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Are your law firms introverts or extroverts? We’re not talking about personality type, but their approach to knowledge. Boston’s Goodwin, Procter & Hoar for example, is an introvert. New York’s Weil, Gotshal & Manges is an extrovert. Knowledge management is a fancy term for the process of moving the musty contents of file drawers and lawyers’ hard drives into searchable, computer-based repositories so that work product can be reused. And firms are split over how to go about it. The extroverts, like Weil Gotshal, want to share their knowledge with the client, even if they haven’t categorized and catalogued every last document. The introverts, like Goodwin Procter, are first building up their libraries with internal documents. They’ll push information to their clients after their own houses are in order. “It’s an interesting divide among the firms,” says Kingsley Martin, the chief information officer at Chicago’s Kirkland & Ellis. Martin is one of the KM movement’s leading lights. And he’s a proponent of the Goodwin Procter philosophy. But even he concedes that “both strategies can be very useful.” A well-oiled knowledge management system can be a powerful tool. It saves time and money by giving lawyers access to recycled briefs, memos, and templates for simple leases and agreements. But that’s not all. Vetted e-mails, notes about expert witnesses, and client contact information are also folded into a thorough KM system. So is information on the firm’s lawyers. After all, it’s good to know how to find the resident expert in, say, private placement memoranda for real estate investment trusts or Hart-Scott-Rodino notification requirements. Weil Gotshal has created secure Web sites, or extranets, with a handful of its larger clients, including Pfizer Inc. The sites act as repositories for documents relating to ongoing cases and deals. The firm also tracks current patent litigation with clients Cisco Systems Inc., and Oracle Corporation through the Web. Periodically the firm’s attorneys and information systems staff cull the best examples of, say, documents supporting cross-border financings, and load them into a larger “best practices” database, organized by practice group for internal use. The firm has been doing this for several years and has, to date, assembled a half-dozen or so repositories. Since the documents are easily pulled from the client Web sites, sorting through them doesn’t require a ton of manpower or money. Interacting with client extranets yields another benefit. Firm lawyers get used to trafficking documents online. “We’ve learned that if you focus on a client’s problem, you end up developing systems that lawyers use,” says Matthew Powers, the managing partner of Weil Gotshal’s Menlo Park, Calif., office. It might take firms like Weil Gotshal and Milwaukee’s Foley & Lardner, a fellow extrovert, a long time to compile comprehensive repositories of knowledge. But they don’t seem to care. “Frankly, we’re not really focusing on a firmwide system,” concedes Todd Mattson, Weil Gotshal’s director of information systems. “Instead, we’re focusing on projects for specific clients and hoping they can help specific practice groups down the line.” Weil Gotshal has also set up an “e-commerce” expert system for its clients. It’s a Web site that answers in-house attorneys’ questions about e-commerce developments by walking them through a series of automated questions. Say a retailer is thinking about launching an online contest. In a few minutes, the site can spit back documents that help determine whether the contest constitutes an illegal online lottery in the U.S., and which groups of people are prohibited from participating in Europe. The site was developed for another big client, General Electric Company. But several others have begun using it. “We’re providing a level of service to a lot of our clients that they didn’t know we were capable of,” says Powers. “We’ve chosen to use the technology as a market differentiator.” The firm charges a monthly fee for access to the site. The fee helps to recoup costs, but the real benefit from the site is better client relations. “We’re charging less than the value we’re conferring,” Powers says, “Our clients are loving it, and that’s what matters.” Foley & Lardner is also building its KM system by focusing on its clients. “The sweeping, internal KM initiatives have failed too many times at too many firms,” says Doug Caddell, Foley’s chief information officer. In Caddell’s opinion, they require too much lawyer participation with too little immediate return. “We’re trying to listen closely to what our clients want, and go with that,” he says. The firm has set up an elaborate employment law Web site with one of its larger clients, Johnson Controls Inc. The site lets HR personnel and in-house counsel read the latest employment law news, pull status updates on pending litigation and deals, and access documents. Caddell says that a handful of Foley & Lardner lawyers use the site on a regular basis. The firm has also set up discrete Web sites with a handful of other clients. The introverts are going with a different strategy. They’re searching the contents of redwells, files, and hard drives to find valuable nuggets of knowledge. They have assembled management committees on KM, and hired teams of people to work solely on internal, KM-related issues. A handful of heavyweight firms, like Kirkland & Ellis, New York’s Simpson Thacher & Bartlett, and San Francisco’s Brobeck, Phleger & Harrison, have hired highly skilled knowledge officers to spearhead their initiatives. The introverts’ projects are expensive and time-consuming. Brent Miller, the director of knowledge management at New York’s Cleary, Gottlieb, Steen & Hamilton, says a sweeping KM initiative can easily cost $10 million. Donald Oppenheimer, chief knowledge and information officer of Boston’s Goodwin Procter, estimates it will take his firm at least three years to finish its KM project. The initiatives require a lot of lawyer time that could otherwise be billed to clients. “It’s a constant communications challenge with our attorneys,” says Oppenheimer. “Most of them are cooperative, but we’ve still had attorneys ask me why they should devote so much time to a project that takes down our billables.” But these firms’ IT staffs are telling skeptical lawyers that efficiencies won’t lead to smaller partner profits, but to faster, better service for clients. Which, they hope, will lead to better client relationships and more billable work. Some experts swear by the strategy. “I have yet to see an [extrovert] that’s figured out how to spread its knowledge across the entire firm,” says Kirkland & Ellis’s Martin. In Martin’s eyes, those firms that devote the time and money to sorting their existing information will build the state-of-the-art extranets later. “Once you’ve built a solid infrastructure, you’re going to have a lot more flexibility with clients,” he says. The thinking goes like this. Say a client gets sued for securities fraud. The law firm that has assembled a cross-referenced trove of knowledge will be able to immediately pull up examples of old motions to dismiss, marginalia on good expert witnesses, and the paperwork supporting the client’s latest Securities and Exchange Commission filing. The firm lacking a comprehensive system won’t be able to do this nearly as quickly. That is, if it can do it at all. “In my opinion, a law firm absolutely has to build up a base of knowledge before it can maximize the value it brings to its clients,” adds Gretta Rusanow of Curve Consulting, a Sydney- and New York-based knowledge management consulting firm. Perhaps. And in time, the introverts’ strategy might pay off. But for now, they’re mostly standing in the corner, watching the extroverts chat up the room. Back to “The Power of Knowledge Management.”

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