Client service is a timely and relevant topic for today’s law firms of all sizes. We are in an unprecedented competitive environment. Clients are increasingly critical of law firm services, pricing models, costs and quality. The industry is witnessing extraordinary changes, with companies shifting work away from top-tier firms to smaller ones, using legal process outsourcers and keeping more work in-house—all in an effort to control costs. These industry trends are important for all law firms to consider in 2014 and beyond. And they make it crucial for law firms to seek strategies to improve service quality.
CI FOR COMPETITION AND RISK MANAGEMENT
Clients have continuously indicated a willingness to pay premium prices for the highest quality legal services. Quality, as defined by the client, might include a requirement of a firm’s presence in the client’s markets, which can lead to law firms increasing their geographic footprints. Clients have also indicated a need for their business partners and trusted counsel to know and understand their businesses. Numerous high-profile general counsels have cited firms’ failure to understand their clients’ businesses as a principal reason for firing firms, regardless of the tenure of the relationship. This institutional knowledge, or intelligence, can be accomplished with a focused and well-equipped competitive intelligence (CI) platform at your firm.
The challenge for law firms is to look inward, learn from past failures and adapt to the changing legal environment. Many firms have not historically opted to learn and understand their clients’ businesses. This was simply because, before 2008, demand for law firm services at premium prices was continuously expanding. Hourly rates, attorney compensation and, consequently, client bills were all on the rise.
As competition in-creases for the same volume of legal work, client service continues to be a key differentiator among law firms. CI can help firms distinguish themselves from competitors by supporting partner efforts in understanding a client’s company and its competitors, business environment(s), industry, relationships among service providers and more. This knowledge plays an important role in making legal service providers invaluable to clients. A good business partner can use CI to help its clients anticipate what the future might bring and how to best mitigate risk and control costs.
WHAT IS CI?
CI is a professional discipline with a long history in military, government and corporate environments. Its adoption in law firms is a more recent phenomenon. Some visionary firms have employed firm librarians, information professionals, business development professionals and others in the service of CI for a number of years. The last five to 10 years have seen an increase of interest and hiring in this discipline at law firms.
CI is generally defined as any actionable information that can help an entity compete more effectively. This is a very broad definition and can have numerous implications in a law firm environment. Understanding CI can be facilitated by focusing on a few essential elements of CI.
The first element to emphasize is the professional nature of this discipline. Many credentialing programs and professional associations are available to practitioners interested in developing their CI skills.
Another point to emphasize is that CI is a skill that involves some creativity in addition to a solid basis in science. It is a comprehensive platform extending through information environments. CI is involved in the processes leading up to a decision, and is integral in the feedback loop regarding the intelligence work’s applicability and success. CI is constantly evolving.
CI, however, is much more than mere information or data. To be “intelligence,” the information presented must be actionable. In other words, the decision-maker who consumes CI must be able to take that intelligence and use it in some way, even if simply to ask more questions.
HOW DO WE USE CI?
Ultimately, CI should help us decide, how do we succeed in business? One way we can approach this question is a related inquiry, namely, what should we do to improve our client services? Improving client services helps us retain happy clients. By retaining happy clients, we ward off competitors. In a stagnant market, CI can help a firm defend existing client relationships by identifying those relationships most at risk, most profitable or most strategically valuable.
CI can also identify trends among our existing client base. Firm leadership may say, “We have clients in x industry. They like us, and we like the work. It is mutually beneficial, and we can be successful with these types of relationships. What other clients might be similar to these? Which clients could we pursue, and whom would we have to displace to get that work?” Law firm websites go to great lengths to highlight the work a firm does by practice area or industry. Engaging a potential client in a conversation along these lines, based on your detailed knowledge of its business and the challenges it faces, can be critical for effectively competing for new business. CI can help support conversations and identify the right people with whom to engage.
SAMPLE CI ACTIVITIES
CI can also help a firm retain clients by providing day-to-day services to support business development, firm strategy, risk analysis and much more. By refocusing efforts on becoming more client service-oriented, a strategic goal for intelligence efforts can be established. Then, a CI platform can be designed to achieve that goal. Some examples of those broad service areas include:
- Risk. Is this “great” client really that great? If not, why not? These same questions might apply to a lateral candidate.
- Expansion. Do our clients want us to be in that market or service area? If so, which ones? Once we are in that market, how can we immediately begin to serve our clients?
- Marketing. What is our real work and experience, versus what we think it is, and how do we best present that information in the marketplace to attract the clients and laterals that we most want?
CI can support daily client service in a number of ways, including specific tasks:
- Market intelligence. Monitoring your clients’ industries, markets and competitors can help develop a deeper understanding of the company’s daily business issues or predict possible risks for your clients’ operations. Market intelligence can be useful in identifying larger economic, political, geographic and technological trends. Intelligence may also be gathered on other legal service providers. In this way, the firm can identify and anticipate its competitors’ market activities and determine how best to position its services to the client relative to other providers.
- Support of client-topical research for new legal issues or trends. An important service to many clients is a firm’s thought leadership on emerging legal issues. CI can support the identification and presentation of these new topics as a service to clients.
- Preparation for client interviews. CI can support attorneys in preparing for discussions with a client regarding an opportunity or threat that the client may currently face. This typically takes the form of a briefing on the company, its industry, the law firm’s past and current relationships with that company, key decision-makers, common relationships, current staffing by other service providers and any specific insight into current legal needs by that company. This briefing may take the form of a written memo with a supporting research file. It may also include a verbal presentation by the analyst to the meeting team.
- Research into personnel and parties for new matters. Clients might turn to trusted legal advisors in determining whether a transaction or proceeding is worth initiating. CI can provide financials, business history, industry news or rumors and other context that might assist that client in determining whether to initiate a matter.
- Relationship mapping and referral analysis. Many legal advisors and their clients have mutually beneficial relationships. A firm or attorney’s ability to connect key decision-makers with investors, financiers, consultants or other service providers can be critical to the client’s success. CI can help identify these relationships through previous matters, commonly held relationships, past referrals into or out of the firm and other internal and external network analysis.
REQUIREMENTS FOR CI SUCCESS
CI is being adopted rapidly by law firms of all sizes but can vary widely in its positioning, operations and staffing. Regardless of the staffing model chosen, access to practice and firm leadership is essential in the adoption and development of any firm’s CI platform. Establishing a knowledgeable and effective champion for CI among firm leadership can be very effective in ensuring the success of any such program.
One final critical element of CI is avoiding unethical practices. The Strategic and Competitive Intelligence Professionals association has adopted a Code of Ethics with helpful FAQs to help illustrate the ethical use of CI.
Firms of any size need to remain focused on improving client service in every possible way. A robust CI platform can be an integral component of this client service and relationship development.