In most companies, much institutional knowledge exists within the legal department. Many companies are not large enough to engage a chief knowledge officer, an executive responsible for coordinating knowledge management programs. So, often the functions of a chief knowledge officer reside de facto within legal.
The reasons should be obvious: The members of the legal department have been involved with the company's key corporate transactions, the principal agreements under which the company has acquired or transferred assets, the litigation resulting in rights that have been gained or liabilities that have continued, and the intellectual property-licensing transactions that affect how the company conducts its business. They understand the relationships with third parties with whom the company has conducted business.