Knowledge management (KM) is broadly defined as a system or process of capturing, distributing, and effectively using information about and a company’s corporate practices. An effective KM framework allows organisations to increase operational efficiency, create value and achieve its strategic goals, with KM principles utilising digital collaboration channels to drive the way organisations manage data, projects and learning. The impact of KM to an organisation is significant, with Fortune 500 companies losing roughly USD 31.5 billion a year by failing to share knowledge, according to Forbes.
For in-house legal departments, KM supports efficient operation and ensures that the knowledge they work with is current and accurate. A recent study by the European Company Lawyers Association revealed that despite the fact that legal knowledge management is considered to be of high importance within legal departments across Europe, most legal departments evaluate their legal knowledge management systems as being underdeveloped. Furthermore, few companies have professionalised knowledge management functions, with dedicated teams to update as per practice and proactive research. The challenge lies in how unique the skill sets required to build a robust KM function are, usually requiring a good balance between expertise in the KM practice itself, as well as experience in the operating and servicing practice of the organisation.
Moving from a static to an actionable framework
Within in-house legal departments of multinational corporations, deploying the right tools is one of the key factors that makes KM leverageable and actionable in ensuring proper maintenance of a group’s entities globally. These tools must serve as the glue that brings together relevant, accurate and timely information to in-house lawyers and other stakeholders within the organisation, enabling them to work together.
From a practical standpoint, general counsels and company secretaries of multinational companies must stay on top of different legal workflows globally, especially in ensuring that group entities are in good legal standing in their home jurisdictions. High employee turnover rates and decentralised corporate housekeeping may pose a challenge to capturing and reusing internal legal wisdom.
Most of the entity management systems used by legal departments are useful tools for improving knowledge sharing, but are often merely document depositaries providing static corporate data, failing to capture either empirical legal information or real-time workflows within entities. Being able to monitor and control corporate secretarial workflows, stay on top of rapidly changing legal regulations in order to ensure compliance with statutory obligations globally using a reliable source, builds the basis of an effective knowledge management system in legal departments.
However, best practice KM not only requires internal know-how and expertise, but also seamless integration within a tailor-made infrastructure and technology environment, which is designed to act as a single source of truth and allow key stakeholders to access and utilise collective knowledge.
An Effective KM Framework
An effective knowledge management framework usually evolves over time. Whilst the scope and scale of how KM is focused on varies per organisation, two considerations should always be reviewed for effectiveness – whether the KM function allow teams to have access to timely and practical information, and if the function complements current practice and other available technologies.
To cite our own organisational experience, we have developed a cohesive knowledge bank (KB) that plays a vital role in day-to-day operations. A dedicated team, staffed with a strong balance of knowledge and operational expertise manages the KB, which is in effect, a regularly updated global repository of procedures, standard documents and corporate secretarial know-how in over 160 jurisdictions. It heavily supports the daily corporate housekeeping work for our clients and is vital in ensuring consistent quality and conformity to the law, as well as utilising collective knowledge. In practical terms, KM complements our practice as it allows client service teams to maintain a high-quality benchmark, as well as maintaining efficient turnaround times. Where the technical linkages influence productivity, elements of our KM framework are integrated into our GSGS task management system, the central software utilised for client servicing, which plays an instrumental role in improving the way our multinational clients operate internally, facilitating collaboration between legal and business, being up-to-date with developments globally, ensuring timely execution of decisions and keeping group entities in good legal standing.
In today’s world, where remote working has become the new normal, it is vital that organisations encourage knowledge sharing and invest in solutions that help achieve knowledge management targets and reduce operational costs. A well-developed KM is an essential approach to reducing cost whilst maintaining quality. KM tools deliver value when used frequently by a large group of people within the organisation, require little maintenance and are easy to use. KM also becomes a good benchmarking tool in selecting potential service partners. On the surface, knowledge management reflects good record keeping and information practice. At closer inspection, it reflects a company’s variety of experience, best practice and management strategy.
By Evaldas Skikas, Business Development Manager, Mercator by Citco
Citco GSGS Focus – Winter 2020/2021