Tag Archives: Law Firm Management

SLA Program: Cost Recovery vs. Cost Prevention

I moderated a fantastic panel at the annual SLA conference last week, and wanted to share the tips that were developed during the discussion. These tips are not difficult or costly; however, the impact on the bottom-line of the firm can be huge.

To focus more on cost prevention instead of cost recovery is to shift from a reactive environment to one that is proactive. This is something that can be undertaken by every librarian, no matter their influence or clout within the firm. Additionally, if the impact of these changes is being measured, the potential to raise the profile of the library is tremendous.

Our 5 easy tips:

  1. Get to know Accounting. If the librarian does not have full access to any and all of the data that impacts the library, how can informed decisions be made? The librarian cannot take ‘no’ for an answer when it comes to developing this relationship, and accessing this data.
  2. Manage and control the conversation around the firm’s contracts with large vendors. Another benefit to a relationship with Accounting, is finding out how much the firm spends with some of the large vendors. Imagine the bulk discounting that might be possible if the librarian could leverage the entire spend, and not just that of the library. Talk about a direct savings to the bottom-line!
  3. Education/Training. Controlling the training and education of your users is a great way to prevent unnecessary costs. Vendor representatives only train on their own products, and promote new content and services. This probably isn’t the most cost effective use of all the research resources purchased by your firm. It is imperative that training sessions be vetted by the library or conducted by a librarian, if possible.
  4. Using knowledge management (KM) to leverage internal and external resources. This doesn’t mean you have to implement some complicated KM software, it just means that you need to look for efficiencies in everything that you do. For example, the library could create an internal wiki to share answers to regularly asked questions, contacts, and/or frequently accessed internal content. This is KM, and once a small step is taken, more will follow.
  5. Creating innovative and simplified contracts. Vendors have been using the same contracts since they started offering their online services. Has anything else in your library stayed the same over all these years? How about exploring contract structures that reflect how you use the product, instead of accepting the same old, one-size-fits-all contract. Work closely with your vendor before you are even presented with a contract to let them know that the status quo isn’t going to work for you anymore.


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A Sign of Things to Come?

Integreon announced its 2010 fiscal year results today, and its nothing short of amazing. In this economy, the company managed to post a 52% increase in revenue growth.

If anyone thinks that outsourcing in law firms is just a “fad”…I say think again. This company obviously has a value proposition that appeals to law firm business leaders.

Integreon Achieves Record Growth in 2010

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Why KM (or Library) Initiatives Fail

I came across a fantastic post about why KM initiatives fail. I believe that this list is totally applicable to library initiatives, and these points should be considered before embarking on any new projects. In fact, I believe that if you just substitute the word “library” or “information initiative”, it makes perfect sense (all emphasis is mine).

1) KM is not introduced as a change program.

KM is a program of organisational change. It’s not about buying and rolling out technology, it’s not about giving people new toys, and it’s not about adding another task into the project framework – it’s about changing the way people think. It’s about changing personal and organisational priorities, and it’s about changing the way people think about knowledge.

2) The KM team are the wrong people to deliver change.

If KM is a program of organisational change, then the KM team need to be change agents and change leaders. The team leader, first and foremost, needs to be a change agent, a visionary leader, capable of working at the highest levels in the organisation as well as the lowest. They need to be an insider; this is a role that cannot be outsourced, as they need to “speak the language”, know the politics, and have the credibility. They need to know enough about KM to translate it into business and customer terminology, but able to back it up with sound KM theory. They need to be comfortable in the board room as well as on the factory floor, and in both locations they need to inspire, and they need a team that can inspire as well.

All too often, the KM teams we come across in organisations are not like this at all. They are the wrong people. They are back-room boys and girls, more at home managing databases than inspiring change. They prefer working with computers to working with people. They do not inspire, and they are not visionary. They are uncomfortable in the board room.

Finding the right people is not easy, but changing the culture of an organisation is not easy either. With the wrong people on the team, you don’t get the right result, even with the best consultants in the world to support you.

3) The KM team preach only to the choir.

The KM team are enthusiasts. They see the value in KM, they “catch the vision”, and they assume everyone else will catch the vision. As they go out into the organisation they begin to meet other enthusiasts, they will get a lot of Buzz, they will find some exciting projects, but unless they move beyond the enthusiasts they are just preaching to the choir. The KM fans will create a KM bubble, but if you don’t move beyond the enthusiasts, you won’t penetrate the rest of the organisation. Experience shows that maybe 20% of people are enthusiasts, maybe 60% don’t care about KM one way or another (they will do it if their job requires it, but it’s not a big deal either way), and 20% hate the idea, and find it threatening. Very soon you have to leave the 20% of enthusiasts (even though it’s much more fun to work with them), and start the hard work of working with the other 80%; the tough nuts, the cynics and the don’t-cares.

And that’s where your change-agency skills will come in. Without them, and without preaching beyond the choir, you won’t get anywhere near your tipping point. You will get stuck with a happy choir, and a totally disinterested congregation.

4) Only parts of the KM solution are implemented

There are many elements to KM. There is connect, and collect. There is push, and pull. There is people (roles and accountabilities), processes, technologies and governance.

All too often, KM implementations take only one element, and assume that will work in isolation. A common assumption is that knowledge has to be captured and published, so people go down a route of collect and no connect, push and no pull, and a focus on technology without process, accountability and governance. Another common assumption is that all you have to do is “let people talk” and knowledge will share itself. So people go down a route of connect, people, and technology, And of course knowledge doesn’t “share itself”.

Taking a small element of KM and assuming it will work in isolation is like taking one ingredient and assuming it will create the whole recipe, or like taking one small element of a central heating system and assuming it will heat the house.

One common reason why we get invited into organisations is because they have part-implemented KM, and it got them nowhere. “We had a KM program last year, we bought a new search engine, but people aren’t using it”. “We introduced SharePoint and set up 40 communities of practice, but they are all inactive”. “We put in place a lessons learned process, but we are just learning the same lessons over and over”. They introduced a tool or a process or a technology, when what they needed was a system.

5) KM is never embedded into the business

Lots of KM programs do not take root, because they have never been embedded in normal business. They are delivered by a strong team and a charismatic leader delivered as something separate – not fully rooted in the work structure and management framework of the company. They are like a tree in a pot – well tended, well watered, but separate – and when the tender care is removed, the organisation tips back. KM needs to be like a tree in a forest – rooted in the fabric of the business.

The goal is to embed a self-sustaining approach to KM in all elements of the business, with clear governance and good support, and clear evidence of sustainable culture change and sustainable business value. Don’t stop your implementation until you have got to this point. And even then, plan for a handover period, until embedded operational KM is up and running. Stopping a KM program before this point is a common reason for failure. And given that it may take years to reach this point, you need to ensure that your high level sponsor (see point 6) is “in it for the long run”.

6)  There is no effective high-level sponsorship

In order to embed KM in the business, then changes to the business need to be made. You may have to change the incentives policy, perhaps removing the “factory of the year” award that drives so much internal competition. You may need to change the accountabilities of the Heads of Function, to include accountability for the maintenance of certain knowledge areas (that accountability usually being devolved to subject matter experts and communities of practice). You may have to introduce high level groups of responding to the output of knowledge capture sessions, whenever these uncover organisational weaknesses that need to be addressed, or organisation improvements that can be made. You may need to introduce a new technology across the entire organisation. For all of these, you need support at the highest level, so you need a sponsor with the ear of the CEO.

In addition, you need the heads of function onside, so you also need a high level steering team, including the CIO, the head of HR, the head of projects, the head of operations etc. These guys need to steer the KM project, and in return for that ability to steer, need to support the result.

Now not every KM implementation starts at a high enough level to have a C-grade sponsor. Sometimes KM starts in one division, or one country, or one function; however for KM to be applied across the whole company, or for the company-wide blockers to be removed, then the scale of KM implementation needs to be escalated, To do this, you will need to use the results of your divisional or national or functional KM program to make a case to senior management. You need to be able to say to them “Here is what KM can deliver. we have proved this at national, divisional or functional level. We can make these same improvements, and deliver the same scale of improvements across the entire business. However we need active sponsorship from you”. You make a deal with senior management. In return for their support, you promise real business benefits (see point 7). Of course you have to deliver against these promises, but without senior support, there is no way you can deliver.

7) KM is not introduced with a business focus.

I see this one all the time, and it’s a crucial point. KM should not be introduced for its own sake; it should be introduced because it solves business problems. The primary value of knowledge is helping people make better decisions, and so perform work better, faster and/or cheaper. You won’t sell KM to anyone, let alone the doubters, the cynics or the high-level sponsors, by assuming that KM has self-evident benefit. You won’t get anywhere by saying “we need to improve knowledge sharing”, unless you can clearly demonstrate how better knowledge sharing will help the business. If you want support of a high level sponsor, you need to show how KM will help solve the issues that worry that sponsor. And if you aren’t clear yourself, then sometimes the sponsor can help you clarify.

One of our clients took a KM strategy to the executive team of their organisation, It was a good strategy, but a little short on focus. Luckily rather than kicking it out, they said “yes, you can go ahead with KM, so long as you focus it entirely on the growth agenda. If it can help us grow, then go ahead”. That’s what they did, and now, many years later, then have a wealth of stories showing massive growth and many hundreds of millions of dollars value created, through the help of KM. It worked for them, and it would work even better for you if you think through the business priorities and the business benefit right at the start, before you even go to the sponsors in the first place. You need to know how KM will support the business strategy, you need to know where the value will come from, and you need to know, in general terms, the size of the prize.

What I really appreciate about this post, are the solutions listed. Mr. Milton doesn’t just talk about failure, he also offers up the secrets to success.

  • Plan KM implementation as an organisational change program
  • Recruit an excellent in-house change agent to run the program, supported by a powerful team
  • Map out your stakeholders and your audience segments, and ensure you address all of them
  • Implement KM as a holistic system, containing all necessary elements
  • Don’t stop KM implementation until KM is fully embedded into company processes, accountabilities and governance.
  • Make sure you have sponsorship at a high enough level that you can make and embed the required organisational change, and that you have a steering committee to ensure support for this
  • Make sure your KM implementation is focused on solving real, pressing business issues.



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Benchmarking Legal Research Resources—Fact or Fiction?

From guest blogger: Sarah Clark Kavanagh

We are being asked a lot about our “Benchmarking Experience” as though it is the only ingredient in a Library Service cost reduction program.  This is scary because knowing how much something should cost is important, but it is not the only guideline in negotiating/’rightsizing’ library contracts.

You know, it’s really easy for anyone off the street to gather some data, divide it by the number of units and come up with an average.  The real work comes and is helpful when the VALUE of something is determined.

Last year we gave presentations revealing the pitfalls of negotiating information contracts, and now it’s time to reveal a few of the ploys used by the Cost Management companies who are contacting your firm to reduce library costs:

  • Library cost benchmarking is nonsense.
    • What the firm down the street spends is irrelevant to your firm and the needs of your attorneys.
    • Cost per unit and its value to your firm is what matters.
  • Sometimes your online contract or book agreements shouldn’t just be reduced – they may need to be completely restructured!
    • We see some firms pay MORE after some consultants leave simply due to the lack of a true NEEDS assessment of the practice that results in a contract structure that increases costs!
  • A law firm’s information needs change over time.
    • Has anyone talked to you about your legal research strategy and the resources you should have to support that strategy now?  Next year?
  • Did you know you can reform online contracts, save money and actually have your attorneys think they have more to work with?
  • Finally, it’s complicated, and the vendors certainly aren’t going to simplify it for you.
    • Your consultants should be assessing the individual needs of your firm, determining value and simplifying your contracts IN ADDITION TO reducing costs.  Period.

We not only help firms save money…we help them determine what they need and how much to pay for it. That’s the real bottom line.

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Cost Recovery: Ebb and Flow

It seems to me that legal research cost recovery has a natural ebb and flow; sometimes it’s the hot topic and sometimes it isn’t.

Economy bad = Recover more costs!

Economy good = Cost recovery…Eh…

I wonder if this time is different? Has the economy driven a change that has established a permanent foothold and redrawn the landscape of cost recovery, or, like many other “changes,” will we just go back to the status quo? I have to admit that I’m not entirely sure. On the one hand, this seems to be one area where many clients, especially corporate ones, have drawn a line in the sand, and refused to pay. On the other hand, it seems like we’ve been here before, and not much changed the last time we had this discussion.

What ever happens, Lexis is one company that is betting on both sides of this coin (pun intended). Yesterday I read that LexisNexis announced a strategic partnership with eBillingHub, a product that helps simplify e-billing and increase collections (Thomson Reuters also partners with eBillingHub through its Elite product). Believe it or not, LexisNexis also sells CounselLink, a product designed to “identify greater savings through superior invoice technology.”

In other words, they sell a product to law firms to help with e-billing and recovery of costs, and they also sell a product to corporate law offices designed to remove those costs. It might be interesting to know how many law firms submit bills through a LexisNexis product, with LexisNexis charges, that get denied by another LexisNexis product.

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New Ways to Save Money

Using the internet to save money in our personal lives is nothing new, but it hasn’t extended very far into law firms. Three new services that were recently featured in a Law Technology News are aiming to change that.

  1. GroupESQ: Group buying power for attorneys.
  2. ServeCentral: Web-based solution for managing service of process.
  3. LiteraLive: Document life cycle management in a cloud based environment.

Another example is kiiac, a service that  creates and maintains document templates and clause libraries.

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Tell Me Something I Don’t Know

A new study on the evolution of the practice of law was released at the recent ABA Techshow. The study was conducted by Ari Kaplan, who interviewed 30 individuals to gain perspective from across the legal industry.

Some highlights from his interviews:

“The days of clients accepting the traditional model of billable hours and costs over which they have nocontrol is over.” —Jay Shepherd, Shepherd Law Group

“Lawyers need to stop thinking about what they do as separate from what their clients do.” —Patrick Lamb,Valorem Law Group

“The model and structure that law firms have been working on for 20-30 years was always a bad business model; however, it survived until now because there was so much commerce going on.”—Lynn Mestel, Mestel & Co.

An overview of his findings:

  • 13 of the 15 active practitioners interviewed use alternative billing, including fixed fee arrangements. Over 75% had heard of instances where a corporate client will not pay for first year work done on their cases.
  • 92% feel that client expectations have changed.
  • 62% agreed that the accelerated growth in law firms and the rise in legal fees led in whole or in part to the current state of the market.
  • 70% agreed that while the economy has always had an impact on the practice of law, the current shift is different.
  • 74% believe the shift will be permanent.

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