Connecting People

Eighteen months ago, we took a fresh look at our knowledge management (KM) and business development (BD) functions. What jumped out at us – almost immediately – was the rapidly growing overlap between these two core support activities. The time for managing them as separate entities was plainly over. So we integrated our KM and BD groups, becoming the first major law firm in the world to do so. Marrying our internal legal know-how with our knowledge of external markets was designed to sharpen up our client service and relationship management. And it has done – significantly.

KBD’s importance to our strategy
Better supporting the firm’s strategy was the primary driver for integrating KM and BD. The firm’s international strategy starts with our target clients – corporations, investment funds and financial institutions – i.e. with sophisticated global businesses. Our goal is to support these clients in their most demanding, complex transactions that in many cases cut across our offices and practices. The firm’s KBD investment is directly related (1) to ensuring our practices and lawyers have the tools needed to serve these target clients across our network and (2) to having sophisticated knowledge about our clients, their business strategies and their legal needs. We are in the business of matching our expertise and know-how to clients across our entire network. Therefore, putting these pieces together made strategic sense.

KM evolves toward business development
Putting together the two functions also reflects an evolution of both functions. Marketing and business development have been a feature of UK law firms for nearly 20 years, but knowledge management has been a major discipline in the UK legal field only since the mid-1990s. Unlike the approach taken in the US – where law firms often approach knowledge management as primarily an IT-driven service – the top UK law firms have also invested in creating professional support lawyers (PSLs) or knowledge management lawyers, changing working practices and empowering fee-earners to work more efficiently.
Originally, KM focused mainly on the internal needs of our legal practice. It was often the driver behind training programmes and the creation of standard forms, practice notes, survival guides and precedents. It rapidly expanded, however, to cover the production of many different types of current awareness – first focusing on news regarding legal developments for our lawyers and more recently used for alerting clients about important changes in the laws and regulations affecting their businesses. From there, KM has been moving more and more to identifying new products or services that our partners should be discussing with clients, and creating legal products tailored to the business needs of our target clients. At this point, KM is so close to business development that the obvious next step is to integrate the two functions. So we did.

Different personality types
It has been a challenging transition. For one thing, KM professionals (who traditionally have been former practising lawyers) and BD professionals (who traditionally haven’t been) are often very different personality types: as a caricature, the one is the cautious analyst and the other is the high-octane hustler. During the internal reorganisation at Freshfields, it was the KM lawyers who said: ‘Let’s slow down; let’s analyse this; let’s talk some more and make sure we have the right structures in place.’ In contrast, the BD people were saying: ‘Let’s get quickly through the reorganisation. We want to get back to work.’ In the end, both groups fully supported the business rationale behind the change.
One of the great positives of the last six months has been to see how well these two different personality types have worked together in the newly-integrated KBD team. While we still may be in our honeymoon, the marriage appears to be off to a promising start. We are also starting to experiment with some new roles in the firm. Increasingly, BD is seen as a career alternative for some lawyers and, in turn, some of our KM people are successfully turning into the new KM/BD hybrid that we call a practice development lawyer (PDL). As the name suggests, PDLs (as well as other members of KBD teams) are practice-group based. In addition, there are various central teams (covering, for example, systems; the central library; press and communications; publications and design; marketing and discrete business sector groups). Following the internal reorganisation, the central and practice group teams have also been integrated as far as possible and the integrated team is now referred to as knowledge and business development.

A new type of lawyer
So what are the differences between a practice development lawyer and a knowledge management one? Compared with a traditional KM lawyer, a PDL will be very close to the business, working in tandem with their practice group and its leaders, in many cases actually helping develop the group’s business plans. A PDL will have excellent knowledge of the major clients and target clients of the practice group. They will be thinking about how to match the existing know-how and expertise of the practice group with these client-development objectives, or in some cases developing training programmes and other tools to build the know-how and expertise that will be needed to meet the future needs of our clients. So, for instance, instead of spending time writing up a note on the impact of a change in law on our standard forms, the PDL will also be saying to partners: ‘That’s an interesting issue. How do we take that, work it up and have a really good seminar for those six clients we’re trying to get closer to?’ They will be thinking and acting in a much more commercial way, therefore, about how to translate our in-house technical expertise into opportunities.

Continuing the journey
The integration of KM and BD is not the end of the story, of course. It is the beginning of a journey towards a different mindset and approach. In future, we will be asking for more from our KBD people. So, for instance, we are running training programmes to introduce our KM lawyers to BD skills and marketing techniques. We will also be rigorous about people engaging with the firm’s business objectives. That will include looking hard at the cost of delivering the services KBD is providing; the best way of maximising the investment the firm is making in KBD; and whether our work is having a genuinely beneficial effect on the business done by Freshfields Bruckhaus Deringer.
Unsurprisingly, such a journey will present a number of challenges. In particular, it will be essential to establish a genuine rapport between senior members of a practice group and the KBD team attached to it. KBD team leaders will have to get much closer to the strategic business-planning process of their practice group: they will need to engage with the partners and fee-earners at a high level so that they can understand what will deliver the most value to the group. Getting that kind of buy-in from the lawyers is going to demand particular (and in some cases new) skills from our KBD people. But there are lots of individuals here who are thrilled to have that opportunity and are more than capable of seizing it.
Historically, knowledge management (and, to a lesser extent, business development) has essentially been a local activity. But KBD also has an important part to play in supporting the provision of an integrated and consistently first-rate service across all parts of our international network: that is version 2.1, if you like, of our internal reorientation. A major client needs to have the same experience of the firm in all our international offices. Appearing to be (and actually being) joined up is part of our brand, and if a client has a different experience in different parts of our operation, this undercuts our strategy. In future, as part of our overall drive to achieve and maintain consistency of excellence, KBD will be a key contributor to our delivery of integrated services to our major clients across the globe. Do we, for instance, run transactions in the same way, use the same diligence models, use the same standard forms and precedents and run the same high-quality seminars in all our offices?
As a firm, we have gone through what was at times a very challenging change process. Throughout, the aim has been to align our functions so that they provide a competitive advantage for the firm. Our job now is to build on the reorganisation and expand both the role of our KBD people and their business contribution to the firm.

Michael Hertz is director of knowledge and business development at Freshfields Bruckhaus Deringer. He can be contacted at Michael.herz@freshfields.com
Managing Partner, November 2007

Rapid Response

by Nick Sims, business development manager, finance

Following the internal restructuring in the firm, the KM lawyers and BD people attached to the finance practice group came up with some ideas on how to take our new KBD team forward. One of the suggestions was to establish a rapid response (RR) team that could spot market trends or news that we could then use for BD purposes.
The RR team consists of the finance KM lawyers and BD managers, plus certain partners from the teams that make up our finance practice. If there’s a major development, the KBD people meet very quickly to discuss what’s happened. We work out what action is required and discuss the impact of events on the firm’s business. We then prepare a briefing pack – including a checklist of things we think are important – which we give to the partner members of the RR team before they come to the next RR meeting.
The new system proved its worth with the August credit crunch. Although the crisis had been building for some time, no one had foreseen that it would happen so quickly or appreciated its massive impact on the global markets. When the storm broke, the KBD members of the RR team got together to look at some key questions:

What impact was the credit crunch going to have on our business?
What impact would it have on the banks, private equity houses and credit rating agencies, given that the leveraged finance market was going to be affected?
Who might be the next casualties after the sub-prime market?
What was the likely effect on emerging markets such as India or Russia?

The biggest problem, however, was that, despite the frantic media coverage, no one knew for sure what impact the crisis was actually having in the marketplace. So the RR team immediately prompted our finance lawyers to go out and ask their clients about the effect of the credit crunch on their businesses and products. Without this integrated KBD team, we would not have been able to launch such a vital intelligence-gathering operation anywhere near as quickly.

The PDL's story

by Julia Meuser, practice development lawyer, IP/IT

I’m one of the new breed of support professionals, a practice development lawyer. In May 2007 – and following the integration of the KM and BD functions – I took over from the business development manager and I’m now leading the international practice development team supporting the IP/IT practice group, which has more than 140 fee-earners worldwide.
How much has changed since the integration? At one level, not much. A pitch is still a pitch, and a standard form is still a standard form. But what has changed significantly is how we organise the work and how quickly we can deliver: it’s become a much more efficient process. Previously, it would, for example, be the BD person (a non-lawyer) who would talk to the partners about current awareness projects – such as a client briefing on IP/IT developments in the EU – and then have to rush round to the KM people to see what the hot topics were. That meant there was quite a bit of running back and forth by the BD staff – acting as intermediaries between the partners, the fee-earners and the KM people. This has now become a much more seamless process in which skills are allocated efficiently: the PDLs, with their legal background, decide on the topics and write the pieces up; and the BD side adds the market view, helps to avoid legalese, and assists with things like layout, distribution and reusing products.
Pitching is another area where integration has had a big impact. Previously, the BD person went to see the partner to find out what the pitch was about, how the pitch document should be structured and what sort of wording should be included. The BD person then had to sit down and write a first draft of text about often complicated technical legal questions. Now, we have a lawyer reading the request for proposal that comes from the client. We then put together a draft that we subsequently discuss with the relevant partner. So we’ve cut out that first meeting and accelerated the process considerably.
As a former KM lawyer, I know that many of the difficulties in the past stemmed from the fact that the KM people were not involved in the group’s business objectives and, as a consequence, often didn’t know who the clients were or what they needed. The lack of alignment of KM work with the business could lead to KM projects having a low priority in the eyes of the fee-earners, who would consequently fail to support the projects, further reducing the business relevance of the know-how produced. We produced standard forms, for example, following fee-earners’ experience and precedents from past projects, without being told what they were actually intended to achieve in business terms. This disconnect often meant there was no ‘business case’ for producing the standard form itself, so it would often wait months for sign-off and would only become available well after the need for it arose.
Integrating the two teams has had a huge effect on our integration into the practice group, our visibility and our communication with fee-earners. For example, we are running an exercise of making our workflows when pitching more transparent and consistent across offices. By implementing a pitch toolkit and making our resources available on the intranet, we are in much closer contact with partners and associates in all our international offices. Associates are contributing their ideas and engaging in an easier, day-to-day fashion in supporting pitches and KM projects, which helps the quality of our products – and is also more fun!