Never, ever ignore a decision-maker’s psychology

Yesterday afternoon I got lucky.

At 4:01 pm CDT yesterday, after watching Intrade’s gyrations as GOP VP predictive market investors had Romney and Pawlenty positions fighting it out for the lead, I commented on this blog that a decision-maker’s psychology is critical to their decisions:

"I am reflecting on how decisions reflect the decision-maker’s psychology. If you were McCain the Maverick, who would you choose? The market leader or an outsider / outlier surprise?”

This morning’s news that Senator McCain has chosen Alaska Governor Sarah Palin as his running mate in the upcoming Presidential election is a reminder to us all that we ignore a decision-maker’s psychology at our peril.

This reminder is especially important to law firm competitive intelligence professionals who support their firms’ business development efforts. CI professionals working in law firms should be able to develop psychological profiles of prospective clients, particularly those who make the final hiring decision.

And please don’t anybody freak out—developing psychological profiles is a common CI function. Heck, my mother and four sisters do this countless times each day. It’s also how Mrs. Marple solved all those mysteries.

More forecasting with predictive markets?

Earlier this week, I posted about the possible use of predictive markets to develop competitive intelligence, citing InTrade’s and InklingMarkets’ early warnings that Senator Biden would be the Democratic VP nominee. These tools were brought to my attention by Tom Davis at Cygnus Associates

Late last night watching the Democratic Convention, I heard CNN report that the presumptive Republican nominee, Senator John McCain, has settled on his pick for a VP running mate. So I trotted over to Intrade to look at the action on Republican VP front-runners. During the preceding 24 hours, Governor Romney’s stock had fallen $20, from $65 to $45, but had started to crawl up again. His price was almost twice that of the next-highest contender, Tim Pawlenty, who was at $24.20.

This morning at 7:30 a.m. I see that Romney’s stock continued climbing overnight and is now up $13.50 at $58.50. In other words, the market predicts there’s a 58.5% chance he will become the nominee. Since midnight, Pawlenty is down by $2.20 to $22.00.

I’m not sure if this is CI or just political obsession, but stay tuned.

Social Media—in Law Firms and in Life

Although this blog focuses on competitive intelligence, some readers have noticed that the subject of social media (social networks, blogs, listservs, wikis, sharing of photos and video, etc.) has already made a frequent appearance here.

Social media, circa 2008, is a boiling hot topic. A few days ago, Jayne Navarre put up an excellent post over at http://legalwatercooler.blogspot.com about WilmerHale’s four associate blogs. And earlier today the Legal Marketing Association published a report, Humans Seek Connections: The Case for Online Social Networking for law firm marketing and business development.

If you liked the WilmerHale blogs idea, then run, don’t walk, over to www.mashable.com and be inspired by 35+ Examples of Corporate Social Media in Action that are beautifully illustrated by SnapShots. At least half of those examples could be lifted and installed nearly as-is in many law firms to great effect.

For aiding my ongoing education in social media, I thank the team at DuoConsulting, whose links I clicked to discover the 35+ Examples and the following interesting results of the first statistically significant longitudinal study on corporate use of social media conducted by the University of Massachusetts Dartmouth Center for Marketing Research. The study compares the use of social media by Inc. 500 companies and Fortune 500 companies:

• 39% of Inc. 500 companies have blogs, compared to 11.6% of Fortune 500 companies

• In the past year, 20% more Inc. 500 companies started blogging, compared to 3.6% more Fortune 500s

• 44% of Inc. 500s think social media [are] very important to their business/marketing strategy, compared to 25% last year

• Inc. 500s are most familiar with social networking, while wikis have seen the most growth in terms of familiarity

• 77% of Inc. 500 companies report using at least some social media tool

One possible prophecy based on these findings is that because mainline Fortune 500s are slow to adopt social media, corporate law firms that serve them will also be slow on this front. Yet I will wager that even if your grandfather’s law firm hasn’t yet adopted these tools, the law firm of the future (which all Am Law firms will start mimicking in about 45 minutes) is already embracing them. Social media tools, applied intelligently, can help law firms:

• Create legal knowledge
• Develop competitive intelligence
• Assimilate new lawyers
• Strengthen multi-office legal teams
• Build who-does-what-where directories
• Cement client relationships.

Perhaps you wonder why I’m such an evangelist about social media when I’m no expert and still have so much to learn about it. Perhaps it’s because over twelve years ago, while hanging out on an online writers bulletin board, I met the man who is now my husband. For the next two months, while living 700 miles apart, we traded more than 50 personal essays on everything from poetry to gun control to family values. (Today those essays would be called blogs.) Readers who know Del and me know that our decision to marry was one of the best decisions of our lives.

I urge everyone to learn more about social media. Participate in social media. Use your common sense. Teach others. Relax and let what you learn there inform your decisions—whether those decisions are about which friends to spend more time with, whom to do business with, or whom to marry.

Two-thirds of Am Law 200 have CI units

A recent survey of Am Law 200 law firms reveals that nearly two-thirds (64%) of those firms now have CI units, more than I had realized.

The CI units at these firms report to:

Marketing - 59%
Library - 33%
Marketing and the library - 8%

Consistent with surveys I’ve seen over the last three years, this latest information comes to us via Law Firm Inc.’s sixth annual survey of law firm librarians. A couple of cogent articles about the survey findings and librarians’ CI roles appeared recently in that publication, both reported by Alan Cohen:

Survey: CI on the Rise at Firm Libraries
Survey Says Librarians Like Their Jobs but Are Displeased With Vendors

The articles spotlight librarians’ enthusiasm for competitive intelligence work, although their CI role is growing slowly: CI took up 9% in library staff time in 2007 compared to 7% in 2006.

The survey also reports that at those firms responding to the survey the CI group reports to marketing at 38% of the firms, to the library at 21% of the firms, and to both marketing and the library at 5% of the firms. I assume the other 36% of firms responding do not have CI units.

If I interpret these findings correctly, this means approximately two-thirds (64%) of Am Law 200 firms now have some kind of explicit CI unit. That’s more firms than I’d imagined had taken the CI plunge.

As the saying goes, “First quantity, then quality.”

I’ll take that challenge!

Paranoia and law firm CI

I guess it was bound to happen.

In tomorrow’s issue of The National Law Journal you can read a "Special to ..." article called "Competitive Intelligence: What are lawyers' limits?" written by the marketing partner of the Texas law firm Winstead. She proposes that it's time for state bars to start providing regulatory oversight of lawyers' and law firms' competitive intelligence activities.

The article expresses the opinion that lawyers and law firms may not have sufficient judgment, ethics, and morals (yes, morals—read the article) to develop and use competitive intelligence. Don't miss the parts about stalking prospects' children's MySpace pages and Sunday School classes to gain mysterious business development advantages.

Because context is always important, it’s worth noting that the author, who is her firm’s marketing partner, appears to be the only lawyer at her firm who does not permit her photograph to be published on the firm’s Web site.

Now on to the article itself.

The author was apparently motivated to write this article in part after reading a basic CI primer I wrote that was published in the March 2008 issue of the ABA's Law Practice magazine, "How to Create and Use Competitive Intelligence: 45 Tips for Law Firms." What's not clear from the The NLJ author's article is what, if anything, about the 45 Tips piece raised an alarm.

The author comes a bit late to the CI conversation, stating that “At least one vendor offers a software program that compiles legal, financial and business content combined with tools to create informative and tactical reports.” Actually, off the top of my head, I can think of more than 30 vendors providing this kind of content to law firms.

She then urges that lawyers and law firms refrain from using all information that is publicly available to build competitive intelligence, implying it’s not only unsporting, but unethical:

CI research on a target client can be generated legally, yet yield information that a target wants to keep confidential: the value of homesteads or mortgages, payments and standings, criminal history, religious affiliations, school affiliations, civic affiliations, taxes and more. It is a murky area requiring more attention, and many disagree on what is ethical and what is not.

After worrying about the shadiness of those who troll MySpace sites, she goes on to pose one of the oddest key intelligence topics I’ve never thought of before: “Should cancer patients receive letters from estate planners because lawyers can buy wig vendors' client lists?”

To which, after ROTFL, I loudly answer, “Of course not!” I could also pose, as could anyone with a creative streak and time on their hands, about 400 other horrifying, hilarious, and completely bogus red herring key intelligence topics no law firm in the world would ever investigate. I must also admit that I had no idea lawyers could buy wig vendors' client lists.

She then suggests that the new influence of competitive intelligence in law firms may lead to the weakening of lawyers’ moral fiber:

Experts agree it is unethical to misrepresent one's status or position to obtain information. But what about failing to identify yourself in a public place when others around you are talking about a competitor's proprietary information? Is an act of omission (failing to identify yourself) in the gathering of CI unethical? Is taking advantage of someone else's mistake unethical? What about misrepresenting intent versus identity in gathering CI (saying you are conducting a legal industry survey when you are really only interested in gathering CI regarding a particular subject)? These questions highlight the dichotomy between moral conduct and current ethical
standards.

It seems clear to me that the above so-called moral questions have confronted human beings (including lawyers and investment bankers and husbands and wives and lovers) ever since the appearance of the cocktail party. But by mentioning them here, the author seems to suggest that law firm advertising really was the gateway drug that has now led us to these queasy CI crossroads.

The article concludes with a call that “law firms should take the lead” in getting state bar associations to start regulating lawyers' and law firms' CI activities:

Ideally, as they have done with advertising, each state's bar association or other regulatory body should create a code of ethical conduct relating to the generation and use of CI. In the interim, each law firm should consider the creation of its own clear ethical standard or perhaps, at a minimum, require their professionals to join SCIP and adhere to its ethical code.

Undoubtedly, if individual lawyers and law firms are not proactive in this regard, then at some point in the future, the public disclosure of one lawyer's offensive CI research methodology or use will cause the profession to address these issues publicly — but only after the reputation of the legal profession has been damaged once again.

Here, finally, is something I agree with. Anyone who works in a CI position should join SCIP, thereby requiring them to agree to SCIP’s code of ethics. I and many others (thousands of us working in CI, actually) have said and done this for years. And to any law firm that wants to go SCIP one better, I say, Go for it!

But surely getting state bar associations involved to oversee law firms’ CI activities is overkill, to say the least. And even if they did get involved, how would they oversee lawyers’ and law firm employees’ participation and behavior at:

• Facebook and other social networking sites?
• Blogs?
• Parties, restaurants, and ballgames?
• Airports?
• The steps of churches, synagogues, and mosques?

More problematic is the question of who and why and under what circumstances someone would decide to file a competitive intelligence grievance? And what evidence would constitute proof of a CI offense?

At the heart of this article is a fully expressed apprehension about the financial and societal transparency that information aggregators and the Internet now offer anyone with basic research skills. The article also grieves, understandably, at the erosion of privacy some of us who are older (including me) used to enjoy.

But although I appreciate and sympathize with these discomforts, I cannot support the conceit that lawyers and their employees will behave professionally and appropriately only when their good taste, common sense, and morals are even more highly regulated by local state bar associations.

I look forward to everyone’s comments on this one.

Predictive markets = skin in the game

This isn't a political blog. But this past week's deliberations about the VP picks offer us an opportunity to think about how markets and events can be predicted.

(Note that this post is being written before the Democratic vice presidential choice has been officially announced.)

This past Tuesday, August 18, I received an email (as some of you may have also) from Cygnus Associates, a company that designs and deploys "predictive markets for business." The subject line read: Predictive Markets Signaling Biden as Obama VP Pick.

This subject line referred to predictions made by markets like the real-money market at InTrade and the paper money one at InklingMarkets. On Tuesday last, Biden was selling at Intrade just below $50 with volume up sharply on both markets, meaning real bucks were saying there was a 50% chance Biden would be Obama's VP pick.

At the time of this post, it's four days later and just after midnight on Saturday morning, August 23, an hour or so after ABC news reported a Secret Service detail has been sent to cover Senator Biden. His price on Intrade has now risen to almost $99 and to $94 on Inklingmarkets.

In other words, Senator Biden is as close to a sure thing as it's possible to be before the event happens. And there were strong early warnings earlier this week that he was a sure thing.

So how might predictive markets be useful for law firms that want to make better decisions? First, consider that both voting and investing money (whether real or paper) are two ways in which people communicate what they want for their future. Second, voting and investing (betting and re-betting) require individuals to gather, synthesize and distill all the information they have into intelligence. Predictive markets pool that intelligence and perfect the crowd's wisdom.

No one knows for sure what's over the horizon or what the next new thing is. But when we put some of our own skin into a game, we're more likely to participate in important ways that shape the game's outcomes. And that's certainly something every law firm's leaders would like to see all partners do -- participate more.

CI and LinkedIn redux

Last week, the Marketing the Law Firm newsletter published an article called "LinkedIn: A Competitive Intelligence Tool." Because the article was repurposed on law.com it got more coverage than it deserved.

The gist of the article was: "Look at the fascinating competitive intelligence that can be harvested from the information that lawyers display on LinkedIn!"

To which I say: Phooey!

The patterns the author thinks she found (and, for some reason, values) in the LI data she reviewed could have been investigated much more accurately by reviewing law firms' Web sites, Martindale data, and LexisNexis and Thomson info-aggregator tools.

I won't pile on much more, since the article's been appropriately excoriated by Jayne Navarre and others on the Legal Marketing Association's listserv and at The Legal Watercooler, where an anonymous commenter aptly described the article as "CI numerology." What a wonderful term of art that is, and one I plan to borrow.

But more frustrating than the overreaching interpretations in this article is that it continues to confuse law firm readers by suggesting that any of this mess is intelligence. It's not. There's nothing that a firm would or could or should do as a result of discovering any of these patterns she claims to see.

Information strives to answer the question: "So what does this mean?"

Intelligence strives to answer the question: "So what does this mean we should do?"

Time for a law firm CI blog?

For some time I've thought it's time we had a blog on competitive intelligence that serves the business development and growth needs of law firms.

I'm a likely candidate to blog on this topic, since I work in the area of law firm CI. But for years I've thought of myself as an unlikely blogger, with the usual objections:

1. I'm too busy (true)

2. I'm afraid I'll look foolish if I publish something I haven't fully thought through (will surely happen)

3. What if nobody cares (that would surely eliminate concern #2 above)

So how's about I just hang out here and don't tell anybody about this blog until I get the hang of it.

Sounds good. Let's go.