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Intelligent Competition

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Two years ago, Ann Lee Gibson picked a certain Washington, D.C., law firm as the weakest link in that legal market. She does so every year with the big legal markets around the country.

Gibson applied her own metrics to the firm’s numbers in a legal publication’s listings of the highest grossing law firms. They looked good, but she saw a pattern over several years: Earnings were stuck at the same level, which would cause internal friction among the lawyers. And one of the firm’s biggest practice areas, telecom, was way down and falling.

Sure enough, now the firm has lost a sizable number of lawyers and reportedly is in play for splitting, merging or whatever it can salvage.

Gibson is a business development consultant for law firms–she’s tallied $400 million and counting in new business for her clients over the past seven years. Based in West Plains, Mo., and a very frequent flier, she worked previously as a marketer inside two California based law firms, Gibson, Dunn & Crutcher and before that Nossaman Guthner Knox & Elliott.

“I reported the D.C. weakest link to my clients two years ago, and I can’t and won’t say what they did with the information,” Gibson says. “But you can assume they looked at who that firm’s clients are and at some of the firm’s lawyers. The bottom line is–and this is a very capitalistic comment–if you can take really weak organizations out of the marketplace, the whole marketplace strengthens.”

Thus she does not hesitate to use the word “predatory” in describing one of the increasingly used ways of getting new business.

What sets Gibson apart is her use of a combination of tools and techniques that over the past couple of decades have become common in big corporations and only more recently moved into the legal marketplace. She is the acknowledged guru of competitive intelligence, or CI, for law firms.

Many law firm leaders have heard the term competitive intelligence by now, but probably few of them understand fully what it means. In a recent online survey of law firms, legal market researcher Mark Greene says he found that, “Almost all said they knew what CI is, but when we asked questions to see how familiar they were with it, we got very middling results. The term is just starting to get currency in the legal market, and you won’t get great agreement on what it is.”

Action Analysis

Here’s a try. CI is not so much about internal information on the law firm, but rather external information, analyzed and expressed in a way to determine action concerning the marketplace, competitors, clients and potential clients.

CI works best when it is both systematic and a matter of routine. Some uses include:

• Cherry picking other firms’ lawyers or their clients.

• Determining with a bit more certainty whether to open a new office.

• Positioning your firm best in a beauty contest, or knowing when not to bother.

• Pricing services in certain situations.

• Building dossiers on in house lawyers, so detailed as to include hobbies and service on charitable boards, to better know how to deal with them.

• Helping clients limit the amount of CI being done on themselves.

There are a vast number of tools for getting information for review and analysis in CI, and most of them are publicly available and in electronic databases, both premium and free. For example:

• Law firm Web sites, which often are generous with information. The Internet has a function that archives earlier versions of Web sites, which is good for tracking comings and goings and other patterns.

• Biographical databases and court records. They may be used for developing strategic profiles of parties in litigation and the lawyers themselves.

• Current and old organizational charts. They help determine how and perhaps why a competitor or potential client has grown or cut back.

• Online discussion groups, job postings and resumé postings. Mining them can reveal information.

• Archives of news releases. These can contain nuggets of valuable information and may reveal useful patterns concerning law firms, clients and potential clients.

One of the many famous things said by General Electric’s former chairman Jack Welch concerned what CI is all about: “If I can’t measure it, I can’t manage it.” That measurement is based not just on data itself, but also on analysis that reveals congruences and patterns.

Greene, the law marketing researcher who is managing director of The Brand Research Company in Washington, D.C., believes the use of CI “is growing within law firms and will become a more and more useful management tool.”

Atlanta’s Kilpatrick Stockton was one of the first law firms to adopt this more thorough and systematic approach. Five years ago, the firm tapped one of its librarians, Donna F. Cavallini, to become its manager of competitive knowledge and move a step beyond the usual research done by librarians.

“It was kind of a bet I got the firm to take,” says Martin R. Tilson Jr., who was the firm’s marketing partner when he suggested the move. “She’s able to put a filter on the information she looks at for us, and she’s been with the firm long enough to know what we’re looking for, which is not a 300 page document to sift through.”

Cavallini, who made the job virtual and left Atlanta first for Colorado and now Oregon, researches the industries in which the law firm’s clients operate, keeping close tabs on the clients’ competitors. When an RFP comes along, she digs into the industry, the company, its management and issues.

“She really enjoys the detective assignments,” Tilson says.

While Cavallini has a law degree and came out of the library, law firms developing CI functions are mostly doing so through their marketing departments. And those shops vary widely among law firms as far as status and tasks are concerned. One law firm’s marketing director might still be putting name cards at luncheon place settings, while another’s might be out on the streets aggressively pursuing business.

“One barrier to doing CI is that sometimes there’s a disconnect between the people gathering and analyzing the information and their ability to communicate it effectively in the firm,” says Suzanne Donnels, who recently became chief marketing officer with San Francisco based Allen Matkins Leck Gamble & Mallory. Donnels had worked previously in marketing for two other large California law firms and more recently as a consultant doing CI reports for law firms.

“You have to be able to connect with partners and build consensus support,” she says. “Only a few marketers have this status and a seat at the table with executive committees.”

From the Top

Gibson, the law firm CI guru, believes the chief operating officers or executive directors should be heading the effort–but they also need to change their ways. The COOs tend to be former CFOs, she says, and they usually are more concerned with internal information, especially numbers.

“They love things like CitiBank benchmarks and are not trained in CI, not even as informal students of it,” Gibson says. “But there are things people gravitate to when the market gets really competitive, which it is, and CI is the natural next step for us.” Gibson began gravitating to CI when she left Gibson Dunn and set out as a business development consultant. She had already been using a lot of CI approaches over the years without knowing they could be bundled and systematized for nearly all decision making for a law firm.

Because there is so much confusion about the term CI, she is given to defining it in part by what it is not. CI is not a recipe book. It cannot predict the future.

“At this point, the conversation among law firms is fairly basic when the CI is good, and fairly fuzzy when it’s bad,” Gibson says. “The corporate world is much more experienced at this.”

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