“We live on planet Earth!” declared the 4-year-old, boasting to my son about his new knowledge of the solar system. The boys were waiting with their class as the parents signed them out of preschool for the day. “No! We live at home!” my son responded righteously. He was a year younger and not yet burdened with planetary learning. “No! We live on planet Earth!” the other boy insisted more loudly. “No, no! We live at home!” my son shouted. This escalated until my wife and the other boy's mother had to break up the shouting match. Lawyers and technology professionals can find themselves in the same situation as those two boys. When the two groups sit down to design and build the technology piece of a know-how sharing project, a funny thing happens. Both sides appear to speak English, yet they couldn't be further apart in the way to approach the problem than if they spoke different languages and came from alien cultures.

If Keith could look ahead two years, this is what he'd see as he reflects on his efforts to upgrade the commercial real estate group's practice. Overall, he is extremely satisfied. The acceptance of new lateral partners has been excellent and the effort to obtain more premium work has been a resounding success. The group's reputation among commercial real estate clients has correspondingly improved. The uptraining of existing partners allowed the group to take on premium work brought in by the new lateral partners and other successful business-getters at a much faster rate than if the work were handled by only the laterals and a few star partners.

Having addressed partner buy-in, Larry turns his attention to gaining associate support. The most important aspects of the associate training are attendance and assimilation of the material. The mid-level and senior associates are the main audience, yet they are subject to the greatest pressures to put client work first. Accountability for training attendance and participation, and support from the partners, are the key ways to address attendance. Larry's key steps are ...

Keith had previously convinced Jeff, the head of the commercial real estate practice group, that Jeff was not the right person to run the initiative. The other candidates are Larry, the senior partner and mentor in the commercial real estate group, and Bob, the rising star partner expected by many to succeed Jeff some day as head of the group. Keith has decided that Larry is the right person to lead the effort. Larry won't feel threatened by the arrival of new lateral partners, as the younger Bob might. Larry is also naturally more of an organizer and teacher, making him a better match for the required tasks.

This is a four-part post. In this Part 1, we will see how Keith gets the right people to run the profitability initiatives. In Part 2, we will see how the leaders of the initiatives get the rest of the practice group to play ball. In Part 3, we will see how a collaboration between the practice group and the IT Dept. can work. In Part 4, we will look back after two years to see what worked and what didn't. We will also summarize some of the principles that lead to success. Having decided to move forward with his plans to capture premium work and to move associates more quickly up the work food chain, Keith Mayfield, chairman of an AmLaw 100 firm, considers how to make these plans happen. Moving associates up the work food chain will affect the entire firm. Capturing premium work is intended only for some practice groups.

The question left at the end of Part 1 was whether the investments of partner time in training and of associate time in attending training would offset the benefit of increased associate leverage. Applying the basic law firm economic model to the general training example is instructive. Let's assume: A quarter of the firm's partners shift 2 hours/week of billable time to training, forms, mentoring and tools-building. All the firm's associates shift 1 hour every other week of billable time to attending training. As a result of this partner effort, associates take on 10% of partner billable time, but require 50% more time to accomplish what a partner could have done. New billable work is available and the partners use their extra time (that is, the time freed up by the associates' taking on some partner work) to take on new work. The firm hires additional associates to satisfy the need for associates to take on 10% of partner work and to handle the additional work taken on by partners with their 10% available time. Using the model, these changes result in profits per equity partner improving by 4.6%. Clients also see a 2.2% decline in fees. This kind of improvement obviously does not happen overnight. Most likely a few practice groups will initiate the effort. Others will follow in response to the proper direction and incentives from management and inspiration from the successful groups.

It is Spring 2012 and preliminary 2011 financial results for more than half the AmLaw 100 have been published. Keith Mayfield, chairman of the AmLaw 100 firm introduced in my first post, somberly reviews these results in his office one evening when the phones have finally quieted. While revenues and profits per partner are up at many firms, they are down at many others. Keith wonders how many of those increases in profits per partner were engineered through gimmickry, such as de-equitizing partners. More significantly, at the firms he considers peers, the numbers show a disquieting trend: Revenues are up slightly, but expenses are up more. Profits per equity partner, the litmus test for partner morale, are down several percentage points. Unfortunately, these averages accurately presage his firm's results, which haven't yet been published. Keith concludes that external forces, mainly client fee pressures amidst increased competition, are responsible for these trends. He wonders what his firm can do to turn this profit squeeze around before the situation becomes precarious. He is well aware that even a solvent firm can collapse quickly if its partners lose confidence in the firm's future and its leadership.

What is low-hanging fruit in the context of practice management? These are practice changes that are relatively easy to institute, but bring high value to the firm. They are a great place to start generating good word-of-mouth before undertaking more ambitious initiatives. Three examples of low-hanging fruit in the knowledge strategy arena are: Interconnect existing data collections, which allows lawyers to pinpoint practice-relevant documents and can improve lawyer staffing on matters, Create a subject matter view for each practice group's intranet page, and Create a searchable database of the firm's legal opinions. These changes are easy because they require minimal input from broad groups of lawyers, and no changes to the way lawyers work. I'll explain below the high value that each brings.

Knowledge strategy is an old subject, but underdeveloped at most firms, even at those with Knowledge Departments and Chief Knowledge Officers. Knowledge is what lawyers know about their past work, what they know about their clients, what they know about their business and what they know about the competition. The challenge is how to capture and share this knowledge. Examples of ways to share knowledge are listed later in this post. The key to sharing knowledge is to understand the special personality traits of lawyers, and to establish an approach that addresses, or even embraces, those traits. As you know from leading your firm, lawyers are: skeptical, autonomous, averse to change, focused – to the exclusion of all else – on getting the client work done, yet very interested in learning new things. Psychological studies have confirmed that lawyers do, in fact, differ in these ways from the general business population. As in the case of any significant law firm initiative, know-how sharing requires an approach that takes these personality traits into account and, ideally, harnesses them in support of the new initiative.

Keith Mayfield, the chairman of an AmLaw 100 firm, is doing some long-range planning one Sunday morning in his home office. It's the only time he can really think. As he considers various strategies to maintain profitability – and even improve it – in the face of increasing competition and client fee pressures, he realizes how alone he is. As a lateral partner who's been at the firm over 20 years, he is close, both professionally and personally, to many of his partners. Some are members of his management committee. Yet often he feels he's the only person who thinks about the firm as a business; the only one who thinks about all the external forces affecting the firm. He can see so clearly the changes the firm needs to make; why can't the others? To be sure, some of his partners do look at what's going on outside the firm. But they generally focus only on new business issues, such as what a competing firm is doing to win one of their valued clients; how to win a new client from another firm; or a new practice area to enter. Many of his partners are truly brilliant. All are hard-working. Yet they are focused – almost to the exclusion of all else – on getting the client work done. After that, they may think about getting new work. They don't think about business models, organizational issues, the trend towards commoditization of legal work, client perceptions of value and other basic management concepts.