Law firms learn how to compete

There's a new buzzword making the rounds of law firms these days: competitive intelligence.

Sometimes called corporate spying, opposition research, or simply market analysis, the term refers to marketplace knowledge that can be used to make business decisions.

Competitive intelligence has long been commonplace in corporate America, in the form of monitoring industry trends, collecting client feedback, conducting market research, and using similar tactics to enhance business.

But only recently has it been adopted by law firms, which for much of their history were spared the intense competitive pressures faced by many other industries.

``It's only in the past 15 years, give or take, that law firms have really started to have to compete with each other for work," said Jasmine Trillos-Decarie, president of the New England chapter of the Legal Marketing Association, which recently hosted a seminar in Boston on competitive intelligence.

``It used to be that in-house counsel would pick up the phone and call a friend, and that's how work came in," said Trillos-Decarie, who is also director of marketing for the law firm Goodwin Procter LLP, which has offices in Boston, Los Angeles, New York, San Francisco, and Washington, D.C . ``Or you always worked with one company, so you always got that work. But the nature of the business has changed dramatically, and we're being expected to compete more. . . . Competitive intelligence analysis can help us understand how to do that."

For lawyers, that analysis might mean understanding how an upcoming merger of law firms could change the competitive landscape, how an anticipated regulatory change could affect business, when a practice area is ripe for expansion, or whether the arrival of a national law firm poses a threat. Without that knowledge, a law firm could overlook a promising opportunity to merge or lose a lucrative client to a rival firm.

These are tactical considerations that sound basic to many business people and perhaps even obvious. But some law firms have been known to make strategic decisions based on little more than intuition, gut instinct, or such ill-considered factors as opening a new office based on the desire of a single client, expanding overseas because a rival has done so, or allowing a bigger-is-better mentality to drive a decision to merge.

``A lot of law firms are just large fiefdoms, and they're not run like true companies," said Leonard M. Fuld, founder of Fuld & Co., a Cambridge firm that specializes in competitive intelligence. ``They don't look too far down the road. The partners want to protect their own information. There's not a lot of sharing that goes on. And the corporate good isn't always what's viewed as best.

``But law firms are no longer protected in their own little Shangri-La," said Fuld, who spoke at this month's competitive intelligence seminar, where he ran a war game that taught law firm marketers to analyze the strengths and weaknesses of a rival firm. ``They're like any other industry undergoing change, and they need a better way of developing intelligence."

Competitive intelligence has gained a higher profile among lawyers due to market trends that are ratcheting up competition in the legal industry, such as an increasing number of attorneys nationwide, a proliferation of law firm mergers, and budget-conscious companies that are reducing the number of law firms they hire, generating bidding contests among suitors.

``We're definitely seeing a strong trend, as law firms are looking at a new approach in terms of how they do business," said Alexander T. Graham, executive director of the Society of Competitive Intelligence Professionals, based in Alexandria, Va. ``They're not waiting for clients to come to them, as they used to, but thinking about how can they better service the clients they have and better work with future clients. And part of that is understanding the competitive landscape."

Graham and others reject descriptions of competitive intelligence as ``corporate spying."

``It's an ethical and legal gathering of information about competitors," Graham said. ``It is not espionage."

``Spying implies illicit and illegal, and it's not that at all -- it's 180 degrees opposite of that," Fuld added. ``You acquire information, and you analyze it. But you analyze it in a timely manner, and you come up with answers that may not be what you expect."

Competitive intelligence has also earned greater prominence as law firms come to terms with the reality that they are businesses and must act like businesses, which means understanding their competition and finding ways to stand out in an increasingly crowded field.

``Law firms are more and more trying to govern themselves and behave like their clients and like corporations, so this is all part of that trend," said Brian T. Smith, director of marketing for the law firm Day, Berry & Howard LLP, which has offices in Boston, New York, and four Connecticut cities .

``To a client, one big law firm looks much the same as every other -- all our websites look the same and all our brochures look the same -- so we're all struggling with how to differentiate ourselves in the marketplace," Smith said. ``Competitive intelligence has to do with being smarter about where you look for business and how you go about doing that. And as marketers and business development people in law firms, that's really our goal: to help our lawyers do just that."

Sacha Pfeiffer can be reached at pfeiffer@globe.com.