Technology in Marketing: Competitive Intelligence in Law Firms

The most common bit of CI done in professional service firms is the one-off report. In its simplest form, it may be a pre-packaged report from a vendor, such as one of the various litigation reports available or a Dun & Bradstreet report for a smaller company. These tend to give a narrowly focused, one-dimensional view of a client, market or industry, based on a specific practice area and in response to a business opportunity. They are reactive and can be classified more as information (informative in nature) than intelligence (a catalyst).

At their most complex, one-off reports are templated and include data from multiple sources. Intelligence pertaining to several practice areas, time periods, and subjects has been included as it relates to a specific inquiry. The most important element of these richer reports is the analysis: A research professional has responded to a question by collating and analyzing research derived from various sources and paradigms to support a conclusion. Competitive intelligence ' intelligence concerning competitors ' has been combined with business intelligence ' firm-internal information, such as financial data ' to give a holistic picture of the industry, market, client, firm, competitors and their interrelationship. The report is the summation of the answer to the research question, and is intended to motivate its audience to act. To this end, an executive summary usually includes recommendations for strategies and tactics.

Another common CI function in law firms is using the intranet as a platform for disseminating information and intelligence, especially to key clients. Some go so far as to authenticate users; a user profile will automatically determine what information is presented on the page. In this way, the technology ensures the right information reaches the right people and thus solves the problem of widely broadcasting sensitive data.

Most pages consist of:

• Client/industry/market report;
• Analyst reports;
• SEC filings, including 10Ks, 10Qs, and pertinent 8Ks;
• Patents (if applicable) and trademark information;
• RSS feeds for: press releases, news items, blog posts;
• Legal department biographies;
• Links: Client Web site, competitor law firms, and competitor attorneys' biographies; and
• Business intelligence: Fee and practice group information, client team roster and biographies

Some also include wikis, or user-edited content displayed according to subject. When updated regularly, wikis are an excellent way to capture internal knowledge.

Problems with Current CI Efforts

Reports and intranet pages are highly valuable and represent an excellent beginning to a competitive intelligence function. However, the information and intelligence presented through these vehicles has several major pitfalls. First, the information becomes dated quickly. For one thing, companies can change radically in less than a quarter, and, unfortunately, quarterly earnings are not always accurate. Secondly, the information is static. Limited information can be displayed on an intranet page, so that historical information must be archived regularly. The information represents a snapshot, rather than a deep understanding of a client/market/industry. Third, the information cannot truly be considered intelligence unless a human has analyzed it and pulled out the salient bits. Resources would have to be realigned in order to provide analysis across the firm's revenue board. Finally, the resources required to continually refresh the data are substantial and costly. The richer the information sources, the more time it takes to collect, sort, and collate, and synthesize data.

A more sophisticated approach to the CI process, and one that answers these shortcomings, is to use the products of CI ' the reports and information presented on the intranet page ' as a process. CI is often discussed as either a product or a process; but rarely is it looked at as both simultaneously. Through the creation of a database, it can be.

Early Warning Systems

Dr. Benjamin Gilad, a noted leader in the CI field, has written and spoken extensively on the subject of strategic early warning systems in his book, Early Warning (2004). When used primarily as a risk-management tool, it is more applicable to products-oriented corporations than law firms. However, a strategic early warning system would serve the CI needs of law firms very well, when customized to look at threats and opportunities.

An EWOS, or Early Warning/ Opportunity System, is a database of all information gathered and products created within the CI function. The beauty of an EWOS is that, while it certainly includes information on clients, markets, and industries, it is built around business indicators. Because business indicators affect clients, industries, and markets, the EWOS is better able to provide dynamic intelligence that will show histories, highlight changes and trends, and, over time, predict trends and changes.

A robust EWOS would involve:

1. Formulating broad and deep questions key to profitability and competitive advantage;
2. Determining the information and intelligence necessary to answer those questions;
3. Allocating the resources to collect, collate, and analyze that information, and
4. Employing technology to store, manipulate and mine, and report on the intelligence gathered.

Formulating the Questions Key to Profitability and Competitive Advantage

Profitability and competitive advantage should be defined broadly and include elements of both threats and opportunities. As an illustration, take a look at a public company's risk factors (in its 10K). Each of these items represents a scenario or issue that could negatively affect their earnings. Those stated by key clients, industry gurus, and economic analyses of markets (including geographic markets) should be included along with indicators that will alert key CI practitioners that trends may be emerging.

For example, one issue affecting law firms today is diversity. Ten years ago, the issue was not on the radar of any law firm professional ' marketer, CEO, or partner, despite the fact that most Fortune 500 corporations had already had supplier diversity programs in place for many years. Still, no one thought it would affect the choice of outside counsel. However, had supplier policies been considered a business indicator and monitored accordingly, the EWOS would have highlighted the growing importance of a diverse workforce. A savvy law firm would have been able to address the issue as an opportunity much earlier.

Determining the Information And Intelligence

There is a lot of information out there. Determining the right information and intelligence will make or break the EWOS. At a baseline, the information typically found on an intranet page should be included. Where possible, the information in each document should be broken down into data elements that can be referenced individually and cross-referenced across the EWOS. For example, a key client's 10K should be included as a complete document. The individual sections ' such as risk factors ' should also be itemized and included as separate items.

A Note on Technology and Resources

An EWOS database does not have to be expensive to create or administer. The technology department will certainly have opinions on the correct software and structure of the database, while departments such as marketing and finance will provide valuable insight into the contents. The more (relevant) information stored in the EWOS, the better, yet, that does not have to translate into breaking the CI budget. Once the data elements have been determined, consider off-shoring the data collection and input. Firms such as Baker & McKenzie and Deloitte & Touche have centers in the Philippines and India, respectively. Following their lead and engaging an off-shoring company that specializes in data collection can be a reasonable and cost-efficient strategy. With the use of a little PERL programming, RSS feeds, and offshore data entry specialists, information gathering becomes a piece of cake ' a really cheap piece of cake.

Shannon Sankstone is the Marketing Research Analyst at Quarles & Brady, where she is responsible for the marketing and competitive intelligence research function. She can be reached at [email protected] or at 312-715-5251.

Editor's Note: This month we are privileged to have a guest columnist, Shannon Sankstone of Quarles & Brady. Shannon's article builds upon the presentation she will be making at the Competitive Intelligence for Law Firms Conference on April 8 with the American Conference Institute. The link to the conference is: www.americanconference.com/law_firm/CI.htm. Joshua Fruchter's column will appear in the May issue followed by Nancy Manzo's column in June.

Gathering intelligence on competitors, industries, and marketplaces is becoming increasingly popular in law firms. Intelligence is being used to support and guide business development efforts, while market research has long been a cornerstone of marketing. Yet, few firms evaluate the long-term growth of competitive intelligence (CI) in firm business development, and even fewer have sought to build systematically on current efforts to create an intelligence function that can predict opportunities. This article seeks to illustrate how a law firm can build a robust intelligence function ' gathering both competitive and business intelligence ' that will provide the greatest strategic benefit over the short and long terms.

The One-Off Report

The most common bit of CI done in professional service firms is the one-off report. In its simplest form, it may be a pre-packaged report from a vendor, such as one of the various litigation reports available or a Dun & Bradstreet report for a smaller company. These tend to give a narrowly focused, one-dimensional view of a client, market or industry, based on a specific practice area and in response to a business opportunity. They are reactive and can be classified more as information (informative in nature) than intelligence (a catalyst).

At their most complex, one-off reports are templated and include data from multiple sources. Intelligence pertaining to several practice areas, time periods, and subjects has been included as it relates to a specific inquiry. The most important element of these richer reports is the analysis: A research professional has responded to a question by collating and analyzing research derived from various sources and paradigms to support a conclusion. Competitive intelligence ' intelligence concerning competitors ' has been combined with business intelligence ' firm-internal information, such as financial data ' to give a holistic picture of the industry, market, client, firm, competitors and their interrelationship. The report is the summation of the answer to the research question, and is intended to motivate its audience to act. To this end, an executive summary usually includes recommendations for strategies and tactics.

Another common CI function in law firms is using the intranet as a platform for disseminating information and intelligence, especially to key clients. Some go so far as to authenticate users; a user profile will automatically determine what information is presented on the page. In this way, the technology ensures the right information reaches the right people and thus solves the problem of widely broadcasting sensitive data.

Most pages consist of:

• Client/industry/market report;
• Analyst reports;
• SEC filings, including 10Ks, 10Qs, and pertinent 8Ks;
• Patents (if applicable) and trademark information;
• RSS feeds for: press releases, news items, blog posts;
• Legal department biographies;
• Links: Client Web site, competitor law firms, and competitor attorneys' biographies; and
• Business intelligence: Fee and practice group information, client team roster and biographies

Some also include wikis, or user-edited content displayed according to subject. When updated regularly, wikis are an excellent way to capture internal knowledge.

Problems with Current CI Efforts

Reports and intranet pages are highly valuable and represent an excellent beginning to a competitive intelligence function. However, the information and intelligence presented through these vehicles has several major pitfalls. First, the information becomes dated quickly. For one thing, companies can change radically in less than a quarter, and, unfortunately, quarterly earnings are not always accurate. Secondly, the information is static. Limited information can be displayed on an intranet page, so that historical information must be archived regularly. The information represents a snapshot, rather than a deep understanding of a client/market/industry. Third, the information cannot truly be considered intelligence unless a human has analyzed it and pulled out the salient bits. Resources would have to be realigned in order to provide analysis across the firm's revenue board. Finally, the resources required to continually refresh the data are substantial and costly. The richer the information sources, the more time it takes to collect, sort, and collate, and synthesize data.

A more sophisticated approach to the CI process, and one that answers these shortcomings, is to use the products of CI ' the reports and information presented on the intranet page ' as a process. CI is often discussed as either a product or a process; but rarely is it looked at as both simultaneously. Through the creation of a database, it can be.

Early Warning Systems

Dr. Benjamin Gilad, a noted leader in the CI field, has written and spoken extensively on the subject of strategic early warning systems in his book, Early Warning (2004). When used primarily as a risk-management tool, it is more applicable to products-oriented corporations than law firms. However, a strategic early warning system would serve the CI needs of law firms very well, when customized to look at threats and opportunities.

An EWOS, or Early Warning/ Opportunity System, is a database of all information gathered and products created within the CI function. The beauty of an EWOS is that, while it certainly includes information on clients, markets, and industries, it is built around business indicators. Because business indicators affect clients, industries, and markets, the EWOS is better able to provide dynamic intelligence that will show histories, highlight changes and trends, and, over time, predict trends and changes.

A robust EWOS would involve:

1. Formulating broad and deep questions key to profitability and competitive advantage;
2. Determining the information and intelligence necessary to answer those questions;
3. Allocating the resources to collect, collate, and analyze that information, and
4. Employing technology to store, manipulate and mine, and report on the intelligence gathered.

Formulating the Questions Key to Profitability and Competitive Advantage

Profitability and competitive advantage should be defined broadly and include elements of both threats and opportunities. As an illustration, take a look at a public company's risk factors (in its 10K). Each of these items represents a scenario or issue that could negatively affect their earnings. Those stated by key clients, industry gurus, and economic analyses of markets (including geographic markets) should be included along with indicators that will alert key CI practitioners that trends may be emerging.

For example, one issue affecting law firms today is diversity. Ten years ago, the issue was not on the radar of any law firm professional ' marketer, CEO, or partner, despite the fact that most Fortune 500 corporations had already had supplier diversity programs in place for many years. Still, no one thought it would affect the choice of outside counsel. However, had supplier policies been considered a business indicator and monitored accordingly, the EWOS would have highlighted the growing importance of a diverse workforce. A savvy law firm would have been able to address the issue as an opportunity much earlier.

Determining the Information And Intelligence

There is a lot of information out there. Determining the right information and intelligence will make or break the EWOS. At a baseline, the information typically found on an intranet page should be included. Where possible, the information in each document should be broken down into data elements that can be referenced individually and cross-referenced across the EWOS. For example, a key client's 10K should be included as a complete document. The individual sections ' such as risk factors ' should also be itemized and included as separate items.

A Note on Technology and Resources

An EWOS database does not have to be expensive to create or administer. The technology department will certainly have opinions on the correct software and structure of the database, while departments such as marketing and finance will provide valuable insight into the contents. The more (relevant) information stored in the EWOS, the better, yet, that does not have to translate into breaking the CI budget. Once the data elements have been determined, consider off-shoring the data collection and input. Firms such as Baker & McKenzie and Deloitte & Touche have centers in the Philippines and India, respectively. Following their lead and engaging an off-shoring company that specializes in data collection can be a reasonable and cost-efficient strategy. With the use of a little PERL programming, RSS feeds, and offshore data entry specialists, information gathering becomes a piece of cake ' a really cheap piece of cake.

Shannon Sankstone is the Marketing Research Analyst at Quarles & Brady, where she is responsible for the marketing and competitive intelligence research function. She can be reached at [email protected] or at 312-715-5251.