Introduction

In Part 1 of this article I explored the opportunity for professional service firms to apply process management practices to their services and internal support processes to drive improvements in cost and service. In Part 2 I will discuss the key role that Knowledge Management could play in helping to realise this opportunity.

A key role for Knowledge Management

Some mid to large professional service firms have established internal teams to help coordinate and drive process improvement and re-engineering activities, in a mid-sized firm this can be simply one person in a coordinating role or as ‘Director of Transformation’. In larger firms, investment can be more significant. The major global law firm Clifford Chance, established a Continuous Improvement programme, focused on improving the firm’s efficiency and service. To support this programme they set up a core team, staffed by new hires with skills in Lean and Six-Sigma improvement methodologies. This group provides a skilled resource to support their internal process improvement activities. To date the firm reports that around 450 associates and partners have been involved in Continuous Improvement projects. The firm plans to have trained 20% of its lawyers in simple continuous improvement tools by the end of 2014.⁴

However, many firms would struggle to provide such a level of resource. An alternative approach is to utilise existing functions in a firm. The IT department is one obvious option, but its analytical skills and focus is naturally on technology, not business processes. I believe a better solution lies with the Knowledge Management function, as identified in the EU report referenced in Part 1⁵: ‘This is one reason why some service firms are looking intently at knowledge management systems and practices that would allow them to capitalise more on their accumulated knowledge. In some cases this may mean codified systems of problems and solutions; in others it may mean enabling access to tacit knowledge by facilitating mentoring, networking, and location of relevant expertise. Institution of such systems is likely to mean more attention to issues of intellectual property.’

However, in my experience, a solution focused on Knowledge Management (KM) systems and practices as currently operated within professional service firms would be insufficient. This is because Knowledge Management in most professional service firms focuses on ‘technical’ content (e.g. legal precedents, consulting bids) rather than process knowledge (e.g. service definitions and performance targets, standard operating procedures for services and processes, actual service performance v targets, client service feedback, improvement activities and outcomes). Despite this, I believe that KM is well placed to play an important role in process-based improvement activities for the following reasons:

• Knowledge Management is a recognised function within most professional service firms.
• Knowledge Management already has an infrastructure and budget in place in most professional service firms - with an organisation (typically small), some established processes, and a Knowledge Management IT system.

Process management within Knowledge Management

However, to play an effective role in process improvement, Knowledge Management (KM) would need to broaden its focus and establish new processes that better integrate with the daily business in the following ways:

• Widen the KM remit to include process knowledge within the firm.
• Use the KM support network in the firm to work with each service to develop the following key knowledge artifacts: 1. A service process description 2. Key service & internal process performance targets (e.g. service level targets, fee earner target times) 3. Key performance indicators for services and internal processes.
• Establish a ‘light touch’ process for gathering individual service performance on a regular basis (ideally monthly, but at least quarterly) and make this available to service leaders and firm management for improvement actions.
• Enable the KM system to capture and share new improvement ideas and results (or utilise a separate Ideas Management system).
• Support improvement initiatives in each service team or business group by providing the required performance information and developing improved support metrics.

These changes would enable firms to effectively capture and harness the knowledge of the performance and potential improvements in daily work and drive major improvements in service efficiency and value in firms. Making service performance available would be powerful in itself in driving improvement, as in most firms this information is difficult to get. Of course the KM function alone cannot do this, but they would provide critical support to business areas to enable it. In doing so, the role of Knowledge Management in professional service firms would be broadened and strengthened to become a strategic foundation for firm-wide innovation.

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[4] This case study is discussed further in pages 121 & 129 in ‘Innovating professional services – transforming value and efficiency’ by Alastair Ross. Published May 2015 by Gower. ISBN-13: 978-1472427915

[5]‘The future of R&D in services: implications for EU research and innovation policy’, a report commissioned by the Science and Technology Foresight Unit of DG Research By PREST - Policy Research in Engineering, Science and Technology (UK) TNO (Netherlands) SERVILAB (Spain) ARCS (Austria) March 2006.

Thanks to Trevor Comyn, Director Knowledge, Learning & Development for Mills & Reeve LLP for his input to this article.

Alastair Ross is the Director of Codexx Associates Ltd, providing innovation and re-engineering services. His latest book ‘Innovating professional services – transforming value and efficiency’ was published by Gower in May 2015 and is available to KMI blog readers at a 35% discount.  Visit http://www.gowerpublishing.com/isbn/9781472427915 and use discount code G15JNW35.