Relationship Intelligence as a Strategic Asset

January 1, 2002

The business of law has evolved tremendously in the past decade. Previously, starting a legal practice simply entailed hanging out a shingle and waiting for clients to walk in the door. If a lawyer did exemplary work, word of mouth would spread and the practice would grow. In years past, stringent regulation by professional bodies would prevent outside organisations from competing with traditional law firms. Old-fashioned notions of loyalty meant that clients rarely changed law firms except when substandard work-product was delivered. And lawyers traditionally stayed with their firms for life, minimising the destabilising effect of attrition.

But the legal industry is now big business. Extensive mergers and acquisitions have resulted in the legal equivalent of corporate conglomerates, allowing firms of all sizes to enjoy a global reach. Marketing increasingly plays a strategic role in building a firm’s reputation and clientele. The rise of multi-disciplinary practices and the erosion of barriers to entry in the legal profession means that law firms now must compete with business entities previously barred from practicing law. And a diminishing sense of loyalty coupled with increased client sophistication means that firms must focus more intently than ever on service to retain clients and attract new business.

Amidst this dazzling change, law firms are rising to the task, modernising their approaches on everything from management and culture to marketing and service delivery. Nowhere is this transformation more apparent than in information technology (IT), where it seems that everything that can possibly be automated already has been. Well almost everything.

Until recently there remained one critical aspect of law practice that succeeded in evading the forces of modernisation: Relationship Intelligence.

Relationship Intelligence: The Whole is Greater Than the Sum of its Parts

What is Relationship Intelligence? And why has it taken technology providers so long to offer an automated solution to deliver it?

Relationship Intelligence is a law firm’s internal, proprietary information that helps lawyers leverage who and what they know in order to uncover new business opportunities, differentiate themselves from the competition and enhance client service. It represents your firm’s collective knowledge about people, companies, relationships, experience and expertise – aggregated into a centralised system, managed and then delivered to users wherever they are, whenever they need it, in whatever format they prefer.

Relationship Intelligence content provides users with a bird’s-eye, 360-degree view of the critical relationships that comprise the fundamental revenue source for any law firm. Until recently, it has been virtually impossible for any law firm to leverage Relationship Intelligence. The reason is quite simple. It consists of data housed in many systems – and even in the heads of lawyers. It is derived from hundreds and thousands of separate interactions between firm members and their clients, colleagues, coworkers and other contacts. Examples of where core data comprising Relationship Intelligence resides include:

  • Practice management systems (Elite, CMS)
  • Document management systems (iManage, PC Docs)
  • Client Relationship Management systems (InterAction)
  • Contact managers (Outlook, Lotus Notes, Groupwise)
  • Home grown systems and external database sources (Access, Excel)
  • Human resources software (Peoplesoft)
  • Tacit data from the heads of individual fee earners

In its simple form, this scattered data is useless to the majority of fee earners who don’t have the time, knowledge, patience or inclination to access it from these myriad sources and paste it together to address business needs. To be effective, this information must be aggregated, managed, synthesised and delivered to professionals in the proper context in order to be recognisable as Relationship Intelligence – relationship information in context.

Once created from scattered data, Relationship Intelligence offers firms an entirely new context in which to generate revenues, enhance client service and impact the bottom line. Indeed, the opportunities it exposes prove that, taken as a whole, Relationship Intelligence is greater than the sum of its parts.

The Relationship Intelligence Payback

What are the concrete, real-world benefits that a firm can expect to enjoy by implementing an application capable of delivering Relationship Intelligence? They are both strategic and tactical. Rather than trying to explain these benefits theoretically, the chart provides examples of how other firms have derived these benefits to date.

Benefit Category

Benefit Description


Strategic – Revenue Generation:

Increasing Client Wins

Clients are won when new business opportunities are identified and individual relationships are successfully leveraged to that end. Relationship Intelligence helps identify relationships that can be crucial in the pursuit of new matters.

A fee earner meets a prospective client at a fundraiser. A quick look-up in the Relationship Intelligence system reveals that a colleague used to work at the prospect’s company and knows the management team well. The fee earner leverages that relationship to secure the engagement.

Strategic – Revenue Generation:

Cross-Marketing Services

Cross-marketing additional services to existing clients can only be successful when client information is shared across different practice areas. Relationship Intelligence helps provide the necessary transparency to firm members seeking new opportunities within the client base.

A fee earner specialising in mergers and acquisitions wants to expand his practice. A quick review of the firm’s Relationship Intelligence reveals that two existing clients that currently use the firm as their legal tax advisers are contemplating entering into mergers with outside entities. The fee earner works through the existing tax counsel channels to cross-market additional M&A services.

Strategic – Revenue Generation:

Improving Client Retention

Knowing more about your clients allows you to provide more tailored service, thereby increasing their overall satisfaction with your firm. This knowledge should remain with the firm even after their primary relationship contact departs the organsation.

A fee earner signs on to Relationship Intelligence system in the morning. His ‘Client Watch’ alert notifies him that an important client has taken a position at a new company. This information prompts the fee earner to call the client company in order to protect the existing relationship. It also presents opportunity, prompting the lawyer to contact the client at the new company to determine if there are opportunities there for legal representation.

Strategic – Revenue Generation:

Reducing the client development cycle

Relationship Intelligence allows you to share your proprietary information more effectively with those who need it to compete for new business. It also helps you prepare proposals and leverage past experience more quickly and efficiently.

Your firm is one of many competing for a new client. The Relationship Intelligence you’ve collected reveals that a firm member had done work for the prospect when he was working for a previous firm. That lawyer is included in the presentation to the prospect. The prior relationship tips the scale in favor of your firm and the matter is awarded to you.

Strategic – Revenue Generation:

Building an Institutional Knowledge Base

Intellectual assets are all a law firm has. Those assets depart every time a lawyer leaves the firm or passes away. Relationship Intelligence helps stop the brain-drain by creating a knowledge base that survives the tenure of individual employees.

A lawyer leaves the firm suddenly, placing an important client relationship at risk. Your Relationship Intelligence solution contains notes of all conversations and interactions between the two. You learn that a proposed new business acquisition had been discussed at length. After reviewing the details, you call the client and pick up the discussions for the matter where they left off. The client notices no lapse in service.

Benefit Category

Benefit Description


Tactical – Cost Reduction, Efficiency Enhancement

Ensuring High Quality Data

Data about clients and contacts must be up-to-date and accurate, otherwise the firm risks damage to reputation and loss of clients due to poorly executed campaigns and communications. A Relationship Intelligence solution will ensure the greatest quality of data possible.

A PA automatically updates the fee earner’s Outlook database every time a notice is received from a client with updated contact information. The Relationship Intelligence solution automatically captures these updates into the centralised system, ensuring that the marketing department is always working with the latest information for mailers, newsletters and other campaigns.

Tactical – Cost Reduction, Efficiency Enhancement

Streamlining Marketing Initiatives

Developing marketing campaigns such as research, mailings, events, and the like can be highly labour intensive and time consuming. While the pay-off from these activities is high, they come at great cost. Relationship Intelligence helps streamline these activities and reduce costs associated with most firm marketing initiatives.

Your firm is holding a seminar for clients on the legal implications of recent tax changes. Managing events like this previously would have required substantial overtime and extra staffing to manage the mailings, responses and follow up. A Relationship Intelligence solution slashes the time it takes to execute these labour-intensive projects by centralising mailing list management, e-mail, fax and direct mail functions and event coordination efforts.

Tactical – Cost Reduction, Efficiency Enhancement

Eliminate Holiday Card Hassles

Every year, one of the most painful and time-consuming tasks a firm undertakes is the sending out of Christmas cards. A Relationship Intelligence system can greatly reduce the efforts associated with this project.

The Relationship Intelligence system maintains all contacts within the centralised database, scoured of all duplicates. Fee earners need only tick which contacts they’d like to serve as sponsors for a holiday greeting via the centralised list management system. Marketing need then only distribute the cards for signature. The system will manage the details, from mailing labels to noting an activity for the mailing.

As the chart illustrates, Relationship Intelligence is a most valuable asset as a firm navigates the choppy waters of the new economy. But Relationship Intelligence is a relatively new concept in information technology. It begs numerous questions such as, what is the process for creating Relationship Intelligence? What solutions are currently available that are capable of generating Relationship Intelligence? What technologies must a firm have in place to support a Relationship Intelligence solution? The remainder of this article examines these technical questions.

The Relationship Intelligence Process

The process that a technology solution must undertake to create Relationship Intelligence is complex and involves four essential components illustrated in Figure 1:

Relationship Discovery: Relationship Discovery solves the age-old dilemma in law firms that professionals will not exert the time and effort to enter contact and relationship information into the system. Through automated processes built into the Relationship Intelligence solution, it will automatically harvest contact information from a firm’s existing applications (ie contact manager, practice management, HR, word processing, etc.), and derive important relationships from this scattered data. As a result, Relationship Intelligence content critical to a professional’s daily activities can be made available to professionals immediately, without their having proactively to enter information. This greatly enhances the likelihood of successful implementation.

An application collaboration tool must be built into the Relationship Intelligence system for Relationship Discovery to function effectively. Application collaboration tools are capable of harvesting select data from other applications and integrating that information into the centralised Relationship Intelligence database. Essentially, the firm determines which information from these various systems are important to marry with traditional relationship information (ie contact information, activities, notes, etc) and maps those fields into the Relationship Intelligence application. Periodically (as often as the firm wishes) this external information is automatically refreshed, thus ensuring that up-to-date data from these external systems is being delivered to the user.

Relationship Management: The relationship management process provides a complete environment to store, manage and share information about clients and contacts as well as information on your internal experience and expertise. Duplicate management is essential for the success of the relationship management process. If the software cannot recognise that John Smith, John Q. Smith, and J. Smith are the same person, it cannot possibly provide a 360-degree view of that individual or his relationships. A Relationship Intelligence solution should offer sophisticated database management functionality that minimises the likelihood of duplicates and facilitates a single instance of any contact within the centralised database.

Adequate security is another critical element to the success of a Relationship Intelligence solution. The private nature of the work lawyers do, coupled with firms’ varying comfort levels with sharing certain information necessitates security that can accommodate a firm’s special needs. Accordingly, Relationship Intelligence applications will provide sliding scale security that gives users great flexibility in deciding who should have access to, and who should be restricted from, sensitive information at both an individual and group (eg, practice or client team) level.

Marketing Automation: Once relationship information has been collected in the Relationship Intelligence solution, it provides a rich toolset with which to synthesise this information, analyse it and support all marketing and business development functions. Examples include reporting, mailing lists, campaign and event management and data mining. So, for instance, fee earners or marketing teams could access key performance, client service or profitability reports directly from the system without the need for complex database queries or involving the IS department.

Knowledge Delivery: Once the information has been aggregated, managed and synthesised, it is then ready to be delivered to the non-technical lawyer. Relationship Intelligence systems will deliver this content via an XML-based application server to professionals on their platform of choice. Relationship Intelligence should be deliverable to the Web browser, intranets, portals, wireless devices and Outlook, to name a few. As a result, professionals can access Relationship Intelligence in whatever environment they are most comfortable with, and receive it in a format most meaningful to them. Because no work is required on the part of the professional to access Relationship Intelligence, the likelihood of the system’s use increases exponentially.

The n-tier architecture of a solution capable of delivering Relationship Intelligence would resemble that depicted in Figure 2. A centralised database server acts as the repository for housing relationship data. The application collaboration module integrates data from various other systems into the centralised knowledge base. Some systems also offer a replication server, enabling the software package to provide mobile access to Relationship Intelligence when a direct connection is not possible.

The application server sits over the database server, executing calls in XML to the central repository. It then serves up this data to a page server, nugget server or data server. This n-tier approach renders the Relationship Intelligence solution infinitely flexible, enabling it to serve up data to virtually any type of platform including a browser-based Web application, a firm intranet, a corporate portal and even Personal Digital Assistants (PDAs) such as a Palm or mobile phone. Using this architecture, Relationship intelligence can also be delivered to more traditional platforms such as a Windows desktop or directly into Microsoft Outlook. More importantly, an architecture of this type removes the complexity involved with aggregating data from multiple sources. It ensures that fee earners have access to all the information they need, without regard to where it is sourced.

Any application vendor could theoretically build an application capable of delivering Relationship Intelligence. Certain client relationship management (CRM) providers, however, are presently pioneering this technology, extending their present offerings with this added functionality. This makes sense as, currently, CRM applications provide the most extensive repository of relationship information found within the law firm. Moreover, the expertise of these vendors in client-facing technology serves as a source for innovation into next-generation Relationship Intelligence systems.

The Bottom Line

Applications equipped to deliver Relationship Intelligence have successfully streamlined one of the most time-honoured methods lawyers use to grow a legal practice – forging one-to-one relationships. Relationship Intelligence systems aggregate scattered data found in virtually every application used by the firm and present this data in a context meaningful to the fee earner on virtually any platform. As a result, lawyers can leverage the firm’s collective knowledge and wisdom about people, companies, relationships, experience and expertise for revenue generation and client service. Because of its direct and immediate impact on bottom-line revenues, Relationship Intelligence is an asset that firms of all sizes increasingly are seeking to exploit for competitive advantage. n

Rick Klau is Vice President of Legal Markets at Interface Software, developer of InterAction, a Relationship Intelligence solution for law firms. He can be reached at