The Golden Era of Knowledge Management
We are living through one of the most dynamic periods in the history of legal services. Artificial intelligence is fundamentally changing the way that law firms and lawyers work, and it is doing so faster than many anticipated. What is perhaps less well understood, but equally important, is that this transformation will also change the very nature of the knowledge that lawyers need to access. That knowledge will be different in form, different in structure, and different in purpose. Law firms and knowledge functions who grasp this now and adapt will be the ones that thrive.
Building on What We Already Know
We have written about this area before, and we would strongly encourage you to read our earlier piece, Knowledge Management 3.0 - How to Succeed in a World of AI Knowledge Management 3.0 – How to succeed in a world of AI — Hyperscale Group Limited. In this article, we set out some of the critical questions that law firms should already be asking themselves. To summarise some of the key points:
How will the way that lawyers work change, and what will they need from knowledge functions as a result?
Many AI systems require intellectual know-how to be entered into databases or the tools themselves; is that know-how ready, and does it exist in a usable form?
If lawyers want to construct playbooks leveraging AI, where will the content come from? Are there sample clauses for different purposes, and are the varying positions documented?
Developing successful agents requires pointing AI at small pockets of bespoke knowledge, does this exist, and where should it be stored?
Architecturally, where should knowledge be stored in an era where we have seen large AI platforms emerge, and how do we ensure maximum compatibility with AI?
How will MCP and major document and email management providers benefit the firm? Will this require new taxonomies as file opening and KM taxonomies are often different?
What is the ideal knowledge platform for the future, the DMS, SharePoint, or one of the AI tools themselves?
Where will client knowledge and client deal information be stored, and how will it be accessed by AI?
How will lawyers be trained for faster turnaround times and higher volumes? How can knowledge management help?
What is the role of the PSL or knowledge expert in the design of AI-driven workflows?
What is the future of client-facing knowledge, and how can AI enhance it?
These are not hypothetical questions. They are live issues that every firm needs to be working through right now.
Things Are Moving Faster Than We Thought
What is clear from our ongoing work with firms across the market is that the pace of change is accelerating beyond even the most ambitious forecasts. The window to act is narrowing. This is not a cause for alarm, it is a call to opportunity. The quality of a firm's knowledge is rapidly becoming one of the most critical determinants of its success with AI.
Publisher products have served the legal market well for many years, and we do not dismiss their value albeit their terms currently have constraints on what their content can and can’t be used for. However, the more bespoke, high-quality knowledge that a law firm has developed and curated itself, the more powerfully it will be able to leverage whatever AI tools it is building or adopting. The firms that have invested in their own know-how, their own precedents, their own positions, their own structured guidance, will have a genuine and material competitive advantage.
Five Things Law Firms Need to Address Now
1. Knowledge Management Deserves a Seat at the Top Table
For too long, knowledge management has operated below the radar in many law firms. It has not always received the attention it deserves, and in too many cases firms lack a joined-up strategy. There is often no clear ownership of the knowledge strategy, no meaningful key performance indicators, and, critically, no holistic view of costs. When you add together publisher subscriptions, library costs, PSL salaries, technology licences and more, the total investment is frequently substantial, yet it is rarely presented in one place. This needs to change.
From our work across the market, some common themes emerge repeatedly: decentralized and fragmented structures that have become too complex to manage effectively; a weak precedent posture with inconsistencies in structure, boilerplate and coverage; a reactive rather than proactive approach to knowledge; a lack of client-centric information; and disparate outputs that are uncoordinated across practice groups. These are not criticisms of the individuals involved, they reflect the absence of a strategic framework and the resourcing to improve this.
Knowledge management is an expensive area, and the lack of holistic cost and usage information means that many firms are simply unable to make informed decisions about where to invest and where to rationalise. Now is the time to get that information together, because the decisions ahead are too important to make without it.
2. This Genuinely Could Be the Golden Era for Knowledge Management
Here is the positive message at the heart of this article: knowledge management has the potential to become the defining differentiator between law firms in the AI era. Those firms that get this right will be exceptionally well positioned for success.
Market trends in AI point to increased volume and velocity, and firms that have robust, well-organized, bespoke knowledge will be able to meet that challenge. Those that do not will struggle. From speaking to and working with many firms in this space, we see a real divide emerging. There are knowledge professionals who are stepping up, engaging with AI strategy, and in some cases actively driving implementation. This is enormously encouraging. Others are less engaged. What is vital is that knowledge professionals, just like everyone else across a firm, take this moment to recalibrate. They need to stand back, look honestly at what the firm and its lawyers will need going forward, and rise to meet that challenge.
This also needs to be properly linked between Learning and Development, Innovation and Marketing, it cannot sit in a silo. The growing intermingling of AI and risk responsibilities means that knowledge professionals will increasingly be working across functions in ways that are new and unfamiliar. That is an opportunity, not a problem.
Firms also need to ensure there are proper career paths in place for knowledge professionals and professional support lawyers. If they carry out an increasingly important role this should be recognized.
3. The Role of PSLs Is Being Fundamentally Transformed
We have always believed that professional support lawyers make a hugely valuable contribution. Many PSLs do exceptional work and, despite being pulled in multiple directions, genuinely improve the efficiency and quality of the work that their firms deliver.
However, looking honestly at the challenges ahead, it is clear that some PSLs tend to focus on the work they favour rather than operating within an integrated, prioritized plan. The technological knowledge of PSLs is not always strong, and experience with tools such as managing document automation has demonstrated that this can be a barrier. Some people will be less capable than others at adapting, and it would be naïve to pretend otherwise.
Now is the time for firms to stand back and develop a revised understanding of what the PSL role needs to look like in an AI-driven environment. What does great look like? How does the role intersect with technology, innovation and legal engineering? How do we bring our people to that position? And where that is not possible, how do we recruit the skills that we need? The case for knowledge management paralegals and other new role types also deserves serious consideration. PSLs also need their own AI strategy. How will they produce content going forward? How will they review and quality-assure precedents and playbooks? How will they identify errors and carry out risk management? Will the way they conduct legal research change? These are all valid and urgent questions, and firms that have not yet addressed them are already behind.
4. AI Agent Governance - A Critical New Frontier
We have written separately on AI agent governance AI Agent Governance: Emerging Challenges and Frameworks — Hyperscale Group Limited, and we regard it as one of the most important emerging areas for the legal sector. Professional support lawyers and knowledge professionals have a central role to play in ensuring that agents operate in accordance with the firm's best practice, that they are properly supervised, and that the firm's intellectual know-how is correctly enshrined within them.
The growing technological requirement in this space will not be comfortable for everyone. But the alternative, allowing agents to operate without proper knowledge governance, is not acceptable. This is an area where knowledge functions can, and must, take ownership in so far as it relates to best practice legal outputs
5. A Time to Consult - and to Act
We have carried out numerous knowledge management reviews across the market, and whilst we do not always favour projects with large numbers of interviews, this is an area where stakeholder engagement is absolutely essential, for three reasons.
First, the firm's knowledge strategy is not a peripheral concern; it is central to its future success and success with AI. Second, it is changing rapidly, and any strategy that was developed even twelve months ago may already need revisiting. Third, there are many stakeholders in the firm, and they will all have valid views. Those views need to be collected, understood and reflected in the strategy. Navigating the politics of change in this environment is not straightforward, but it is necessary. Any strategy must meet as many needs as possible if it is to achieve genuine buy-in.
Key questions that should form part of any such review include: do you know who owns the knowledge strategy? Do you know what you are spending per fee earner? What do you see as the role of knowledge management, and how does that change in an AI era? What does good look like, and what metrics do you want to use? What is the AI strategy of the knowledge function? What is the key knowhow needed to get the best out of AI tools?
If your firm has not yet carried out this sort of exercise, we would strongly recommend making it an immediate priority. There are also shorter-term strategic steps that can be taken whilst a fuller review is underway too.
Conclusion - Hope and a Call to Arms
We believe we are entering the golden era of knowledge management. Success in the AI age will require a well-developed KM strategy that everybody in the firm buys into, one that addresses what lawyers will genuinely need, what the AI tools will require, and how proper governance will be maintained.
The firms that get this right will not simply be better at knowledge management. They will be better at everything, because knowledge is the foundation on which effective AI is built.
On a personal note: knowledge professionals make a huge contribution, and often that contribution has gone unrecognized. This moment is an opportunity for that to change. We hope that those who step up, who engage with these new challenges, who recalibrate their roles and rise to meet these new demands, get the recognition they deserve. The golden era of knowledge management is not just possible, for those who seize it, it is within reach.
Hyperscale Group are a Technology, Digital and Operational Advisory and Implementation Business with over 25 years plus deep market experience. We work for In-House teams and Professional Services Firms all around the world and support them developing and implementing their strategies. We help make the right things happen.
Our Experience: Click here - Our Services: Click here - Client Testimonials: Click here
How We Work: Click here
For more information on how we are supporting firms in this area, please contact dereksouthall@hyperscalegroup.com
