‘Value-add’ has become quite a buzzword in knowledge management circles over the past couple of years. There is a good reason for the buzz.
“… high quality legal know-how is taken for granted by clients …”
I have written about the ‘new normal’ landscape extensively at The Vue Post and the effects of the changing global business landscape on the legal industry and legal knowledge management. As high quality legal know-how is taken for granted by clients of top tier firms, pricing and differentiation in service offerings have become the main tools of competitive advantage.
“… when it comes to price competition, some realism must be retained.”
However, when it comes to price competition, some realism must be retained. While legal project management and increased productivity can help firms to restructure their pricing methodologies and offer savings to clients, price competition at the top end of legal services is unsustainable. Perhaps the largest reason for this is that attracting top talent to be able to provide that high quality legal know-how does not come cheap and firms also need to make significant investments in the ongoing training and retention of that talent to be able to maintain the required engagement, productivity and skill levels.
“… firms which can compete by differentiating their service offerings are the ones most likely to find both success and profitability …”
This means that firms which can compete by differentiating their service offerings are the ones most likely to find both success and profitability in the current market.
Admittedly, finding a competitive edge through service differentiation will require some serious strategic planning and a long term view. Service differentiation may take many forms, from the simple and good old fashioned service standard such as returning calls with a certain timeframe to the more complex and modern, say, by offering online portals for delivering selected client specific resources.
“… knowledge management can step in and help adding an extra layer of competitiveness by delivering to clients so called ‘value-add’ offerings.”
And this is where knowledge management can step in and help adding an extra layer of competitiveness by delivering to clients so called ‘value-added’ offerings. These value-adds can be particularly valuable to in-house teams because they often have lesser access to subscription-based legal research tools and resources to start up and maintain their own knowledge management function.
Value-added offerings can take a variety of forms. Over the years I was given many opportunities to assist clients directly, ranging from providing ongoing consultancy on setting up a client-side knowledge management system, to conducting legal research training sessions for in-house teams focusing on publicly available resources. From assisting in-house teams on policy development and submission, to offering on-call legal knowledge support. From managing an industry focused legal blog, to regular legal and knowledge updates to help in-house teams to stay up-to-date on developments.
The good news is that knowledge based value-adds are only limited by your own imagination and they will become not just a selling point when tendering for new jobs, but a valuable retention tool, once you become virtually integrated into the day-to-day operations of your clients’ in-house teams.
Another interesting aspect of knowledge-based value-adds is that often they represent little additional cost for firms, if any, to deliver as generally these functions are already being performed and disseminated by knowledge management internally. However, they can represent a significant benefit to clients by offering savings or covering gaps in their resources.
“Conversation and collaboration are key …”
One of the biggest challenge for knowledge professionals is to ensure that the business development and legal teams actively promote knowledge-based value-added services. Generally, our roles are not inherently external client facing. Consequently, it is important to have buy-in by those who prepare tenders and interact with clients on a day-to-day basis to sell the knowledge-based value-adds on offer.
Conversation and collaboration are key to ensure the establishment and ongoing success of value-add services. You will need to liaise closely with your firm’s relevant teams and the clients you assist, or hope to work with, in order to improve existing offerings and identify client needs to develop new value-added offerings to address both changing and untapped business development opportunities for knowledge-based value-adds.
“… clients are not the only ones who will benefit from value-adds …”
It’s worthy of note that clients are not the only ones who will benefit from value-adds, because in the process of dialogue and collaboration with the client, which underpins to the provision of these services, the firm will develop an intimate knowledge of the client and a better understanding of their business and needs and thus an improved ability to offer timely, relevant and tailored services. This intimate knowledge leads to further competitive advantages for the firm and additional benefits for the client.