Australia: Knowledge management in Australian law firms and the accelerating rate of change

Last Updated: 14 January 2013
Article by Leona Blanco and Chris Latta

In brief - Advances in technology and demographic changes are revolutionising the way that law firms manage knowledge

Technology is becoming more powerful and pervasive. Lawyers are younger and more of them are female. The need to share knowledge in today's legal profession is an ongoing challenge within law firms where individual lawyers have traditionally competed for billable time and to be seen as the expert.

What is the difference between information and knowledge?

In the last half of the last century, the world moved from an industrial society to an information society. We are now transitioning from an information society to a knowledge society. The difference between information and knowledge is that computers have information and people have knowledge: people know what the information means.

As the saying goes, everyone is entitled to their own opinion, but not their own facts. The facts are information, the opinion is knowledge. While facts beat opinions that aren't in alignment with the facts, once the facts are established, it is the best opinion on the given facts (that is, the best application of knowledge to the problem) that will win.

Consequently, for most organisations knowledge is their key differentiator. It is the basis of their business and at the heart of their competitive advantage. This is amplified in information based businesses like law firms. As such, managing something as seemingly intangible as knowledge needs to be a core business strategy.

Rate of production of knowledge is increasing

There is also an increasing abundance of knowledge available. Individuals are bombarded with information almost continually. Some, probably most, of this needs no action taken on it, some should be outright ignored.

Some of the information needs to be codified into knowledge. Not only is this production of knowledge increasing but the rate of the production of knowledge is itself increasing. This makes knowledge management even more crucial. (See Knowledge Management in Law Firms by Stefane Kabene et al.)

Expansion of knowledge drives need for greater efficiency

Law firm knowledge managers often feel that they are being asked to do more with less.

Now, you can't actually do more with less. You can do something different and that something different may be more effective but you can't actually do more of the same for less. However, if the production of knowledge (both the volume of knowledge and the rate of production of more knowledge) is increasing, then simply through the passing of time you will be asked to do more with less.

So we need to become more effective. However, there is a problem. There are human limits that put a ceiling on our ability to absorb, process and retain knowledge.

Dunbar's number and the limits to human knowledge

British anthropologist Robin Dunbar theorised that the number of social group members a primate can track and can keep a social relationship with is directly proportional to the size of the neocortex.

For humans this number is around 150.

For knowledge managers, this type of research has a compelling message. Dunbar's number tells us that human knowledge (in this instance, knowledge of a person's social network) has limits.

By extension, this informs us that, as amazing as the human brain is, there are limits to the amount of knowledge that we can formulate, process and store. Beyond this, we are going to need help.

Fortunately, help is on its way.

Evolution of computers in the last 30 years

Thirty years ago (1982), a personal computing device of the day - the Osborne Executive portable computer - weighed 13kg and cost $2,495. The phone that many people carry in their pocket, the iPhone, is one hundredth of the weight, a hundred times faster and costs a tenth of the price.

For a more recent example, the phone in your pocket is probably as fast and has similar capacity to your desktop computer of just over a decade ago.

Moore's Law, processor speed and memory capacity

Moore's Law states that the number of transistors that can be inexpensively placed on an integrated circuit doubles approximately every two years. This affects things like processor speed and memory capacity so that these are increasing at an exponential rate as well.

For a long time, due to capacity and processing constraints, our personal computers have been mostly information processing devices. They have been excellent at it, augmenting areas that our human brains are weak at: speed of computation, and storing and processing vast amounts of data quickly.

If Moore's Law keeps holding, then by the year 2020 your personal computer will be able to process information as fast as the human brain. We are in a transition phase from personal information devices to personal knowledge assistants.

Already there are systems that are available for knowledge in your pocket:

  • Siri on the iPhone can work out what you mean when you say "Will I need an umbrella this afternoon?" not just parsing voice to text and processing the meaning of that text, but knowing why you would need an umbrella, where you are located in the world, what time "this afternoon" means and what the weather will be.
  • A software system called Summly parses and summarizes web content into bullet points on your iPhone.
  • Symantec has introduced transparent predictive coding into document classification in a product called Clearwell eDiscovery Platform.

So we see that knowledge management systems are becoming increasingly available at the personal device level and this trend will accelerate.

Lawyers increasingly needing to share knowledge

Knowledge sharing is key to knowledge management and to organisational success. However, sharing knowledge requires an open mindset which is challenging for law firms where lawyers are individually competing for billable time and to be seen as the expert.

We can see this changing in the current generation of lawyers who are more used to sharing information (sometimes too much information) online with social media tools like Facebook and Twitter.

Demographic changes in the legal profession

There is a large demographic and therefore cultural shift with the current generation of lawyers. In 1988 only 20% of lawyers were female; now 46% are female, and this is expected to continue with more females studying law than males.

One out of every ten solicitors has been admitted for less than a year, nearly a third for five years or less.

In the last year in NSW:

  • The profession grew 4%
  • The number of females increased 6%
  • 60% of new practicing certificates issued were to females
  • 15% of solicitors work part time (21% of females, 10% of males)

Younger lawyers, more females and more flexible work arrangements

In the next five years:

  • The number of lawyers will increase (both absolute numbers and per capita)
  • The number of law firms will increase
  • The number of sole practitioner law firms will increase
  • More than half of all legal practitioners will be female, up from 20% twenty years ago – non-private practitioners are already over 50% female and will go to over 60% female
  • Corporate sector will rise to around 20%; government will be steady at about 10%
  • There will be fewer older, male solicitors
  • Average age of legal practitioners will fall
  • Flexible work arrangements will increase

New generation of lawyers embracing technology

So there is a gender balance shift and an age balance shift. With that has come an IT literacy shift with a corresponding cultural shift.

There is also a work/life balance shift which is being increasingly assisted by technology. Emails and the internet were relatively new technologies for law firms just over a decade ago. Now you have them in your pocket.

We believe this is a significant time for our profession, where the three facets of knowledge management are converging:

  • Technology
  • Organisational (or cultural)
  • Ecological (interactions of people, systems and knowledge)

The technology is becoming more powerful, more personal and ubiquitous; we have younger, more technically adept people moving into positions of power in our firms, yielding a cultural shift; and the intersections between people and systems, and the knowledge assets that they manage, are becoming seamless and frictionless.

Knowledge sharing is key to good knowledge management

At the heart of knowledge management is culture - developing a culture of learning and a culture of sharing. Because at the end of the day, knowledge is about connections.

After all, the most important development in telephony was not invention of the first telephone, but the installation of the second telephone.

This article is based on a presentation given by Leona Blanco at the Ark Group's Forum on Knowledge Management in the Legal Profession in March 2012.

Leona Blanco Chris Latta
Information and communications technology
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Leona Blanco
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