The purpose of this paper is to present the results of an empirical study to analyse the impact of the introduction of knowledge management (KM) practices on the financial performance of a multinational law firm and to refine the KM Balanced Scorecard being used by the organisation.
A case study approach was taken using multiple sources of evidence from within the organisation including internal surveys on KM services, performance measures, usage data for KM systems and tools and organisational financial data. Stepwise regression and correlation analyses were used to test causal relationships within the KM Balanced Scorecard.
The most important predictors for financial performance (fee income) are the value perception of KM, quality of counsel and legal opinions, ease of use of know‐how systems, quality of service from the KM team, usage of news and current affairs, personal know‐how exchange with peers, lawyer commitment and KM staffing.
This research was limited to one law firm and used the existing KM Balanced Scorecard for analysis. The results may therefore have limited generalisability to other organisations.
The results have been used within the case study organisation to improve KM services and to improve the ability to measure the impact and return on investment for KM activities.
This research provides empirical evidence for the positive impact of KM on fee income within a law firm.
