Marcie Borgal Shunk

Law firms are thirsty for data that could make them more competitive, but few are using it for proactive, strategic planning, a new survey has found.

Just 8 percent of firms believe their competitive intelligence functions are highly effective, according to a report released Wednesday by legal market intelligence provider Acritas and The Tilt Institute, a strategic consulting firm. The findings were compiled from interviews with 123 individuals at 85 law firms, including Global 100 and Am Law 200 firms.

“Increasingly, law firms are tuning into the concept of data-driven decision-making,” said Elizabeth Duffy, a vice president at Acritas. But “it’s one of those areas that is, as our results have shown, in many incidences described as nascent as a function.”

Elizabeth Duffy.
The report found that 80 percent of law firms consider their competitive intelligence (CI) departments to be more reactive than proactive, meaning they’re more often responding to requests from lawyers and other departments. And 61 percent say their CI teams are more tactical than strategic, meaning they spend most of their time on day-to-day business development tasks rather than long-term planning.

Law firms seem to know they need to improve their competitive intelligence abilities. Survey respondents gave their CI function a low average score for effectiveness, and more than three-quarters of law firms surveyed said they plan to make changes to CI in the next year.

“Outside the legal industry, competitive intelligence is very much a part of the decision-making at the executive and leadership level,” said Marcie Borgal Shunk, founder of the Tilt Insititute. “I was most pleased to see… that there’s a clear acknowledgement that the CI functions have a ways to go, and that there is an opportunity to invest.”

Law firm CI teams should be accessing information from both within and outside their firms, Borgal Shunk said—something they’re just beginning to do. And CI teams should be integrated with the rest of the firm’s functions, she said.

But those teams also tend to be quite small, Duffy said, so they are already stretched thin when reacting to routine requests.

The survey found 38 percent of law firms have a formal CI function, while 14 percent have other full-time employees working on CI in addition to a formal CI role. But 47 percent of firms have no formalized CI function at all.

Just 5 percent of firms said CI professionals are contained in their strategy departments. The vast majority, 71 percent, said CI employees are in their business development or marketing departments, and 39 percent include them in library services. Another 6 percent of firms have CI professionals in their information technology departments.

In defining competitive intelligence, law firms’ focus on business development was clear, with 70 percent including understanding clients and prospects in their definition. They are also interested in their competitors, as nearly half of firms included analysis of peer firms in their CI definition, in terms of clients and markets served.

The report also found a connection between having effective CI functions and employing a trained CI professional. That person “could be a businessperson or a lawyer, but they have a trained CI background,” said Borgal Shunk.

Duffy said the ability to work across departments, including with lawyers, is key to that role, in addition to the analytical abilities. That requires lawyers, firm leaders and other departments to meet in the middle, she said, and be open to collaboration. Law firms have seen that happen in other departments like marketing and business development, she noted, so they could do the same for CI teams.

Centralizing CI teams and creating a clear reporting structure is the next step in getting those professionals involved in strategic planning, Borgal Shunk said. From there, they should be integrated with strategic planning teams, she said, and firm leadership should make a point of seeking out data from CI before making major decisions.

Clients may not see the inner workings behind those decisions, Duffy said, but they will notice the results. When functioning properly, she said, CI “can really make a difference in tailoring a pitch to a client.”

“There’s an expectation that the law firms they work with are more data savvy,” Duffy said. “It’s the norm at this point.”