Description
Business Intelligence for Law Firms
ZENA APPLEBAUM
Business Intelligence for Law Firms
IN ASSOCIATION WITH PUBLISHED BY
Business Intelligence for Law Firms
is published by Ark Group
UK/EUROPE OFFICE
Ark Conferences Ltd
Paulton House
8 Shepherdess Walk
London N1 7LB
United Kingdom
Tel +44 (0)207 549 2500
Fax +44 (0)20 7324 2373
[email protected]
NORTH AMERICA OFFICE
Ark Group Inc
4408 N. Rockwood Drive
Suite 150
Peoria IL 61614
United States
Tel +1 309 495 2853
Fax +1 309 495 2858
[email protected]
ASIA/PACIFIC OFFICE
Ark Group Australia Pty Ltd
Main Level
83 Walker Street
North Sydney NSW 2060
Australia
Tel +61 1300 550 662
Fax +61 1300 550 663
[email protected]
Online bookshop
www.ark-group.com/bookshop
Editor
Evie Serventi
[email protected]
International reports publisher
Fiona Tucker
[email protected]
UK/Europe marketing enquiries
Robyn Macé
[email protected]
US marketing enquiries
Daniel Smallwood
[email protected]
Asia/Pacific marketing enquiries
Steve Oesterreich
[email protected]
ISBN: 978-1-908640-55-0 (hard copy)
978-1-908640-56-7 (PDF)
Copyright
The copyright of all material appearing within
this publication is reserved by the author and
Ark Conferences 2012. It may not be reproduced,
duplicated or copied by any means without the
prior written consent of the publisher.
ARK2204
3
Chapter 1: Setting the stage
for intelligence
EVERY DECADE and with every new
management book on the best sellers list,
it seems there are new business terms,
ideas and trends penetrating the market.
From ‘blue ocean’ strategies
1
to ‘tipping
points’
2
to ‘creative classes’
3
, it seems
there is always some new technique or
challenge facing businesses that they did
not even know was an issue. Most recently,
the concept of intelligence as a business
discipline has been added to the roster of
administrative departments in professional
services firms as well as in consumer goods
and other industries, whether it is referred
to as business intelligence (BI), competitive
intelligence (CI) or market intelligence (MI).
Intelligence in any form has its roots
in military operations, where armies would
use intelligence they had gathered from
reconnaissance missions to inform their
battle strategy or plan their next tactical
move. Small units of people would gather,
almost secretly, to compare notes, share
experiences and commit little to paper.
Intelligence in those terms is often thought
of as synonymous with spying or corporate
espionage, and is therefore seen as an
unethical and shady practice.
Presumably, though, as intelligence has
become a buzzword of modern business
and entire departments, and professional
associations have been set up to support
the practice, intelligence is very different to
its original military description. Surely, this
is an accepted and encouraged strategic
business discipline. Moreover, if there are
three different designations for the types of
intelligence being collected and analyzed
in companies, there must be a difference
between the three disciplines. There are
several differences, but before this is
discussed it is worth taking a step back and
looking at why it is that intelligence has
become important at this moment in time.
Information overload
It is tempting here to make a popular
music reference to a 1990’s song called
‘Information overload’ by the band Living
Colour, as the current era is an era of
information overload. Once upon a time,
as with military intelligence, a person
could gain the upper hand over his or her
opponent by knowing more, or possibly
even by having more information or access
to information. Today however, with the
internet, smart phones, social media and
apps for everything imaginable, information
is everywhere and accessible all the time to
almost anyone.
If there was a term more overarching
than ubiquitous, it could describe the
amount and frequency with which people
interact with information or data inputs of
some kind or another on a daily, or even
hourly basis. More to the point, information
in mass quantities is accessible to almost
everyone, particularly in the Western world,
whenever it is desired. There are 24-hour
internet cafes, coffee shops and fast food
chains with free Wi-Fi, and even air travel
is not immune from the need for constant
Chapter 1
4
connection to information. People have more
information literally at their fingertips than
many local libraries once had in thousands
of square feet of books.
Having information or data is no longer a
competitive advantage. The glut of messaging
and information available to people could
actually have the reverse effect and prove
to be a disadvantage. Often referred to as
information democracy or dystopia, the glut
of information and what it all means can
overwhelm a business. If information as a
raw input is a disadvantage, then the ability
to turn information into intelligence is an
advantage. Going a step further, the ability
to take that intelligence and turn it into action
is the ultimate business strategy. Modern
day competitive advantage then comes from
the ability to tag, categorize, store, retrieve,
analyze and most obviously use the right data
or information at the right time.
Call it BI, CI or MI, the concept of
capturing useful data, taking it apart and
repurposing it for some competitive or
commercial advantage is the new Holy Grail
of the business world.
What is in a name?
What, then, is the difference between the
various types of intelligence? Is it how the
information is collected, stored or used? Are
different information inputs, research and
analysis methodologies required? Or are all
three intelligences essentially the same thing
with different names?
Business intelligence
Traditional business literature defines BI
as the ability of an organization to take
all its capabilities and convert them into
knowledge, ultimately getting the right
information to the right people, at the
right time via the right channel.
4
More
often than not, BI refers in some ways to
data warehousing and data mining, and
is often software or technology driven.
Frequently, the intended purpose of a
robust BI program is to help a company
determine what it knows, or put differently
to increase efficiencies based on the data
or information that is flowing throughout
the organization. The data, when assessed,
should in some way lend themselves to
process improvements, financial savings,
risk mitigation, determination of excess
expenditure, or point to particular areas of
an organization that are overburdened.
The outputs of traditional BI reporting
are tables and charts with some supporting
narrative that can visually represent large
numbers of data by breaking down those
metrics into manageable chunks. BI is highly
data driven and generally speaking requires
a significant amount of data from which to
make assumptions and draw conclusions.
Loyalty programs at retail outlets, service
providers and chain restaurants are the types
of places that passively collect this type of data
with surveys, credit card swipes and metadata
from online transactions being recorded.
The data that supports BI is often
collected, stored and mined at a specific
moment in time as the impetus for a pricing
decision, a new service offering, a process
improvement project or something similar
that requires looking at a task or series of
tasks over a period of time. The data is
rarely archived, but continues to be included
in future data sets as needed. The larger
the data set, the more accurate or complete
the intelligence can be. For example, large
hotel chains will mine the data collected
at check-in to determine the demographic
data of their guests by age, home address
(the place they are visiting the hotel from),
number of people in the party, activities
booked, special accommodations (such as
technology needs, crib requirements and
Business Intelligence for Law Firms
5
pet-friendly floors), room service selections
and the like. Once patterns are ascertained,
the hotel can create marketing campaigns
targeted to the demographic – age- or
geography-wise – that are most likely to visit.
The hotel can also start to offer new services
that are in line with the BI collected.
BI, with its strong reliance on technology,
often uses dashboards and scorecards for
reporting. A typical dashboard or scorecard
would present with several easy-to-read
pie charts, line graphs and other visually
appealing representations of the data. Since
the data is mostly quantitative in nature,
the visuals make it easy to understand the
story the numbers are trying to tell. A typical
dashboard may have one or more tabs with
different data representations. Figure 1 gives
an example of the type of data that might be
seen represented on a dashboard.
Since BI is heavily numbers-oriented,
the analytical tools used tend to be very
straightforward statistical analyses.
Competitive intelligence
CI, as defined by strategic and competitive
intelligence professionals, is a “systematic
and ethical program for gathering,
analyzing, and managing external
information that can affect you”. The “you”
here refers to any business, association,
partnership or firm. CI is all about
understanding the external information
that can change or alter a business. For
many, the term CI conjures up images of
spies rooting through the rubbish bins of
competitors or stealing information about
what a competitor is doing. There are urban
legends in CI of hotel conference rooms
being monitored, searched and cleaned by
competitors following annual sales meetings
and the like. This, of course, is not the
case. CI is actually a highly ethical practice
that involves gathering information through
publicly-available documents, specifically
tailored primary research, subscription
databases or other morally acceptable
Revenue trend Deals won vs. Lost trend
Employees per department Monthly revenue and expenses
60000
50000
40000
30000
20000
10000
0
2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1
Revenue
Quota
Sales
27%
Accounting
41%
Other
5%
Marketing
14%
Information
technology
8%
Customer
service
5%
80
70
60
50
40
30
20
2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1
Won
Lost
10
0
Revenue
Expenses
80
70
60
50
40
30
20
2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1
10
0
C
A
N
M
i
l
l
i
o
n
s
C
A
N
M
i
l
l
i
o
n
s
Figure 1: Typical business intelligence reporting that may be represented on a dashboard
Chapter 1
6
means and then analyzing it with a set of
analytical tools or methodologies.
The analytical tools used to carry out
CI analysis depend on what a company
hopes to achieve. Often CI analysis will
make use of well-known analysis frameworks
such as SWOT (which stands for strengths,
weaknesses, opportunities, threats), four
corners, historiographic or timeline analysis
or Porter’s five forces analysis. Where CI
is concerned, the analysis framework used
can have as much of an impact on the
information as the information itself. For
example, a timeline analysis can help make
predictions about a product or a product
launch with time-specific implications;
whereas a five forces analysis might provide
a better framework for determining the
effects of a new market entrant.
CI is primarily concerned with anything
that will make an organization more
competitive and able to avoid surprises from
its competition, suppliers and customers or
service users. While many theorists in the
area focus on competitors in a given space,
the most successful CI functions at well-
known organizations, such as Dunkin Brands
and Motorola, are focused not only on
competitors and new market entrants but also
on market trends and the general competitive
market place. Ultimately, CI is about getting
in front of the product or service to provide
clients and consumers with a reason to pick
and stay with the offering despite the choice
offered in a competitive market. CI is forward
looking and requires a vigorous collection,
analysis, dissemination and repeat cycle. To
achieve the best results, CI often requires the
triangulation of source data, both primary
and secondary, as well as the application of
multiple analysis frameworks.
Since CI is heavily dependent on
anecdotal information, as well as primary and
secondary research, the reporting mechanisms
tend to be less technologically and visually
driven and are based more on written reports
and narrative summaries of issues. Reporting,
however, should still be concise and to the
point with a clear call to action.
Market intelligence
MI, the third type of intelligence gaining
momentum in the market place, derives its
genus from the market; in other words MI
is the information relevant to a company’s
markets, gathered and analyzed specifically
for the purpose of accurate and confident
decision-making in determining market
opportunity, market penetration strategy and
market development metrics. MI is therefore
based on market research and is very
focused on market dynamics.
This discipline, unlike BI or CI, is less
concerned with long lead time, huge data
sets or a triangulated approach to analysis.
MI is much more focused, often leading
to a specific marketing campaign, product
development or other project-specific
opportunity. Once the proverbial moment has
passed – since a moment can refer to weeks
or even months – the data supporting MI is
quickly out-dated and new data comes along
to take its place. MI data can be collected
retroactively and collection is likely to fall into
the domain of market research departments.
MI, like BI, will include internal customer
and client data, but will also take its
inputs from macroeconomic or external
market data. MI reporting tends to be a
combination of BI charts and graphs, and
CI narratives. Since MI is often very targeted
and project-specific, the reports tend to
reflect this and will mirror the needs of the
particular assignment.
Intelligence in any form
The intelligence types are decidedly different.
The purpose of each is unique and as
Business Intelligence for Law Firms
7
a result the way in which the supporting
information/data/research is collected is
different. At their root, however, there are
some similarities. Intelligence is always about
forecasting in some way. Information can tell
you what is happening in the present tense.
All a person has to do is pick up today’s
newspaper or read it online to know what
is happening in his or her city or the world
today. Intelligence however, whether BI, MI
or CI, is about forecasting what will be –
based on numbers, anecdotal evidence or
market trends.
Intelligence is about predicting the future
or making necessary changes in the present
to accept the future in an effort to not be
blind-sided by it. All three categories of
intelligence share this one underlying trait.
Table 1 illustrates some of the differences
and similarities between the three different
types of intelligence.
The three types of intelligence can (and
should) inform one another, borrow data
and analysis from each other and work
together to solve business issues. That said,
each of the three is unique and require
different skill sets, collection methods, time
lines and approaches in order to be useful
for the businesses it supports.
Back up and security
Another similarity between all three
intelligence disciplines is the need for
each of the data sets to be backed up
and secured across the network or networks
in which the intelligence practitioner is
working. While it may seem obvious that any
piece of work and data set should always be
backed up, it is particularly important when
dealing with intelligence, some of which
cannot easily be replicated. The data that
flow through an organization are vulnerable
to hacking, power outages (whether
scheduled or otherwise), maintenance
checks, viruses, etc.
It is important to remember that
whatever system of data collection and
analysis is used, a secure back-up system
is always in place. Back up can happen
on the premises, offsite or in the cloud,
but should be a prerequisite to any
intelligence program.
Security is an in-depth topic that
requires discussion in terms of how much
or little security is required and at what
level intelligence data should be protected.
Chapter 9 of this report will explore some
of these concepts in greater detail.
Intelligence in law firms
Knowing the difference between BI, CI
and MI and some of their traditional uses
begs the question: can these disciplines be
successful in law firms? Is there even a role
for these kinds of analysis or do law firms
operate in a different business environment
where they are not applicable? The answer,
of course, is that yes, as a business – and
Type of
intelligence
Time Purpose Focus Collection Analysis Reporting
Business Long
data cycle
Increased
efficiencies
Internal data Passive Software
driven
Graphic
Competitive Forward-
looking
Avoid
surprises
External data Active Manually
driven
Narrative
Market Project-
specific
Market
capture
Internal and
external
Active Combination Combination
Table 1: A comparison of the differences between the three types of intelligence
Chapter 1
8
law firms are businesses – BI, CI and MI
should play a role in the development,
support and execution of strategy.
Specifically, as will be seen, daily tactical
operations, client service, marketing and
strategy can be enhanced through the use
of the intelligences.
Organizations often blur the lines
between the three disciplines, practicing
a hybrid approach to all three. Law firms,
as a result of their reporting and billing
structures, are the perfect storm from a
hybrid approach. For example, sometimes
a practitioner can start with a CI title,
and quickly drop the ‘C’ or ‘competitive’
from his/her title when it is realized that
the function is a combination of all three
intelligence disciplines as a result of the
unique informational needs and data
capabilities of law firms. In Chapter 2
on law firms and their distinctive
challenges, how and why this blurring
of intelligence functions only gets
intensified will be discussed.
Rest assured though, all three
intelligences are being actively pursued in
the legal industry. As the industry increasingly
moves toward perceiving itself as a business,
service providers are recognizing the need
to provide the legal industry with various
intelligence products and services. These
products include data collection software,
data mining software, content creation
software, company databases, client
profiling software, news aggregators, public
and private company information databases,
disclosure document retrieval systems,
cataloguing and meta tagging programs,
portals, dashboards, and all manner of data
analysis software.
There are service providers who can
work with firms to analyze their precedents,
create model documents for increased
efficiency, which is fundamentally a form
of BI, facilitate primary research for CI, or
moderate focus groups for MI. There are
companies offering custom portals and
dashboards to bring all of the intelligence
together on one screen or that can segment
different data types in different ways. There
is almost no end to the quantity and quality
of services and products available to firms in
the area of intelligence.
While one firm may have success
with one suite of products and services,
another firm may find a totally different set
of vendors meet their needs. Whatever the
criteria and whatever the strategy a firm
is looking to support, the one thing that is
clear is that the intelligence functions within
businesses, including law firms, is growing.
This represents a huge shift in the way
business is done and perceived in the law
firm, and this shift is a positive one for firms
and clients alike.
Business intelligence – at the heart
of knowing what one knows
Since there is too much information in the
world in general, this report focuses on the
concept of BI in law firms. It looks at the
myriad of internal data that is available in
law firms. It considers what firms are doing
or should/could be doing to capture and
use this data to their competitive advantage
in order to increase profitability, reduce
overheads and increase efficiencies in
drafting and document storage. This report
will show how this internal data, when
assembled together and analyzed, can help
firms determine what they know to increase
efficiencies and be better firms, client
partners and businesses.
In the next chapter, we will start to sort of
out the difference for law firms and discuss
why now, more than ever, intelligence in all
its forms will be essential to the continued
growth and success of the industry.
Business Intelligence for Law Firms
9
References
Chan Kim, W., Mauborgne, R., 1. Blue Ocean
Strategy: How to Create Uncontested Market
Space and Make the Competition Irrelevant,
Harvard Business School Press, Boston,
Massachusetts, 2005.
Gladwell, M. 2. The Tipping Point: How Little
Things can make a Big Difference, Little
Brown, Boston, Massachusetts, 2000.
Florida, R.L., 3. The Rise of the Creative Class:
And how it’s Transforming Work, Leisure,
Community and Everyday Life, Basic Books,
New York, 2002.
Rud, O., 4. Business Intelligence Success Factors:
Tools for Aligning Your Business in the Global
Economy, Wiley & Sons, Hoboken, 2009.
doc_919810398.pdf
Business Intelligence for Law Firms
ZENA APPLEBAUM
Business Intelligence for Law Firms
IN ASSOCIATION WITH PUBLISHED BY
Business Intelligence for Law Firms
is published by Ark Group
UK/EUROPE OFFICE
Ark Conferences Ltd
Paulton House
8 Shepherdess Walk
London N1 7LB
United Kingdom
Tel +44 (0)207 549 2500
Fax +44 (0)20 7324 2373
[email protected]
NORTH AMERICA OFFICE
Ark Group Inc
4408 N. Rockwood Drive
Suite 150
Peoria IL 61614
United States
Tel +1 309 495 2853
Fax +1 309 495 2858
[email protected]
ASIA/PACIFIC OFFICE
Ark Group Australia Pty Ltd
Main Level
83 Walker Street
North Sydney NSW 2060
Australia
Tel +61 1300 550 662
Fax +61 1300 550 663
[email protected]
Online bookshop
www.ark-group.com/bookshop
Editor
Evie Serventi
[email protected]
International reports publisher
Fiona Tucker
[email protected]
UK/Europe marketing enquiries
Robyn Macé
[email protected]
US marketing enquiries
Daniel Smallwood
[email protected]
Asia/Pacific marketing enquiries
Steve Oesterreich
[email protected]
ISBN: 978-1-908640-55-0 (hard copy)
978-1-908640-56-7 (PDF)
Copyright
The copyright of all material appearing within
this publication is reserved by the author and
Ark Conferences 2012. It may not be reproduced,
duplicated or copied by any means without the
prior written consent of the publisher.
ARK2204
3
Chapter 1: Setting the stage
for intelligence
EVERY DECADE and with every new
management book on the best sellers list,
it seems there are new business terms,
ideas and trends penetrating the market.
From ‘blue ocean’ strategies
1
to ‘tipping
points’
2
to ‘creative classes’
3
, it seems
there is always some new technique or
challenge facing businesses that they did
not even know was an issue. Most recently,
the concept of intelligence as a business
discipline has been added to the roster of
administrative departments in professional
services firms as well as in consumer goods
and other industries, whether it is referred
to as business intelligence (BI), competitive
intelligence (CI) or market intelligence (MI).
Intelligence in any form has its roots
in military operations, where armies would
use intelligence they had gathered from
reconnaissance missions to inform their
battle strategy or plan their next tactical
move. Small units of people would gather,
almost secretly, to compare notes, share
experiences and commit little to paper.
Intelligence in those terms is often thought
of as synonymous with spying or corporate
espionage, and is therefore seen as an
unethical and shady practice.
Presumably, though, as intelligence has
become a buzzword of modern business
and entire departments, and professional
associations have been set up to support
the practice, intelligence is very different to
its original military description. Surely, this
is an accepted and encouraged strategic
business discipline. Moreover, if there are
three different designations for the types of
intelligence being collected and analyzed
in companies, there must be a difference
between the three disciplines. There are
several differences, but before this is
discussed it is worth taking a step back and
looking at why it is that intelligence has
become important at this moment in time.
Information overload
It is tempting here to make a popular
music reference to a 1990’s song called
‘Information overload’ by the band Living
Colour, as the current era is an era of
information overload. Once upon a time,
as with military intelligence, a person
could gain the upper hand over his or her
opponent by knowing more, or possibly
even by having more information or access
to information. Today however, with the
internet, smart phones, social media and
apps for everything imaginable, information
is everywhere and accessible all the time to
almost anyone.
If there was a term more overarching
than ubiquitous, it could describe the
amount and frequency with which people
interact with information or data inputs of
some kind or another on a daily, or even
hourly basis. More to the point, information
in mass quantities is accessible to almost
everyone, particularly in the Western world,
whenever it is desired. There are 24-hour
internet cafes, coffee shops and fast food
chains with free Wi-Fi, and even air travel
is not immune from the need for constant
Chapter 1
4
connection to information. People have more
information literally at their fingertips than
many local libraries once had in thousands
of square feet of books.
Having information or data is no longer a
competitive advantage. The glut of messaging
and information available to people could
actually have the reverse effect and prove
to be a disadvantage. Often referred to as
information democracy or dystopia, the glut
of information and what it all means can
overwhelm a business. If information as a
raw input is a disadvantage, then the ability
to turn information into intelligence is an
advantage. Going a step further, the ability
to take that intelligence and turn it into action
is the ultimate business strategy. Modern
day competitive advantage then comes from
the ability to tag, categorize, store, retrieve,
analyze and most obviously use the right data
or information at the right time.
Call it BI, CI or MI, the concept of
capturing useful data, taking it apart and
repurposing it for some competitive or
commercial advantage is the new Holy Grail
of the business world.
What is in a name?
What, then, is the difference between the
various types of intelligence? Is it how the
information is collected, stored or used? Are
different information inputs, research and
analysis methodologies required? Or are all
three intelligences essentially the same thing
with different names?
Business intelligence
Traditional business literature defines BI
as the ability of an organization to take
all its capabilities and convert them into
knowledge, ultimately getting the right
information to the right people, at the
right time via the right channel.
4
More
often than not, BI refers in some ways to
data warehousing and data mining, and
is often software or technology driven.
Frequently, the intended purpose of a
robust BI program is to help a company
determine what it knows, or put differently
to increase efficiencies based on the data
or information that is flowing throughout
the organization. The data, when assessed,
should in some way lend themselves to
process improvements, financial savings,
risk mitigation, determination of excess
expenditure, or point to particular areas of
an organization that are overburdened.
The outputs of traditional BI reporting
are tables and charts with some supporting
narrative that can visually represent large
numbers of data by breaking down those
metrics into manageable chunks. BI is highly
data driven and generally speaking requires
a significant amount of data from which to
make assumptions and draw conclusions.
Loyalty programs at retail outlets, service
providers and chain restaurants are the types
of places that passively collect this type of data
with surveys, credit card swipes and metadata
from online transactions being recorded.
The data that supports BI is often
collected, stored and mined at a specific
moment in time as the impetus for a pricing
decision, a new service offering, a process
improvement project or something similar
that requires looking at a task or series of
tasks over a period of time. The data is
rarely archived, but continues to be included
in future data sets as needed. The larger
the data set, the more accurate or complete
the intelligence can be. For example, large
hotel chains will mine the data collected
at check-in to determine the demographic
data of their guests by age, home address
(the place they are visiting the hotel from),
number of people in the party, activities
booked, special accommodations (such as
technology needs, crib requirements and
Business Intelligence for Law Firms
5
pet-friendly floors), room service selections
and the like. Once patterns are ascertained,
the hotel can create marketing campaigns
targeted to the demographic – age- or
geography-wise – that are most likely to visit.
The hotel can also start to offer new services
that are in line with the BI collected.
BI, with its strong reliance on technology,
often uses dashboards and scorecards for
reporting. A typical dashboard or scorecard
would present with several easy-to-read
pie charts, line graphs and other visually
appealing representations of the data. Since
the data is mostly quantitative in nature,
the visuals make it easy to understand the
story the numbers are trying to tell. A typical
dashboard may have one or more tabs with
different data representations. Figure 1 gives
an example of the type of data that might be
seen represented on a dashboard.
Since BI is heavily numbers-oriented,
the analytical tools used tend to be very
straightforward statistical analyses.
Competitive intelligence
CI, as defined by strategic and competitive
intelligence professionals, is a “systematic
and ethical program for gathering,
analyzing, and managing external
information that can affect you”. The “you”
here refers to any business, association,
partnership or firm. CI is all about
understanding the external information
that can change or alter a business. For
many, the term CI conjures up images of
spies rooting through the rubbish bins of
competitors or stealing information about
what a competitor is doing. There are urban
legends in CI of hotel conference rooms
being monitored, searched and cleaned by
competitors following annual sales meetings
and the like. This, of course, is not the
case. CI is actually a highly ethical practice
that involves gathering information through
publicly-available documents, specifically
tailored primary research, subscription
databases or other morally acceptable
Revenue trend Deals won vs. Lost trend
Employees per department Monthly revenue and expenses
60000
50000
40000
30000
20000
10000
0
2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1
Revenue
Quota
Sales
27%
Accounting
41%
Other
5%
Marketing
14%
Information
technology
8%
Customer
service
5%
80
70
60
50
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Figure 1: Typical business intelligence reporting that may be represented on a dashboard
Chapter 1
6
means and then analyzing it with a set of
analytical tools or methodologies.
The analytical tools used to carry out
CI analysis depend on what a company
hopes to achieve. Often CI analysis will
make use of well-known analysis frameworks
such as SWOT (which stands for strengths,
weaknesses, opportunities, threats), four
corners, historiographic or timeline analysis
or Porter’s five forces analysis. Where CI
is concerned, the analysis framework used
can have as much of an impact on the
information as the information itself. For
example, a timeline analysis can help make
predictions about a product or a product
launch with time-specific implications;
whereas a five forces analysis might provide
a better framework for determining the
effects of a new market entrant.
CI is primarily concerned with anything
that will make an organization more
competitive and able to avoid surprises from
its competition, suppliers and customers or
service users. While many theorists in the
area focus on competitors in a given space,
the most successful CI functions at well-
known organizations, such as Dunkin Brands
and Motorola, are focused not only on
competitors and new market entrants but also
on market trends and the general competitive
market place. Ultimately, CI is about getting
in front of the product or service to provide
clients and consumers with a reason to pick
and stay with the offering despite the choice
offered in a competitive market. CI is forward
looking and requires a vigorous collection,
analysis, dissemination and repeat cycle. To
achieve the best results, CI often requires the
triangulation of source data, both primary
and secondary, as well as the application of
multiple analysis frameworks.
Since CI is heavily dependent on
anecdotal information, as well as primary and
secondary research, the reporting mechanisms
tend to be less technologically and visually
driven and are based more on written reports
and narrative summaries of issues. Reporting,
however, should still be concise and to the
point with a clear call to action.
Market intelligence
MI, the third type of intelligence gaining
momentum in the market place, derives its
genus from the market; in other words MI
is the information relevant to a company’s
markets, gathered and analyzed specifically
for the purpose of accurate and confident
decision-making in determining market
opportunity, market penetration strategy and
market development metrics. MI is therefore
based on market research and is very
focused on market dynamics.
This discipline, unlike BI or CI, is less
concerned with long lead time, huge data
sets or a triangulated approach to analysis.
MI is much more focused, often leading
to a specific marketing campaign, product
development or other project-specific
opportunity. Once the proverbial moment has
passed – since a moment can refer to weeks
or even months – the data supporting MI is
quickly out-dated and new data comes along
to take its place. MI data can be collected
retroactively and collection is likely to fall into
the domain of market research departments.
MI, like BI, will include internal customer
and client data, but will also take its
inputs from macroeconomic or external
market data. MI reporting tends to be a
combination of BI charts and graphs, and
CI narratives. Since MI is often very targeted
and project-specific, the reports tend to
reflect this and will mirror the needs of the
particular assignment.
Intelligence in any form
The intelligence types are decidedly different.
The purpose of each is unique and as
Business Intelligence for Law Firms
7
a result the way in which the supporting
information/data/research is collected is
different. At their root, however, there are
some similarities. Intelligence is always about
forecasting in some way. Information can tell
you what is happening in the present tense.
All a person has to do is pick up today’s
newspaper or read it online to know what
is happening in his or her city or the world
today. Intelligence however, whether BI, MI
or CI, is about forecasting what will be –
based on numbers, anecdotal evidence or
market trends.
Intelligence is about predicting the future
or making necessary changes in the present
to accept the future in an effort to not be
blind-sided by it. All three categories of
intelligence share this one underlying trait.
Table 1 illustrates some of the differences
and similarities between the three different
types of intelligence.
The three types of intelligence can (and
should) inform one another, borrow data
and analysis from each other and work
together to solve business issues. That said,
each of the three is unique and require
different skill sets, collection methods, time
lines and approaches in order to be useful
for the businesses it supports.
Back up and security
Another similarity between all three
intelligence disciplines is the need for
each of the data sets to be backed up
and secured across the network or networks
in which the intelligence practitioner is
working. While it may seem obvious that any
piece of work and data set should always be
backed up, it is particularly important when
dealing with intelligence, some of which
cannot easily be replicated. The data that
flow through an organization are vulnerable
to hacking, power outages (whether
scheduled or otherwise), maintenance
checks, viruses, etc.
It is important to remember that
whatever system of data collection and
analysis is used, a secure back-up system
is always in place. Back up can happen
on the premises, offsite or in the cloud,
but should be a prerequisite to any
intelligence program.
Security is an in-depth topic that
requires discussion in terms of how much
or little security is required and at what
level intelligence data should be protected.
Chapter 9 of this report will explore some
of these concepts in greater detail.
Intelligence in law firms
Knowing the difference between BI, CI
and MI and some of their traditional uses
begs the question: can these disciplines be
successful in law firms? Is there even a role
for these kinds of analysis or do law firms
operate in a different business environment
where they are not applicable? The answer,
of course, is that yes, as a business – and
Type of
intelligence
Time Purpose Focus Collection Analysis Reporting
Business Long
data cycle
Increased
efficiencies
Internal data Passive Software
driven
Graphic
Competitive Forward-
looking
Avoid
surprises
External data Active Manually
driven
Narrative
Market Project-
specific
Market
capture
Internal and
external
Active Combination Combination
Table 1: A comparison of the differences between the three types of intelligence
Chapter 1
8
law firms are businesses – BI, CI and MI
should play a role in the development,
support and execution of strategy.
Specifically, as will be seen, daily tactical
operations, client service, marketing and
strategy can be enhanced through the use
of the intelligences.
Organizations often blur the lines
between the three disciplines, practicing
a hybrid approach to all three. Law firms,
as a result of their reporting and billing
structures, are the perfect storm from a
hybrid approach. For example, sometimes
a practitioner can start with a CI title,
and quickly drop the ‘C’ or ‘competitive’
from his/her title when it is realized that
the function is a combination of all three
intelligence disciplines as a result of the
unique informational needs and data
capabilities of law firms. In Chapter 2
on law firms and their distinctive
challenges, how and why this blurring
of intelligence functions only gets
intensified will be discussed.
Rest assured though, all three
intelligences are being actively pursued in
the legal industry. As the industry increasingly
moves toward perceiving itself as a business,
service providers are recognizing the need
to provide the legal industry with various
intelligence products and services. These
products include data collection software,
data mining software, content creation
software, company databases, client
profiling software, news aggregators, public
and private company information databases,
disclosure document retrieval systems,
cataloguing and meta tagging programs,
portals, dashboards, and all manner of data
analysis software.
There are service providers who can
work with firms to analyze their precedents,
create model documents for increased
efficiency, which is fundamentally a form
of BI, facilitate primary research for CI, or
moderate focus groups for MI. There are
companies offering custom portals and
dashboards to bring all of the intelligence
together on one screen or that can segment
different data types in different ways. There
is almost no end to the quantity and quality
of services and products available to firms in
the area of intelligence.
While one firm may have success
with one suite of products and services,
another firm may find a totally different set
of vendors meet their needs. Whatever the
criteria and whatever the strategy a firm
is looking to support, the one thing that is
clear is that the intelligence functions within
businesses, including law firms, is growing.
This represents a huge shift in the way
business is done and perceived in the law
firm, and this shift is a positive one for firms
and clients alike.
Business intelligence – at the heart
of knowing what one knows
Since there is too much information in the
world in general, this report focuses on the
concept of BI in law firms. It looks at the
myriad of internal data that is available in
law firms. It considers what firms are doing
or should/could be doing to capture and
use this data to their competitive advantage
in order to increase profitability, reduce
overheads and increase efficiencies in
drafting and document storage. This report
will show how this internal data, when
assembled together and analyzed, can help
firms determine what they know to increase
efficiencies and be better firms, client
partners and businesses.
In the next chapter, we will start to sort of
out the difference for law firms and discuss
why now, more than ever, intelligence in all
its forms will be essential to the continued
growth and success of the industry.
Business Intelligence for Law Firms
9
References
Chan Kim, W., Mauborgne, R., 1. Blue Ocean
Strategy: How to Create Uncontested Market
Space and Make the Competition Irrelevant,
Harvard Business School Press, Boston,
Massachusetts, 2005.
Gladwell, M. 2. The Tipping Point: How Little
Things can make a Big Difference, Little
Brown, Boston, Massachusetts, 2000.
Florida, R.L., 3. The Rise of the Creative Class:
And how it’s Transforming Work, Leisure,
Community and Everyday Life, Basic Books,
New York, 2002.
Rud, O., 4. Business Intelligence Success Factors:
Tools for Aligning Your Business in the Global
Economy, Wiley & Sons, Hoboken, 2009.
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