A RECENT study suggests that US law firms invest less in knowledge management staff than European practices (www.almresearchonline.com). Knowledge management (KM) is capturing, nurturing and recycling the collective expertise of a business. In a law firm this means building up readily accessible bodies of standard documents, procedures, checklists and advice, so that duplication of effort is avoided. The study investigated 71 leading law firms around the world, 40 per cent of which will spend more than $1 million on KM this year.

The apparent parsimony of US legal businesses sits significantly alongside the fact that US firms are generally more profitable than their European counterparts. This is, at least in part, because they often handle legal work in a bespoke fashion where UK firms will standardise and systematise. Bespoke works takes longer and, because lawyers still bill by the hour, more work means more income. The efficiencies brought by KM often mean fewer hours, which means less cash. As long as it prevails, hourly billing provides a systemic disincentive for investment. Note, however, that where lawyers charge fixed fees, there is frequently much greater interest in KM.

LAWYERS are in the business of drafting documents and the time for wide-ranging systems to produce them automatically is almost upon us. For many non-lawyers, these systems are long overdue. Now a new document-assembly offering is on the market — PLC FastDraft by the Practical Law Company (www.practicallaw.com/1-203-1674).

The long-term impact of this type of technology cannot be overstated. From 1980 to 2000, the legal world made rather heavy weather of this challenge. But more recently, several tools have deservedly attracted much greater interest (such as DealBuilder at business-integrity.com and HotDocs at www.capsoft.co.uk), although the take-up has not been pervasive. Generally, for serious commercial work, it has been up to law firms or in-house counsel to buy the tools and build document generation systems themselves by inserting their own documents and expertise. The PLC FastDraft approach is different — on offer are finished, off-the-shelf sets of automated documents in given areas of law. Four modules are available (asset purchases, share purchases, leases and sale of land) and there is an ambitious pipeline of further applications.

The author lectures and consults internationally. He is IT adviser to the Lord Chief Justice and Honorary Professor at Gresham College. Contact: www.susskind.com

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