Knowledge managers open lawyers' wisdom

By Selwyn Parker

Cultural seachange means all a firm's clients can benefit from an experience.

Meet the knowledge manager, the archangel of the information age.

When transtasman law firm Phillips Fox merged in July to create one corporate-style structure, it began implementing a 200-page proposal drawn up over 18 months of research and planning.

In this, the knowledge manager figures large, with the task of harvesting the collective wisdom of more than 600 lawyers and storing it in a tailor-made system called FoxTrek.

These pearls, unearthed by the knowledge managers, are then made available to be tapped by lawyers for their clients' benefit.

As Phillips Fox first chief executive, Tony Crawford, told the Business Herald from Sydney: "The technology [FoxTrek] enables us to unlock all this knowledge and experience. Without this enabler, that was very difficult."

Most of the knowledge managers - one for each office - are qualified lawyers, which should greatly assist them in fossicking for these pearls of wisdom.

Behind their appointment, however, lies a cultural seachange. Big law firms are notorious for fiefdoms (see accompanying story) in which knowledge with a company-wide value is routinely protected, often for personal reasons.

In Phillips Fox as in other firms, the dissemination of knowledge useful to all the practice's clients, instead of just one partner's clients, will require a change of attitude, as Mr Crawford admits.

"It will require a single point of leadership [to make it happen]."

According to sources, not everybody is enthusiastic about the creation of an international, corporate structure from what had been a federal arrangement in which much useful knowledge fell between the desks. But the merger was forced on the firm, as on others, by the changing market for legal services.

"In a word, it was heightened competition," summarises Mr Crawford.

This partly resulted from the globalisation process whereby giant interlopers from the United States and Britain have established offices in Australia or simply bought up partnerships. Several firms have already gone this way and rumours are rife about others.

Then there are the global accountancy firms who are busy stocking their office towers with lawyers.

The result is that in the legal sector, belatedly compared with other sectors, the client is now king and an increasingly demanding one at that. For example, Phillips Fox's clients include a number of listed companies who do business on both sides of the Tasman, particularly in financial services, property and insurance sectors.

For them, a federal structure is clearly far less helpful than one that leaps national boundaries.

The integration of Phillips Fox's 11 offices in New Zealand, Australia and Vietnam also provides the extra capital the firm needs to buy the infrastructure to store and tap its resident wisdom.

Adds Mr Crawford: "It's intellectual capital, a key issue for all large law firms."

Also like other large law firms, Phillips Fox has grappled with the issue of remuneration. In future, employees will be rewarded through a combination of financial performance in which billable hours form but a part of client and staff satisfaction.

The weightings attached to the two measures will vary according to the country and the sector in which a particular division operates.

If this sounds like the "balanced scorecard" espoused by the intellectual capitalists, that's exactly what it is. For a big law firm, it's a revolution.

* Contributing writer Selwyn Parker is available at wordz@xtra.co.nz