Last summer, we embarked on a joint project with Marcie Shunk at the Tilt Institute to create a benchmark for how law firms are using competitive intelligence today and capture best practice.
One of the key findings was that leaders rate their CI functions at 6.4 out of 10 in terms of their ability to help firms make more informed decisions. Don’t mistake this for evidence of poor performance – in fact, it reveals the nascent stage at which most CI functions are seen to be.
While eight in 10 firms have at least one role dedicated to CI, just over half actually have a formal CI function. The rest have their CI resources spread across library, marketing and BD with dotted reporting lines and no centralized budget – these typically had lower effectiveness scores.
There was no doubt that CI teams are working hard in fact the almost unmeetable demand from lawyers for support on pitches and client meetings was seen as an indication of success in bringing awareness to the function but this belies a greater need for education around how to use CI.
This high volume, low impact activity is tactical and reactive in nature and is getting in the way of the CI team’s ability to prove its worth when it comes to strategic planning. The most valued – and presently rare – quality of CI professionals was the ability to connect the dots. In other words, draw out the So What from the reams of data they collect.
The most effective CI teams demonstrate this quality and share other characteristics. They have a formal, centralized CI function with professional CI qualified skills. They are engaged in more strategic activities and are proactively supporting the firm in ways they identify as value-add.
Firms with the most effective CI teams are outpacing competitors in terms of financial growth (the most common measure of success for the firms we surveyed) and in terms of brand growth over time (less common but more externally focused measure of success). It is incredibly hard to shift the brand needle in the US market which is one of the most brand dense legal markets of all and it is unlikely that CI alone has achieved brand growth for these firms, no matter how effective. What it does show is a propensity among these firms to investigate, use data to inform planning, align brand strategy with from strategy and above all to not be complacent.
The benefits of an effective and strategic CI function are clear as are the barriers. The greatest challenge to CI teams is they don’t have the capacity to meet demand and there is still work to do in bringing lawyers around the firm up to speed with how CI can benefit their strategy. Silos prevent communication and real cultural change required to put data at the heart of strategic planning.
Leaders are responsible for setting culture and encouraging data-based decision making – here are our key success factors:
- Communication is critical – break silos and engage CI in dialogue about the broader issue you are trying to solve, don’t just request an isolated piece of data as that is all you will get.
- Data quality – make sure your data is clean and your sources are reliable. Any reputable data provider will be transparent and answer your questions.
- Upskill your analytical team – library and competitive intelligence are not the same thing – invest in the latter.
- Build a culture in which decisions are based on data.
Above all, set the example from the top – leadership matters.