Focus on competitive intelligence's use to filter or reduce noise.
If done right, competitive intelligence (CI) is a powerful competency. In this three-part series, we are discussing the three pillars of a successful CI strategy. Previously, we shared the first and second pillars on defining the right scope and hiring the right people, respectively. In part three, we are tackling using CI to correctly extract value.
Many law firms pay large sums of money to subscribe to databases and legal news from a few vendors. However, no human can actually process or use all the information bombarding lawyers or their marketers.
If you focus on the intelligence’s use, you can find ways to filter or reduce noise. That alone can free resources for more value-driving strategies, such as higher salaries to marketing staff to attract real warriors and/or offer better coffee in the morning.
In the future, artificial intelligence (AI) will filter noise based on pattern of actual use; looking at use rather than hoarding of information is at the core of deep learning by AI. Until then, vendors send an ocean of irrelevant items just to be on the safe side. If we apply the famous Pareto Principle, 80 percent of the value comes from 20 percent of the information distributed inside a law firm. The rest is “good to know” research.
You know what is very good to know? The big developments that can wreak havoc on or open up opportunities for your law firm. Let me suggest just two areas to focus on when filtering competitive intelligence (CI) information:
- Strategic risk analysis for clients, and
- Early warning system for the law firm itself.
Strategic Risk Analysis for Clients
The big accounting firms have been pushing into legal services for over two decades with an integrated model of accounting, business expertise and legal network. A few law firms attempted to expand into consulting, but it has been a small, hesitant step.
If law firms would like to counter the Big Four push into global law, they should develop their industry risk analysis as core strength. Then, they need to find a differentiated strategy.
This can be forward-looking strategic risks and opportunities presented by trends in regulations, or it can be scenarios involving emerging areas of IP “wars,” foreign markets entry and/or geopolitical changes. Law firms have a stronger grip on geopolitical change-drivers than typical marketing/accounting firms because lawyers are involved in legislatures all over the world. If they want to be in the strategic advisory game, they need a more sophisticated CI capability.
Early Warning System for the Law Firm Itself
Advanced early warning systems in corporations look out for early signs of risk and opportunities before these are obvious to everyone.
The strategic risks and opportunities for law firms today have little to do with direct competition. They have to do with alternatives to the traditional law firm’s model. From automated standard work, to outsourcing, to fixed price alternative to billable hours, to lower-cost competition, to the potential for AI to take away much of the legal “grunt” work (and billable hours), the people who will bear the brunt of these changes will be the new-to-legal associates. It is the younger associates who should strive for better CI, because disruption in the form of profitability-reducing alternative models will only spread in the coming decades.
I am certain smart law partners discuss strategic risks and opportunities at every opportunity they get. The risk is that they don’t get too many of these opportunities. Clever plays-on-words or sad reality? You decide.
The 2018 LMA Competitive Intelligence Certificate (CIC) program this November will teach legal marketers how to extract the most value out of CI information. In New York City, attendees will gain hands-on, tailored education by the world’s leading CI experts. Templates, tools and real-world applications will help you execute exceptional CI strategy within your firm. Register today!
Ben Gilad, Ph.D., is a cofounder and president of the FGH-Academy of Competitive Intelligence, a former strategy professor at Rutgers University and the author of Business War Games, Early Warning and Business Blindspots.