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Por y para profesionales del Derecho

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07/10/2022. 16:46:50

LegalToday

Por y para profesionales del Derecho

Leading the Edge (I)

founder of Hedley Consulting www.hedleyconsulting.com. Email: andrew.hedley@hedleyconsulting.com

If law firms are to be effective in building a competitive advantage through knowledge management (KM) they need to invest in both their infrastructure capabilities and the influencing skills of their knowledge leaders and advocates.

Leading the Edge (I)

The impact of KM leadership has two dimensions:

  • Creating a better understanding of how a firm can create competitive advantage through adopting a leading position. This will be achieved by managing current knowledge assets more effectively and investing in the innovation and creation of new knowledge capital;
  • A wider recognition of the importance of personal leadership skills by senior KM professionals, accompanied by ongoing investment in developing these capabilities. These will be at the heart of delivering ultimate success.

Taking the first of these dimensions, what are the potential benefits to a firm adopting a strategy based on clientoriented KM leadership?

My contention is that a law firm has two fundamental business constructs that it needs to optimise – knowledge and relationships.

Without wishing to cast the net so wide as to be disingenuous, if knowledge and relationships are considered in the fullest sense of these words, they encompass all that is important about the profession and its future vitality.

Knowledge and relationships

The word ‘knowledge' should rightly embrace the legal-technical knowledge that provides accurate answers to clients' questions and enables the efficient operation of the production machine that is the lawyer-base of the firm. However, we must broaden our thinking and the application of techniques more widely to encompass client, competitor, intermediary, relationship and market knowledge, if we are to inform the overall development of the business.

The intersect of knowledge and relationships is also clear: by unlocking the wisdom and insight embedded in client and contact relationships, the firm is able to surface a raft of new opportunities. The result will be increased revenues from current service lines and the broadening of the client franchise into new areas.

As Ross Dawson illustrates in his excellent treatise, Developing Knowledge-Based Client Relationships: Leadership in Professional Services, the effective use of knowledge assets is at the core of creating profitable client relationships, which deliver high-value and at the same time create a "vibrant and sustainable business model". He makes the important point that "in this world, the only way to lock in clients is by consistently being able to create more value for them than your competitors can. This is a positive form of lock-in, in contrast to the negative lock-in of trying to make it expensive for clients to leave you."

Of course, an added dimension of such an approach in an environment in which the war for talent is as much a business-critical issue as the war for client, is that effective KM techniques become an important factor in attracting the best people. We live in a world where a significant percentage, if not the majority, of new recruits have an eye as much on ‘what the firm can do for me' as ‘what I can do for the firm'. The existence of advanced systems that enable them to acquire this learning will be an added attraction. The challenge for the firm, of course, is retention and ensuring that key knowledge assets and intellectual properties are embedded in systems and processes.

An important question that needs to be considered is that, if KM does provide firms with a competitive edge, what sort of leadership skills are needed to ensure this advantage is maintained?

It is a truism that those building a career in KM, just like all other professionals, need to demonstrate high technical skills in their core subject materials to gain promotion up the first few rungs of their management ladder. Also in common with other professionals, as seniority increases the range of competencies that need to be developed broadens. Technical excellence becomes what business development strategists term a ‘hygiene factor' – it is necessary but not sufficient. Other capabilities will be needed to advance further, ranging from hard management competencies, such as budgetary control and project management, to softer skills centred on motivation, performance management and negotiation.

At the pinnacle of the development pyramid for KM leaders is the ability to envision the future, to articulate this in a series of compelling messages and to lead their team and influence their firm to achieve these objectives.

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