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Understanding Legal Knowledge Management

by Maryam Khan

case management software, practice management software, legal accounting software, legaltech, technology for lawyers, case management, immigration, london, united kingdom

Legal practice is a knowledge-driven business. A firm’s ability to manage its knowledge and expertise affects its profitability, efficiency, brand and reputation. Effective knowledge management is particularly important for law firms compared to other professions as there is a continuous influx of knowledge not simply from within the business but also from other institutions such as the courts and regulatory bodies. This article explains why knowledge management is important in legal practice and how law firms can benefit from such software.

What is legal knowledge management?

Legal knowledge management refers to collecting, creating, sharing and managing the knowledge and information of an organisation. It is a multidisciplinary approach to achieving business goals by utilising existing company knowledge efficiently [1]. Knowledge management software is used to manage, retrieve and store information to improve workflow, collaboration and process alignment [2]. Knowledge management software is used to manage, retrieve and store information to improve workflow, collaboration and process alignment. The knowledge management software designs the strategy behind the way law firms categorise legal information and develop taxonomies. Knowledge management software combines multiple legal technology tools such as search engines, e-discovery, document automation, and automated document review to successfully store an organisation’s information and data [3].

There are different types of knowledge within knowledge management. These can be divided into three categories; implicit knowledge, implicit knowledge and tacit knowledge. Explicit knowledge refers to the information easily put into writing, can be easily shared and is traditionally stored on legal databases. It is structured information that includes a set of instructions, reports and diagrams. On the other hand, implicit knowledge refers to learned skills and know-how. It is gained by using explicit knowledge and applying it to a specific circumstance. This refers to the type of knowledge traditionally excluded from information storage systems as it is difficult to capture it in a scalable manner [4]. Lastly, tacit knowledge is intangible information that is difficult to explain and put into writing due to its informal, personal or cultural nature. It takes years and experience to develop over time and is usually applied to specific situations. It is usually recorded in a few lines as opposed to a long formal document.

How law firms are benefiting from knowledge management systems

A strong knowledge management system is a great investment for a law firm. Not only does it improve operations, but it makes them more cost-effective as well. Here is what investing in a good legal knowledge management system can do for a law firm:

Creates A Central Repository For All Business Knowledge

A law firm needs to have a centralised knowledge storage system. Knowledge management systems ensure that important confidential information is well organised and easily accessible when needed. Additionally, legal knowledge management systems preserve knowledge for the future. With such software, you no longer have to depend on former employees who have left the business to transfer their knowledge and expertise before they leave. This is a significant loss to a law firm which can be avoided entirely if a firm has a legal knowledge management tool in place. This also encourages sharing of documentation, training materials and templates so that resources are available to different departments at all times without having to rely on one specific person or department.

Increases Client Satisfaction & Builds Relationships

Maintaining client relationships is key to a law firms business and reputation. Therefore, law firms need to stay competitive and utilise specialised tools to offer a unique client service. The main aim of legal knowledge management systems is to make workflow more productive, provide quality service and achieve results.

Building long-lasting client relationships is a huge priority for law firms as it costs nearly five times more to attract a new client than to retain an existing one [5]. Clients have much higher expectations from law firms that go beyond meeting compliance requirements and understanding the case. By using knowledge management systems, lawyers can spend more time on high-level work and maintaining client relationships instead of spending hours drafting and searching for documents.

Reduces Information Search Time

The McKinsey Global Institute Report found that a robust knowledge management system can reduce information search time by nearly 35%, raising total firm-wide productivity by 20-25% [6]. This figure highlights that access to a reliable knowledge database is crucial to a law firm’s growth. It reduces information search time and any other potential delays. It can be extremely frustrating when there is a tight deadline to meet, and the relevant documents cannot be located. These small delays can have a huge impact on the outcome of a case and your relationship with your client. However, with a robust knowledge management system, this can be completely avoided. This also enables lawyers to manage their workload better as they no longer have to spend time searching for documents or managing delays and can allocate their time and expertise to address other matters.

Increases Profit Through Optimised Fixed-Fee Cases

Legal knowledge management increases profitability by streamlining internal workflow, especially in the case of fixed fee cases. Knowledge management software is particularly beneficial for fixed fee cases as regardless of how many hours of effort a lawyer puts into researching or drafting documents, the fee still remains the same. Therefore, using knowledge management systems minimises time spent on contract drafting, administrative tasks, and due diligence. This minimises the amount of time a lawyer spends to achieve the desired outcome. Moreover, lawyers could allocate the extra time saved to more fee-earning work, which further increases profitability and positively impacts the business.

Increases Efficiency & Identifies Knowledge Gaps

Knowledge management systems function to store and reveal a legal practice’s available knowledge supply and the strengths and weaknesses of those areas [7]. Such software delivers insight into what certain documents may be lacking concerning their respective legal sector. Additionally, knowledge management systems help identify whether your firm needs stronger knowledge documentation and communication between departments and the wider business. By having access to this understanding and analysis, law firms can easily bridge communication gaps and strengthen their documentation to improve their processes and provide better client service.

Improves the Recruitment Process

Knowledge management does more than simply store information, and it can help a firm hire and retain the best candidates as well. Having organised and centralised knowledge resources allow law firms to bring new hires up to speed as quickly as possible to understand the business [8] better. Knowledge management systems ensure a smooth onboarding process which makes new hires feel more integrated into the business. Additionally, hiring managers receive applications from better candidates as they can effectively communicate what is needed for the role alongside candidates making better and more informed decisions about the role being offered. This effective communication across the business, hiring team, and potential candidates ensures that no time is wasted and that the right candidate is hired.

Locates Internal Expertise

Due to the knowledge and information a legal knowledge management system has accumulated over time, the software can build portfolios for employees who have expertise in a particular area and can easily locate them. This function within legal knowledge management software is referred to as ‘expertise location systems’. This data to build a portfolio of expertise is gathered from different sources, including employee resumes and their self-identified areas of expertise. We all do an algorithmic analysis of all electronic communications to and from the employee [9].

Why is it so important?

The International Data Corporation corroborated the value of a knowledge management system by highlighting that Fortune 500 companies roughly lose around $31.5 billion a year due to failure to share knowledge [10]. This shows how much of an impact knowledge management has on a firms profitability and workflow, making legal knowledge management software an essential investment for law firms.

Access to information is crucial in any business, especially in law firms. Not having the right information available, poorly organised documents and lost data can severely impact a case or a transaction. Therefore, information needs to be organised and carefully managed to be accessed quickly when needed during legal proceedings [11]. Knowledge management systems significantly streamline capturing, distributing and effectively using company knowledge, enabling the firm to function more productively [12].

The term ‘knowledge’ does not simply refer to complicated and lengthy legal documents, pieces of legislation, case summaries and case bundles. It refers to any content that is either produced externally or internally within a firm. This can be in any communications with clients, quotes and business pitches [13]. Knowledge management helps store and manage all types of information, data and content that a company produces instead of simply electronically storing legal documents.

Another reason why legal knowledge management is so important because it overcomes many challenges associated with traditional information management. Information stored on local drives instead of knowledge management systems is vulnerable to loss, damage, and theft. Moreover, suppose such information is not organised or discoverable. In that case, it can cause problems later if a client requests a file that is either found to be incomplete or entirely lost. Lastly, now that confidential information and legal advice are shared over emails, they need to be recorded in a management system. Without legal knowledge management systems, such information would not be easily stored and located when needed.

In Short

Without a legal knowledge management system in place, employees will have to take time out of their busy schedules to learn, relearn and process information. This is highly inefficient and costly as law firms can better allocate this time elsewhere. Legal knowledge management systems provide security and sustainability as law firms no longer worry about lost information if an employee leaves the company. Not only does legal knowledge management overcome challenges associated with traditional information management, but it also makes a legal practice more profitable due to an increase in productivity and competitiveness. Lastly, investing in and understanding the benefits of legal knowledge management software is essential for business growth as law firms need to properly leverage the depth and breadth of the experience it has acquired over time.

case management software, practice management software, legal accounting software, legaltech, technology for lawyers, case management, immigration, london, united kingdom


[1] ‘Knowledge Management’, Wikipedia, at https://en.wikipedia.org/wiki/Knowledge_management
[2]Alex Birkett, ‘’Knowledge Management Systems: The Ultimate Guide, Hubspot, at https://www.hubspot.com/knowledge-management-systems
[3] Marketing Team, ‘What is Legal Knowledge Management’ Cognitiv + (2020) at https://www.cognitivplus.com/what-is-legal-knowledge-management/
[4] ‘Types of Knowledge: Explicit, Implicit, and Tacit’, Get Guru at https://www.getguru.com/reference/types-of-knowledge
[5] ‘3 Benefits of Legal Knowledge Management For Law Firm Profitability’ Global News, Legal IT Professionals at https://www.legalitprofessionals.com/global-news/12595-3-benefits-of-legal-knowledge-management-for-law-firm-profitability
[6]MicKinsey Global Institute, ‘The Social Economy: Unlocking Value and Productivity Through Social Technologies’ (2012) at https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-social-economy
[7] ‘Law Firm & Legal Knowledge Management’, Get Guru at https://www.getguru.com/reference/law-firm-knowledge-management
[8] Abhijat Saraswat, ‘The Competitive Advantages of Strong Knowledge Management For Law Firms’, Law Gazette at https://lawgazette.com.sg/practice/practice-matters/the-competitive-advantages-of-strong-knowledge-management/
[9]Michael E.D. Koenig, ‘What is KM? Knowledge Management Explained’ at https://www.kmworld.com/About/What_is_Knowledge_Management
[10] Pamela Babcock, ‘Shedding Light on Knowledge Management’, SHRM (2004) at https://www.shrm.org/hr-today/news/hr-magazine/Pages/0504covstory.aspx
[11] Ibid (3)
[12] Ibid (7)
[13] Ibid (3)