Gear Up for Competitive Intelligence 2.0 Eight ways to step up your firm's CI game — and prevent
The legal sector is becoming increasingly complex, requiring law firms to expand the scope of competitive intelligent efforts in their marketing and business development departments.
According to the LexisNexis InterAction 2018 Law Firm Marketing and Business Development Survey Report, competition looked to be stiffer in 2018 than in prior years, with firms experiencing pressure from peer firms, larger firms and internal legal departments. (See “Survey Reveals Disturbing Undercurrent of the New Normal .”)
One survey respondent put it this way:
“Marketing and business development leaders must be much more innovative. Must understand that firm administrative officers can generate relationships and work … (They) must work with client experience officers in helping the firm differentiate itself through consistent delivery and marketing of a distinctive client experience.”
The legal industry is experiencing significant structural changes as well. Just this month, EY announced it is acquiring the U.K. alternative legal services provider Riverview Law, giving the advisory behemoth both a managed legal services business model and the technology platform that supports the service.
The influence of groups such as the Corporate Legal Operations Consortium (CLOC) is undeniable. The agenda of their annual meeting, which attracts thousands of in-house legal managers and the law firms and technology companies that want their business, reads like a “how-to” manual to reduce outside legal spend and find efficient ways to manage legal projects.
So, how can you improve your competitive intelligence game in such a dynamic environment? Here are some suggestions.
1. Broaden the Scope of Your Competitive Intelligence Efforts
Look beyond your traditional competitors and consider what companies might be threats in the future, and what can you learn from them. For example, in April Valorem Law Group joined forces with the alternative services provider Elevate to form ElevateNext. This new law company allows Valorem to provide legal services for those tasks that require a lawyer, while “attorney-not-required” work will be provided by Elevate. This collaborative partnership resulted in a contract with client Univar, which will reduce legal spend by 50 percent.
Do partnerships like ElevateNext pose a threat or opportunity to your firm? If not today, how about tomorrow?
2. Watch How Technology Is Being Used to Find Cost-Effective Client Solutions
Recently, I heard a story from a lawyer in the cybersecurity space. Her business model was to provide legal cybersecurity audits to companies to identify their preparedness for an attack. The audits were a “break-even” proposition for her firm, intended to build a relationship with the client. Her group made some money on audits, but the real money came in when a client that had developed a relationship with the firm through an audit experienced “an incident.” Responding to an incident could mean significantly more in legal fees. Last year, however, an industry organization started offering online risk-assessment audits. For free. Not only did this lawyer see her audit business disappear, her entire relationship-building model was endangered.
So, in your competitive intelligence efforts, make sure you have a grip on how current and emerging technology might affect your business models, and consider what you can do to prevent being blind-sided.
3. Use Human Intelligence to Better Understand Market Dynamics
There is only so much you can learn from online resources. Get someone who is good at listening out of the office and meeting with legal tech executives, alternative legal services providers, venture capital investors, CLOC members and, most importantly, clients. Your human intelligence (HumInt) asset’s goal is to understand what problems clients are facing and where they are looking for solutions. For example, your HumInt professionals will likely become experts in understanding how clients are looking to automation (and AI) to reduce the need for costly outside law firms.
4. Leverage Marketing Activities and Firm Events to Gain Intel on Client Preferences
Consider integrating surveys into firm-hosted conferences and events to gather information on changing client preferences, buying behavior and trends. Use that data to consider new services. Share your research results with clients when appropriate. (Everyone likes to know what other people are thinking, and to understand trends in their industry.) Compare your results with content analytics, web info and data from JD Supra and Mondaq to develop a broader understanding of clients’ preferences and needs. Use this data to segment your market and to develop market personas.
5. Get Closer with Clients and Potential Clients
Consider hosting strategy sessions with your clients. Form a client advisory panel that meets quarterly with law firm leaders to discuss how clients are changing how they evaluate, select and manage outside counsel. Use these sessions to better understand the challenges facing legal operations managers. Think of how you can be part of the solution rather than being left out in the cold.
6. Use Legal Process Improvement and Legal Design Thinking to Identify Ways to Innovate
Recently I co-facilitated a Legal Lean Sigma Yellow Belt program for a law firm and its top clients. The clients loved the opportunity to learn a new management tool and the lawyers got a chance to “see inside the brains” of their clients. Together they mapped critical processes, brainstormed ways to improve, and developed ways to find new efficiencies. Clients are looking to law firms to lead process improvement and innovation. And, by doing so, firms strengthen their relationships with clients.
7. Invest in R&D
Identify a way you can differentiate your practice by solving a problem in a unique way that provides high value to a client. This may start out as a legal design thinking project, or an idea that comes out of a client advisory panel. It could be an app that helps with government compliance, or an automation of a legal process, or integration of an alternative legal services provider into a legal process that drives down cost and speeds up delivery. Find a solution that resonates with your clients and promote the service as a market innovation.
8. How Best to Spend Your CI Budget?
Hire a HumInt asset. Call her a client service representative or client experience specialist, or a strategic corporate spy. Doesn’t matter. Her job is to meet with clients, potential clients, industry experts, legal technologists, alternative legal services providers, CLOC members, vendors and competitors. She will collect information and compare and combine it with traditional competitive intelligence sources.
Then, she will translate the information into actionable intelligence and insights that will drive new legal service and business development offerings that might look like:
Events, webinars and blog posts that focus on a specific client-focused issue or problem.
New services, such as a risk audit, advisory services, preventive actions, automated services or new service delivery and pricing models.
New partnerships that will be beneficial to the client (think ElevateNext).
Competitive intelligence, without actionable insights, is only information. Get the best value from your intelligence investment by making sure it results in doing things better, and by providing more value to your clients.