Your guide to legal knowledge management

75% of companies surveyed by Deloitte said knowledge management (KM) is important to their continued success — but only 9% said they were “very ready” to tackle it. This discrepancy spells trouble for all corporate teams, including in-house legal.

Knowledge management isn’t a new idea, but its value for business performance has grown in recent years. Legal teams with hybrid or fully remote models must be able to onboard new employees and seamlessly communicate with their existing ones — without relying on in-person training or physical documents. Additionally, turnover amid the Great Resignation represents a mass loss of employee knowledge — knowledge that’s critical to keeping legal humming along.

Legal knowledge management is the key to helping corporate legal departments maintain their productivity and ability to deliver enterprise value in a rapidly evolving business world. Teams need clear processes and procedures that make it easy to store, access, and share key information. Preserving this wealth of knowledge will make scaling seamless for in-house teams because legal and other departments are on the same page.

What is legal knowledge management?

Legal knowledge management refers to the way corporate legal departments create, preserve, and share information within their team and organization. This information can be broken down into three categories:

1. Explicit knowledge: Basic operational information that’s easy to systematically document and share
   • Examples: Standard operating procedures, company policies, legal data and related reports, current case laws, templates
2. Implicit knowledge: New information learned through applying explicit knowledge, varies across employees and may or may not be documented
   • Examples: Best practices, specific contract or billing formatting for outside counsel, technology “hacks” and issues
3. Tacit knowledge: Subjective information learned through personal experiences, difficult to capture in a standardized way
   • Examples: Co-worker and vendor communication styles, habits, personalities, and personal information

All three areas should be covered in your legal knowledge management program so employees can develop a thorough understanding of your department’s processes, external relationships, tools, culture, and people.

The benefits of legal knowledge management

For in-house legal, knowledge management improves team performance while supporting the company’s bottom line. The sooner you start working on a legal knowledge process, the faster you can reap these positive rewards.

Saved time leads to better productivity, employee satisfaction, and onboarding

A structured approach to legal knowledge management reduces the amount of time employees spend digging for information — which, according to Coveo, is an average of 3.6 hours each workday. These productivity losses significantly impact the bottom line, with Panopto recording an average loss of $2.7 million for businesses with 1,000 employees up to a staggering $265 million for companies with 100,000 employees.

When employees can quickly find what they need, they can do more strategic work that supports the financial health of a business. And this more efficient use of their time also reduces the likelihood of costly burnout and turnover, the latter of which worsens knowledge gaps. Coveo notes that the “stress and hassle of locating the right information” increased feelings of burnout among 31% of respondents, and 16% of employees said this made them want to quit.

Additionally, clear processes and systems for storing and sharing knowledge speed up the onboarding process. This means new legal ops hires are prepared to tackle their job responsibilities and deliver value faster. A seamless onboarding process is also key to employee retention, with Digitate finding that people are twice as likely to start job hunting after a negative onboarding experience.

Less knowledge loss and fewer inaccuracies mean fewer risks

Legal knowledge management is also a form of risk management. When corporate legal teams don’t have all the accurate information they need to do their job, performance inevitably suffers, and they make poor decisions. Relevant information should be easily accessible, correct, and updated to reduce risks. That way, legal members can take informed action that best supports the department and organization.

Without clear documentation, in-house members are left on their own to figure out how to approach problems and everyday tasks. When there’s no set precedent to follow, a lack of knowledge-based assets leads to quality and consistency issues that negatively impact productivity and strain working relationships.

For example, without documentation about how to prepare a C-suite report, you can easily find yourself spending hours creating a report that isn’t formatted correctly or is missing relevant information. Not only does this reflect negatively on you and the department, but it also adds more stress when you have to redo work. With legal knowledge management, there’s a clear guide outlining what C-suite members want in terms of reported metrics and stylistic preferences, helping you deliver the most value and solidifying their trust in you.

A lack of knowledge sharing is also particularly problematic when it comes to legal spend management. If no one tells you or shows you where specific factors like law firm volume discounts or discounted timekeeper rates across vendors need to be applied, you’ll either end up missing out on significant cost savings or having to adjust vendor invoices at the last minute. Both of these situations create more complex problems for you and your team to deal with—problems that could’ve been avoided with knowledge sharing.

Better collaboration between legal and non-legal departments supports enterprise success

Legal knowledge management is the foundation of keeping key information clearly organized and easy to access and share, making effective collaboration with teams like IT, finance, and sales is a breeze. And the easier it is for business units to quickly share information with each other, the smoother a company functions. Without knowledge management, communication silos arise, causing tension between departments and making it hard for people to get tasks done on time. These issues cost businesses a shocking $1.2 trillion each year, according to Grammarly and The Harris Poll.

Not only does improved teamwork support the overall success of the business, but it also helps boost corporate legal’s internal reputation. According to Onit’s Enterprise Legal Reputation Report, 61% of non-legal employees say legal is unresponsive, and 65% admit that this causes them to bypass legal’s policies and processes to get their work done. Going back to risk management, efficient knowledge sharing is critical to ensuring that legal’s input is both welcomed and followed.

As Slack’s Devon Maloney says, “Knowledge sharing is caring.” When you freely share knowledge assets with colleagues, it demonstrates that you’re a helpful team player and not a hindrance. This transparency and responsiveness creates stronger working relationships and dispels stereotypes of legal teams being arrogant or cold. You’re all in this together, and knowledge management will help reinforce that idea.

The top 3 tips to weave legal knowledge management into your workflows

While the benefits of legal knowledge management are easy enough to understand, the actual process of implementing it is much more challenging for legal teams — especially large ones. But no matter your team’s size, these foundational actions will set you up for long-term knowledge-sharing success.

1. Set clear objectives that address recurring problems

The first step to a beneficial legal knowledge management process is to identify common pain points. From there, you can set goals designed to resolve these high-priority issues.
Effective legal knowledge management is like building a stellar employee handbook—you want to be able to provide clear solutions and walk-throughs for common questions and complex topics. To identify where you are (or aren’t) currently hitting the knowledge-sharing mark, send out a survey to your legal operations team and in-house counsel that includes questions like:

• What documents or information do you spend the most time searching for?
• Why is it hard to find these resources?
• What do you do if you can’t find the information you need? How does this impact your work?
• Do you think our current tool(s) for storing information are effective? Why or why not?
• What tool(s) do you primarily use to share information? (E.g., email, Slack DMs, Dropbox)
• Where do you store your own personal work notes?
• What resources do you wish we had available but currently don’t?
• How would you improve our current approach to creating, storing, and sharing knowledge on our team and with other teams?

These types of questions will uncover the most glaring issues to address, from missing intellectual capital to clunky KM systems. Then, create objectives that will help remedy these issues. For example, “Reduce friction with Sales by migrating contract templates to one location” or “Create a document outlining the reporting process for new hires.” Periodically update your objectives once a quarter to ensure things stay on track.

2. Decide what legal knowledge management tool to use

If your survey results reveal widespread dissatisfaction with the knowledge management system you use to create and store information, it’s time to reevaluate and find one that works better for your department.

Review the complaints surrounding your tool, whether it’s an intranet portal, a spreadsheet, legacy legal tech, or something else. Just like when you set the objectives, these insights will help you determine what type of tool will best support your legal knowledge management. Whatever the issues are, use these as a kind of checklist when reviewing different document management tools to make sure you’ll get a strong return on investment.

For instance, if your team was desperate for better search functionality, it’d make sense to consider looking into document management software that had robust tagging capabilities that made it easier to categorize and find documents.

While it’s a good idea to reach out to other legal departments and peers to get an idea of commonly used knowledge bases, you don’t want to base your decision solely on their input. Remember that different legal teams have different goals, sizes, maturity levels, and budgets — the legal knowledge management tool that works best for them might not support your team’s unique needs.

3. Outline the process for creating and updating materials moving forward

When creating a new knowledge management strategy, you also need clear guidelines around the way new resources should be created, categorized, stored, and maintained. This will keep your knowledge management system working efficiently and prevent the same disorganization problems you had before you instituted the program.

These procedures will vary depending on what type of management system(s) you decide to use. For example, if you use legal technology with embedded document management, you won’t need guidelines to avoid accidentally overwriting versions because the platform saves each version. But you might need to explain how to change a user’s access to documents.

If you’re using a master spreadsheet, it’s a good idea to outline data entry best practices, from color-coding keys to whether to use bullet points or sentences. It might seem like a lot of work to get these granular details together initially, but it’s an investment that will pay off in the long run when employees can easily find what they need.

Support legal knowledge management by supporting continuous legal learning

At the heart of every legal knowledge management initiative is, well, knowledge. Continue to hone your legal and business acumen by subscribing to our free legal newsletter. With regular, expert content on everything from legal spend management to vendor relations, the SimpleLegal blog is here to help you succeed and thrive — no matter where you’re at in your legal ops journey.