Jeffrey Carr, the general counsel of FMC Technologies, is part of a new breed of in-house attorney. Carr is bold, innovative and determined to structure alternative fee agreements with his company's outside counsel that reward results, not time.
For firms, the message from clients like Carr is loud and clear: change the way you market and deliver legal services, or risk losing business to more cutting edge firms.
And marketing departments at leading firms are listening. With heated competition and demanding clients like Carr, law firm marketers have had no choice but to become increasingly sophisticated in the way they help their firms win new business and grow existing relationships.
As a result, many of today’s marketers justify and maximize the value of each marketing dollar spent, and spend a majority of their time and money on targeted initiatives (such as a specific industry or area of practice) that have a higher likelihood of success than those that require firm-wide adoption and delivery. This is a far cry from yesteryear when such initiatives took a back seat to brochures and holiday cards.
At the center of this wave is the increased focus on the collection, organization and use of "competitive intelligence" — one of the new frontiers in firm marketing. With detailed intelligence about clients, executives, competitors and markets at their disposal, leading marketers and client development professionals can use competitive intelligence techniques to turn actionable intelligence into intelligent action.
According to the Society of Competitive Intelligence Professionals, competitive intelligence is "the process of enhancing marketplace competitiveness through a greater — yet unequivocally ethical — understanding of a firm’s competitors and the competitive environment."
Applied to the to the legal profession, competitive intelligence means gaining a better understanding of a firm’s competitors and staying abreast of information about the firm’s clients, prospects, trends and issues affecting selected markets in which the firm wishes to grow. When competitive intelligence is combined with direct client interaction and internal firm information from contact management and time and billing systems, for example, a vivid picture of the competitive landscape and key clients and prospects begins to emerge.
Of course, the ultimate barometer of its value is its ability to produce a meaningful affect on the firm’s bottom line. Research shows that companies with well-established competitive intelligence programs enjoy greater financial success than companies in the same industry without such programs. In the corporate world, a PricewaterhouseCoopers survey found that chief executive officers who rated competitor information as being either "very" or "critically" important grew revenues by 14.2 percent, versus 11.8 percent for all others — a 20 percent advantage.
Significantly, those placing a premium on competitor information are outperforming their peers not only on sustained revenue growth, but also on gross margins and a number of other key performance measures.
There are eight major steps to incorporating competitive intelligence techniques into the client development process.
- Determine the firm’s market objectives based on an assessment of its strengths, weaknesses and current client portfolio.
- Ascertain the client development goals, such as securing new clients, cross selling services to existing clients or seeking out merger partners.
- Identify target prospects and clients.
- Conduct research into the needs and issues affecting those companies or industries.
- Identify existing outside counsel for those targets and determine the firm's best chances for unseating them.
- Develop a strategy for pursuing the target organizations.
- Initiate a dialogue with the target contacts and secure engagements.
- Follow up with clients and position the firm for future
work.
This precise formula may not apply to all firms. Some generate client leads with large-scale communications efforts, others succeed by simply nurturing personal relationships between rainmakers in the firm and company in-house counsel. Most firms, however, will be able to profit from incorporating most, if not all, of these steps into their client development strategy.
All firms could use competitive intelligence techniques to determine which other firms represent a company that it is interested in representing. After identifying the company, firms should ascertain the number of years the target client has worked with that other firm, because a long term, established relationship may be hard to break and perhaps not worth the firm's time and money.
However, if the competitive intelligence research uncovers an emerging pattern of sub-par results from outside counsel or indicates that the target client has recently brought on other new counsel, that information might suggest the company is open to initiating new relationships with firms.
Competitive intelligence can help improve relations with existing clients. Firms often mistakenly believe that they have a lock on their client’s business, when, in fact, they don’t. Competitive intelligence tools can help firms uncover their true "client share" of a specific company’s legal work.
Competitive intelligence techniques can also achieve the following marketing goals:
- Bring in new clients. Competitive intelligence helps firm marketers identify prospective clients by litigation activity, merger and acquisition trends, geographical market, practice areas and other key criteria. Such techniques may help the firm by identifying areas of needed improvements, such as recruitment, a firm or practice group acquisition or targeted referral networking.
- Enhanced proposal and pitch process. Competitive intelligence can provide useful background information when preparing for critical client meetings, help firms develop more "client-focused" proposals and offer insights into how to assemble the most appropriate legal team for an effective client pitch.
- Strategic planning and assessment of opportunities by market and practice area. Competitive intelligence can provide firm marketers with a detailed market analysis, help them identify practice area trends by jurisdiction and measure the market performance of firm branch offices.
- Provide useful client information to share throughout the firm. Competitive intelligence data can become powerful information when strategic profiles regarding the legal needs of individual clients are gathered and disseminated through e-mail distribution and on a firm intranet.
- Promote more informed marketing decisions. Competitive intelligence can also be used to help marketers align their client development budgets with the most promising new business opportunities, thereby enabling them to make more informed decisions about how to allocate finite marketing resources.
Firm marketers ready to use competitive intelligence to maximize their firm’s client development efforts will find a range of new electronic tools that can help simplify the process of gathering, analyzing and reporting data. Some of these tools capture and review data from publicly available information sources (such as firm Web sites and other marketing literature, corporate legal department disclosures, etc.), while others rely on data culled from sophisticated online databases that track court filings, regulatory declarations and biographical profiles of attorneys in private and corporate practice.
However, firms will often find that little more is needed than an intelligent marketing professional armed with a telephone.
David Goehl, a former practicing attorney, is Senior Director of Client Development and Marketing for LexisNexis Martindale-Hubbell. He can be reached at (908) 790-2128 or david.goehl@martindale.com.
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