate desktop access to the knowledge and experience of other members would provide much of the same knowledge already provided to members, but in a more organized and systematic way. This has the potential to provide a wealth of useful material to members and enable them to provide greater value to their clients.

Lawyers might be reluctant to contribute their work product if it might expose them to liability, and the bar association will not want to take on liability for providing the means to share documents. The ground rules will probably have to include an understanding that the lawyers make no warranty with respect to documents they contribute, except perhaps that they have the right to contribute them.

If you want to stay at the top of your game, knowledge sharing is a discipline that you must learn and employ as a regular part of your practice.


Technology—Property Editor: Gerald J. Hoenig, 2400 Lakeview Parkway, Suite 400, Alpharetta, GA 30004

 

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