Integration in Legal Services

Volume 7 • Issue 4 • May/June 2021
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Knowing Is Half the Battle

A look at knowledge management

In “Vertically Integrated Legal Service,” Richard Susskind and Neville Eisenberg point to knowledge management as a key element in law firms’ potential to vertically integrate. “The 2020s,” they write, “should be the decade during which knowledge management comes of age—helping lawyers to become more efficient, providing playbooks for staff engaged in process-dominated work, and underpinning the automation of appropriate tasks and activities.” As law firms become more complex and vertically integrated, Susskind and Eisenberg argue, it becomes all the more important for organizations to be able to access their core knowledge as efficiently as possible. A well-developed and well-utilized knowledge management system should—ideally—also assist professionals, including those from nontraditional backgrounds, access the combined expertise of the organization writ large.

In what sociologists call “institutional elaboration,” many organizations now have dedicated knowledge management personnel.

In this article we explore knowledge management as a concept. First, we consider what knowledge management means, broadly as well as in contexts other than the law, such as healthcare. Then, we turn our attention to knowledge management in the legal profession by presenting a case study of McKinsey’s legal department as it navigates a major knowledge management transformation. These examples and insights offer a sense of the possible ways forward for the legal profession in a postpandemic knowledge landscape.

What is knowledge management?

In 2001, former Fortune magazine editor Thomas A. Stewart published an influential book entitled Intellectual Capital: The New Wealth of Organizations. In the book, Stewart writes, “Information and knowledge are the thermonuclear competitive weapons of our time. Knowledge is more valuable and more powerful than natural resources, big factories, or fat bankrolls.” Stewart goes on to note that this does not mean a “clutch of PhDs locked in a lab somewhere” or even IP assets (as critical as they may be). Rather, he argues, knowledge is the “sum of everything everyone in a company knows that gives it competitive edge… It is the knowledge of a workforce: the training and intention of a team… It is the electronics network that transports information… It is collective brainpower… It is the collaboration—the shared learning—between a company and its customers.” Stewart concludes with perhaps the most critical and elusive part of the equation: “It’s hard to identify and harder still to deploy effectively.”

Twenty years later, knowledge has become increasingly core to all business operations. Precise definitions of knowledge management vary, but the term is often understood as a process or function dedicated to capturing and making efficient use of information through not just the storage but also the transfer, analysis, and development of information related to a given organization. In what sociologists call “institutional elaboration,” many organizations now have dedicated knowledge management personnel who are tasked specifically with building, maintaining, and developing the systems and processes to collect and disseminate information within their businesses. It has also produced a cottage industry of advisory services and even certifications in knowledge management.

Douglas Weidner leads the KM Institute, an organization that specializes in such knowledge management training and in many ways aligns with Stewart’s thinking. As Weidner explains, knowledge management can be more readily understood and applied when broken down into its component parts. Examples include capturing and communicating best practices, onboarding and training new hires, identifying experts and expertise, exciting creativity, and transferring knowledge between employees. In short, knowledge management is a multifaceted endeavor at any organization—one that requires thoughtful strategy, competent professionals, and buy-in from all stakeholders.

As law firms become more complex and vertically integrated it becomes all the more important for organizations to be able to access their core knowledge as efficiently as possible.

Today, Weidner notes, discussions of knowledge management often fixate on the storage aspect instanced by digital repositories—for example, a shared company file folder containing a subset of important administrative documents. “But it’s about so much more than that,” Weidner says. “Rather than just being a repository for documents, which any information technology can do, we need to think about knowledge management as being much more granular.” Indeed, to grasp the full scope of knowledge management, he stresses the difference between “data” and “knowledge.” One point of emphasis in Weidner’s programs: data, information, and knowledge are hardly interchangeable. Rather, they indicate different levels of detail as well as context—a relationship some refer to as the “knowledge hierarchy,” depicted as a layered pyramid (see Figure A). The message for participants in Weidner’s program is that knowledge management is not reducible to data collection and storage. Knowledge management requires strategy and purpose.

Figure A

Pyramid split into three levels: At the bottom is

What does the data say?

In 2020, as part of its Global Human Capital Trends survey, Deloitte Insights asked a series of questions about knowledge management. The results indicate both the promise and the challenge of knowledge management. A topline finding is that while three-quarters of organizations say “creating and preserving knowledge” is important or very important over the next 12–18 months, less than 10 percent report being “very ready” to address this trend.

According to the data, the majority of respondents (55 percent) view knowledge management as “sharing knowledge: documenting and disseminating knowledge,” while 44 percent view it as “preserving knowledge” and 43 percent as “creating knowledge: developing new services, solutions, products, processes.” Just over one-third—36 percent—view it as a means of “deriving value” and “tying knowledge to action.” Within that context, the vast majority of respondents nonetheless think their organizations are falling short in knowledge management—82 percent report that their organizations need to be better at tying knowledge to action and 79 percent report that “they must be more effective at creating knowledge to jump-start innovations and launch new products and services.” The biggest barrier to knowledge management was “organizational silos” (55 percent) followed by a lack of incentives, technological instruction, organizational mandate, and frequent shifting of people, all between 35 percent and 37 percent.

It is important to stress that according to the data, knowledge management leaders—as a specific subset—often differed from the wider pool of respondents in their thinking, most notably in their definition of knowledge management. “These leaders,” the report states, “view knowledge management as more than a way of capturing and disseminating information; instead, they view it as a way of creating knowledge to develop new products, services, or solutions. By redefining the value of knowledge management, these organizations are able to break down cultural barriers that have prevented other organizations from taking a similar path.”

Claus Torp Jensen, former chief digital officer and chief technology officer at Memorial Sloan Kettering Cancer Center and now chief innovation officer and executive vice president at Teladoc Health, echoes this distinction. “In some ways the term ‘knowledge management’ is ill understood,” he says. “There’s more data than we know what to do with, but data is just that—it’s bits and bytes. Information is data in context. We now understand the context of the data and we may even understand the connections. Knowledge is information applied to a problem. That is why knowledge management should be understood in the context of a particular problem.” From this context, Jensen stresses that his “definition of knowledge doesn’t actually say anything about databases.” He continues, “It says experience with a situation. I took that and changed it a little and said, knowledge management is the ability to apply what you have learned in a particular situation. There’s the distinction between the experience-based understanding of the information versus the information itself.”

“We need to think about knowledge management as being much more granular,” says Douglas Weidner, chair of the KM Institute.

Through his work at Memorial Sloan Kettering and now Teladoc Health, Jensen has operationalized this vision with serious implications—patient outcomes can depend on how well his organizations collect, understand, communicate, and contextualize data-cum-knowledge. He gives the example of knowledge transfer that occurs both between doctors and between doctors and patients. “Sure, you can focus on traditional medical education or clinician-to-clinician exchange, and those are important,” he says. “But how do you educate the health consumer as to what their choices are?” Put a bit differently, knowledge management is both internally necessary—resources for a hospital’s doctors—as well as externally critical—knowledge for patients seeking care. To illustrate the real-world implications and the importance of context, Jensen offers the example of a young woman who has just learned that many of the women in her family developed breast cancer at a young age:

So where does she go to learn about the knowledge base of the medical profession in terms of what that might mean for her? Should she do different kind of screening? Should she get mammographies? Does having breast cancer make her more susceptible to other cancers? There are all kinds of questions. If I want to help this young woman, giving her access to a basic search function like Google is probably not going to help her. Walking her through a guided experience that asks pointed questions about what’s really going on and taking that guided learning journey is much more meaningful.

In offering this example, Jensen stresses that because context is so critical to knowledge management, there are no uniform solutions. “I do think there are things we can do to codify the data components of knowledge,” he says. “But it has to be delivered in different ways in different environments.” Indeed, the delivery of knowledge is highly contextual—how the young woman above accesses knowledge is likely very different than the doctor treating her, who might be drawing from the latest research or best practices from fellow oncologists before determining how to pass knowledge along to a patient in the most effective and thoughtful way possible. Mediums and access questions are therefore critical, and not always reducible to pure technological solutions.

Transforming Knowledge Management within McKinsey’s Legal Department

As one of the world’s top consulting firms, McKinsey & Company emphasizes an organization-wide investment in knowledge. McKinsey is also a large organization, with roughly 30,000 employees spread across offices in more than 130 cities around the world. Meanwhile, McKinsey also has legal needs, both to support its consultants in their work and to support the firm’s internal operations. Below, we consider McKinsey as a case study in knowledge management on these two levels: as a professional services organization in the knowledge business and as a legal practice setting.

“Knowledge management should be understood in the context of a particular problem,” says Claus Torp Jensen, chief innovation officer and executive vice president at Teladoc Health.

To explore how McKinsey approaches knowledge management, we spoke with Melissa Mason, global head of legal operations at McKinsey. Mason, who has a deep background in law firm management, came to McKinsey at a time of transition in the company’s legal department. While sourcing for Mason’s new role in 2019, the company was also selecting a new general counsel, eventually tapping Pierre M. Gentin, former partner at Cahill Gordon & Reindel, and before that, managing director in Credit Suisse’s Legal and Risk divisions. To understand how Gentin and Mason leveraged knowledge management to transform McKinsey’s legal department, however, one must first understand how the company approaches knowledge management firmwide.

To begin, it is clear from Mason that knowledge management is a core function at McKinsey: it is ingrained in the culture from top to bottom. Building on and reinforcing that culture, the company has dedicated functional capabilities specific to the development and maintenance of knowledge and learning within the firm. “By the time I came along, the firm had developed a sophisticated knowledge hub,” says Mason. McKinsey’s multidimensional, multidisciplinary, and multimedium intranet connects specific knowledge needs with the organization’s institutional memory. “Accessible by internal McKinsey employees only,” Mason says, “it is organized by practice page, by location. You can sort and filter by document slides, multimedia, expertise, assets, and resources.”

The system will also connect you to the people at the company with the expertise to help you learn more. “That kind of accessibility—and the fact that it is used consistently across the organization—is all part of the culture,” she says. It is so sophisticated, Mason notes, that it is often one step ahead of you.  She once went looking for a specific presentation layout template she had seen before that she wanted to use for a talk she was preparing to give. The challenge: all she could remember was the overall framework and a particular flow chart design. So, she took a shot, typed what she was looking for into the knowledge bank with a few descriptors, and, lo and behold, it was one of the first things that popped up.

The challenge

It is against this backdrop that Mason and her team have worked to transform the knowledge management of McKinsey’s legal department. Yet, Mason also faced a challenge that will be familiar to most legal organizations: How do you achieve higher-order goals like efficiency and accessibility with your knowledge when expertise so often resides in the heads of individual practitioners? In a setting like McKinsey, that challenge broke down into two subtasks. On the one hand, the legal department needed to serve the McKinsey’s “internal” clientele and stakeholders—primarily, its consultants, who often request contracting advice as a result of their consulting business. On the other hand, it was also important to optimize knowledge management within the legal department itself to ensure that the lawyers and legal professionals were able to access and employ the knowledge that they needed to do their jobs as efficiently as possible.

McKinsey’s multidimensional, multidisciplinary, and multimedium intranet connects specific knowledge needs with the organization’s institutional memory.

For the first half of the challenge, the legal department, rooted in a client-service mentality, began by launching a pilot program. “Our legal ops and design teams asked members of legal to share with us who they work with most closely on the consultant side and we interviewed those consultants,” Mason explains. “We asked them, ‘What’s working well when you’re working with the legal department? What pain points do you have? What ideas do you have for being able to access information? What is missing from what you’re seeing? Is there data that you would want to have handy in a cheat sheet or guide, and that would be sufficient for the specific need at hand?’”

She explains that the team also learned from internal clients where the gaps were. “Some would say, ‘I don’t know who to contact; I’m just used to calling X for everything,’” Mason recalls. “‘But, if there’s someone I can directly speak to on a particular topic without going through multiple people, that would be helpful and efficient.’” To operationalize this knowledge upgrade, she adds, “We have developed a portal where you can choose if you need someone for any one of our substantive practice areas and industry focal points.”

The team also learned that there were some types of knowledge that they could deliver more seamlessly to internal clients. “I’ll share a concrete example,” Mason says. “We are creating a build-out for a self-service portal for one of our most complex practice areas now.” She continues:

What we’ve realized is that there are some questions that are easily just the check of a box. Using a checklist, that colleague would then only need to reach out to someone in legal when they needed answers that were more nuanced or about the process. And so now, we’re doing a self-serve portal that will have checklists and dropdowns to be able to then route them to the right colleague in a more streamlined fashion.

Mason notes that while McKinsey’s legal function makes these operational improvements, it remains critical not to lose the human connection, both for the lawyers and for the consultants. Indeed, consultants often expressed their concern: “I don’t want to just go to a website and click on these boxes, and then get my answer. I don’t want to lose the connection of being able to discuss and problem solve verbally with someone.” This real fear was addressed by the system, whose goal was to share (legal) knowledge with colleagues in efficient and accurate ways. Some of this could—and would—come via technology, playbooks, and other “digital” innovations. But some would entail human-to-human knowledge sharing—and that required making sure people had the context to know where to go and who to call. “If someone still wants to pick up the phone and call someone, that works well too—part of the knowledge we’re putting in the system is who to call,” Mason adds. “On the other hand, there are some teams and colleagues who find short how-to videos or guides more useful. Where we can, we want to have that knowledge ready in different forms: Here’s a self-service tool. This is where you click for this. But if you need to discuss a contract about a provision or a clause, then you most likely want to have a real-time conversation.”

“What we’ve realized is that there are some questions that are easily just the check of a box,” says Melissa Mason, global head of legal operations at McKinsey.

The second, though related, part of the department’s knowledge management challenge centered on optimizing the legal department’s own organization of knowledge to make it more accessible in the fullest sense of the word. To do this, Mason and her team built a portal specific to the company’s legal function—a task that required a diverse team of talent beyond just legal practitioners, including other professionals like designers and tech personnel. It also required thinking carefully about the unique challenges of knowledge management in law. For instance, one of her first tasks was to centralize databases, while prioritizing confidentiality. They also created a “legal playbook” within the departmental portal, which includes answers to more basic questions, the right person to ask a more nuanced question, standard forms, a glossary of acronyms, the right format for a presentation, and where the firm is located around the globe for regional or jurisdictional information. “We have practice areas where there is so much knowledge, so much happening in an ever-changing environment,” Mason says. “We want to make sure that the thought of being unable to find information does not hinder people completely from reaching their full potential, from being able to grow and develop.” The goal is to have the portal as exhaustive as possible, including everything from an overview of the company to substantive skills needed for specific practice areas to staff directories with granular information down to available language fluencies broken down by region and team. Mason and her team are also working on creating a user-friendly dashboard interface, complete with extensive visuals and an enhanced query function to sift through all the information.

Getting it done

Mason understands that while all of these new approaches and technology are great in theory, they need to be operationalized—and used. Two closely connected virtues—patience and persistence—ultimately helped ensure the department’s knowledge management transformation did not stall out before such a launch was possible. Mason understood that to collect quality information, and to array it in a way that was intuitive for its users, could take time. “Our lawyers and legal professionals want to capture and code the knowledge—they want to contribute—but at the same time they’re supporting real-time legal matters,” Mason explains. “People have different demands on their time, so timing is everything.” She continues:

We took a holistic look at where we needed the information to be codified, and who would be able to do it, and we reached out in stages. We did initial conversations just to get feedback. And then, as we followed up, if someone said that they were swamped working on a deal or a matter, we said, “We’ll check back in with you in a couple months, whenever it works for you.” For example, one of our teams tends to be busier toward the end of the year with transactions, so we took it in stride and said, “Okay. We’re going to hold them until mid-January.” It wasn’t a pressure. There was no push that made people feel uncomfortable or that they weren’t able to do their client work. Our philosophy was client work comes first. This is secondary, but of course it helps the bottom line of being able to utilize resources effectively, so we’re going to make sure we get it done.

It was also important not to place too much of the burden of inputting knowledge into the system on too few people. By spreading the work across multiple people and multiple geographies, Mason and her team could afford to be more flexible with deadlines, avoid burnout that would drag on the department’s larger knowledge management project, and all the while create a more vibrant and extensive reservoir of knowledge. This approach means that progress is more jagged-edged than lockstep—some parts of the department have essentially completed capturing and curating their knowledge while others have moved more slowly—but again the priority is quality over speed.

“We took a holistic look at where we needed the information to be codified,” says Mason.

Once the new system was effectively launched, focus turned to walking the walk. And, while the collaborative culture at McKinsey is a boon to such an effort, Mason acknowledges that any legal department initiative that endeavors to change the way its lawyers work will encounter some static friction. “The largest aspect was implementation—in modifying people’s habits,” she says. Like many large legal departments, McKinsey’s people were used to doing what might be described as individualized knowledge management through decentralized efforts. Mason saw the way forward through training and demystification. “We held constant training and pilot demos so people could feel comfortable with what was going on,” she recalls. “Once they saw how organized and efficient the new system and function were, they were really happy to have it.”

Additional aspects of the new knowledge management system will go live across the legal department by the end of the summer. As for the system as a whole, Mason already has her eyes on upgrades that will render it even more useful and multidimensional. “I think our next two steps involve adding a robust interactive component and enhancing multimedia capabilities,” she says. Part of this, Mason explains, would allow more interactivity within the knowledge management system. “An interactive component could be either a chat or a message board feature so that if people had questions or had ideas, they could share them real-time and have a discussion,” she says. “For instance, they could say, ‘Oh, this provision in a contract reminds me of this example. This clause could be applicable for your new contract.’” One thing is for sure—they will have more knowledge at their fingertips than ever before.

Knowledge is comfort

The past year has transformed the way organizations approach knowledge management in unexpected ways. The COVID-19 pandemic has challenged businesses and governments alike to find new ways to collaborate, learn, and communicate. As the 2021 Global Human Capital Trends report found, 52 percent of respondents said that “workforce movement” is driving the proactive development of their knowledge management strategies. Practices like remote work, video conferencing, and flexible hours—once rarely seen in some settings—were instantly put to the test. How and to what extent will different organizations internalize the lessons of this experiment in alternative work approaches? What does this mean for the future of knowledge management?

“It’s been a long year for everyone,” Mason says. “But I think that knowledge has provided comfort.”

To Jensen, one lesson that will likely linger on is that healthcare is more capable of transformation than previously expected. “I think we learned that with the right motivation, healthcare can change much more rapidly than we thought it could,” he says. “New ways of delivering healthcare, like hybrid care, were used because it was necessary, but that genie is not going back into the bottle.” Jensen also points to fatigue with cumbersome processes as a phenomenon that is likely to remain, even as the threat of the pandemic fades. Whether it is the hassle of tracking down medical records or the experience of inadequate access to services through long periods of the COVID-19 crisis, Jensen expects patients will turn to what he calls “ambient solutions” to taking care of their health needs, such as wearable technologies that allow users to track their own health information in real time.

During the time she has been working remotely through the pandemic, Mason adds, the legal department has onboarded 65 new colleagues who have never seen the inside of a McKinsey office as an employee. “IT has sent their laptops to their homes and they did remote orientation with HR from the start,” she says. “They’re getting our department knowledge completely remotely, not in a room where they can have a whiteboard, where they can talk to people, where they can go out to lunch, where they can have an after-work gathering to meet each other. We look forward to going back to the office in some form, however, COVID-19 has definitely impacted how we think about and how we share knowledge.”

To Mason, burnout is also top of mind, and in an echo of Jensen’s insight, she is struck by the promise of knowledge management to help steer people through. “It’s been a long year for everyone,” she says. “But I think that the knowledge piece is something that has reassured a lot of people, because if they can find what they need in an organized and efficient manner, it saves them that extra exhaustion. Knowledge has provided comfort.”

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Integration in Legal Services Volume 7 • Issue 4 • May/June 2021

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