The Information Age Is Now They Are Out There... And They Are Watching Raising Your Fences Using Competitive Intelligence to Your Own Advantage What Real Competitive Intelligence is. What Real Competitive Intelligence Is not.

Many plaintiffs' attorneys are unaware of a new group within the corporate structure of many defendants. These same attorneys continue to believe that pretrial preparation in a products liability case consists of simply preserving the product, interviewing the witness, taking a few statements and depositions, spending a little on investigation (but only if absolutely necessary), and bingo-case done. In too many cases, plaintiffs attorneys litigating complex product cases are blind-sided by previously unknown information and by opposition strategies that seem to reflect a prior knowledge of plaintiff's own hidden strategies. The fact is that in most of these cases, the critical information was discoverable (but wasn't discovered), and the opposition did know the not-so-hidden strategies (long before trial). The reason was the competitive intelligence unit within the corporate structure of the defendant manufacturer.

Many of the products of commercial investigative and intelligence services (often really a glorified library) are at best mediocre. All too often plaintiffs' attorneys never get a useful product from investigations, nor do they appreciate the depth of data that can come from the intelligence professional. As such, plaintiffs' attorneys use of such resources remains low, and the costs of these services are perceived as too high. This must change if attorneys for injured plaintiffs are to enjoy continued success. Conversely, large opposition firms and corporations have made concerted efforts to obtain data from you and other peripheral sources (such as your former employees and staff) and then secrete that carefully gleaned information in what is commonly referred to as the Business Intelligence Gathering Unit1 or the Corporate Competitive Intel Unit1 of their corporation or corporate law staff.


II. They Are Out There... And They Are Watching

Many of us may be in the habit of thinking that all communications are confidential, especially within our own office. But are they? Have there not been times when sitting in settlement negotiations, discussing interrogatories or at a mediation does the opposition do something suddenly and unanticipated that gives you cause to pause? This may not be just happenstance. It may be more a matter that you, your office or your staff have been compromised by competitive intelligence gathering by the opposition. While that may not always be the case, presume in most instances you have been compromised. Paranoid? Perhaps. Or is it simply reality? When the opposition or their representatives offer to provide pre-translated documents, to pick you up at the airport to facilitate the meeting, or when they recommend a hotel for depositions, or a hotel for you to stay at, is it because they are being nice? Or is there an agenda that is not clearly visible? Think about it, because somewhere, someday, you may hear your own words parroted to a jury or used in front of a judge. You may hear a question asked that the opposition shouldn't have known to ask; a question you did not want to hear asked.

A number of devices and techniques facilitate the intelligence-gathering process, ranging from the mundane to cutting-edge technology. Simple recording devices from the Watergate era are still just as effective as they were then. In many cases, microphones are in plain view in the opposition firm's conference rooms, ostensibly to record meetings and depositions. But are they on when you are discussing details of your case in a closed-door session with a mediator, or with your client? Checking to see that the microphones are turned off might put you at ease, but that doesn't mean there aren't microphones you can't see. Your private conversations can be compromised just about anywhere: your lunch conversations in break rooms and local restaurants, for example. Also keep in mind that a hotel room is not necessarily the safest place in the world for your case files, laptop computer or private conversations. (See Global Intelligent Remote Listeners AKA G.I.R.L.),

You must also remember that just because you are in your home office doesn't mean you can forget oppositions. For example, the TS-2-5 is a surveillance telephone device which works rather simply. An operative telephones you, you answer and a brief conversation takes place. The operative then re-dials the number and, like magic, he can monitor all sounds without interfering with your normal use of your telephone. There are also a number of moderately priced eavesdropping and recording devices that are widely available on the market. Properly used, this equipment can remotely or covertly videotape conversations from across a dining room, a courtyard or any other public area where you might think your conversations are private.

One might ask why corporations and opposition firms would take such risks. Unfortunately though, the risks of detection are extremely low. In addition, the benefits from even the legal (although perhaps ethically questionable ) methods of intelligence gathering can be vast. Imagine-knowing what your opponent was thinking, even as he was thinking it. Remember, in our competitive world, some corporations and opposition firms will not allow legal boundaries to deter them from ultimate victory, a most cynical but true more often than not view of 3we can crawl out of this if we are caught cynicism which originates in the corporate boardroom of corporate legal speak.

It is also important to remember that competitive intelligence is not limited to covert, high technology spying. In fact, some effective means of competitive intelligence may not even be ethically questionable. A well developed and organized intelligence file on a plaintiff's attorney can be generated simply by examining public documents and usual practices and procedures. For example, just think of how much information can be gathered from discussions about your prior cases with other defense attorneys, or by using a commercial verdict announcement service such as Confidential Attorney Reports that publishes case results. These reports commonly contain many details of the case, including the experts used, statutory and pretrial settlement demands and offers, the contentions of each party, the jury verdict and jury member impressions.

A well-honed intelligence file based solely on information gained from your past competitors and a collection of verdict reports will allow the oppositions firm to predict what experts will be used in a specific case, long before the designation of experts. This means that the opposition will have months, or in some cases even years to investigate prior cases where your experts have testified. If one of your experts has ever been impeached in deposition or on the stand, you can be almost sure it will be uncovered.

The opposition will also be able to compare your settlement demands to jury awards. If they see you consistently overvalue cases in your settlement demand, they will take this into consideration when negotiating settlements. If they realize your demands often represent a reasonable settlement value, they will know to take your demand more seriously, taking much of the guesswork out of the process and giving them a serious negotiating advantage.

Another way opposition firms use information from other attorneys and verdict reporters is by looking at the jury impressions to see what issues you were most successful in presenting, or conversely, what issues mitigated against a favorable verdict or a larger damage award. Effective use of this information may allow the opposition firm to focus on perceived weaknesses such as a consistent inability to limit comparative negligence or perhaps proving a permanent disability. They might realize that you are incredibly successful on proving defects in complex cases, and therefore decide not to put up much of a fight on product defect, allowing you to think you are on your way to victory. But then the rug is pulled out from under you when they present the jury with a comprehensive and hard-hitting explanation of how a verdict-proof defendant should bear the brunt of responsibility for your clients injuries and damages. You are left wondering, "What happened there?" The answer is that they knew what was going to happen long before you did. They knew you would focus all of your energies on explaining a complex defect and injury mechanism. They also knew you would be successful in doing so. But they were able to identify and exploit your potential weaknesses through comprehensive competitive intelligence-gathering.

If a simple, legal and ethical technique like compiling verdict reports can be so incredibly helpful, imagine how effective a defense firm could be if they also incorporate some of the more shady and covert techniques now, regrettably far too common in competitive intelligence gathering.


III. Raising Your Fences

As technology progresses and the need for information increases, confidential information (costly) and knowledge (powerful and profitable) must be guarded through additional steps. Looking to the corporate world, we see non-disclosure agreements preceding any outside contacts in an attempt to limit potentially harmful leaks. Critical information is only made available on a need-to-know basis, and confidential written materials are prominently marked as such. In the litigation arena, manufacturers usually insist that experts sign protective orders before releasing internal documents. Manufacturers also narrowly construe discovery requests, producing only minimum responses to the most broadly constructed requests. When cases finally reach settlement, the amount of the settlement is almost without exception subject to confidentiality agreements. Of course, these strategies also limit the amount of information available to other plaintiffs' attorneys in similar cases. Obviously, manufacturers are aware of the potential downfalls of allowing internal documents and sensitive information into the public domain.

Attorneys should take prudent steps to safeguard their own internal information and more importantly, their exclusive knowledge. Simple precautions can be taken to make sure that conversations are not being overheard or otherwise monitored. If you suspect there is a possibility that the security in your own office has been or could be compromised, call an investigative service with counter-intelligence capabilities to sanitize your office. One must be very cautious since many so called "sanitization and debugging firms" have often been belatedly discovered as nothing more than "wand waivers". A professional investigator or intelligence analyst can also evaluate various aspects of your practice to point out where you can improve your own security.

There are many steps that you can take without professional assistance. The most obvious involve evaluating the law office itself. Simple but secure locks should be on all functioning doors and windows. Filing cabinets with sensitive information should not be placed in generally public areas (where participants at deposition might sift through your files.) Also consider alarm systems or video monitoring equipment, if needed, to ensure your physical security.

You can also take steps to protect your internal documentation. For example, critical and confidential documents should be marked accordingly, and placed in secure filing cabinets. A circulation index should record how many copies have been made and who they have been distributed to (preferably only on a need-to-know basis). The keys to the filing cabinets should only be held by employees with authority to handle the documents contained therein. The computer files should be pass phrase-protected to keep unauthorized employees and others from browsing your database. For non-sensitive filing cabinets, you should still take steps to limit who has access to your files. An often used document shredder is an excellent security anti competitive intelligence gathering device. In larger firms, it is not uncommon for some employees to be unfamiliar with all of the support personnel filing and removing documents from the cabinets. Is it conceivable that an unauthorized person (like a janitor or maintenance man) could pilfer your files? If so, it may be time to rethink your office layout or filing methods.

You may also want to reevaluate how you interview and hire personnel. Often times, support staff have worked on both sides of the fence, and they may have built up special loyalties to attorneys and firms in the past. It might not be surprising to find out that a close friend of your new support staffer just landed an associate position at a firm representing one of the opposition firms in one of your own cases. An unsophisticated file clerk or receptionist might not even see the damage in copying an expert's report or minutes from a client meeting, but the damage could be great. Consider having everyone in your firm with access to any files sign non-disclosure or non-competition agreements, and have new employees properly screened for potential security leaks.

Today many law firms use e-mail as a means of rapid internal as well as external communications. Many attorneys don't think twice about attaching internal and confidential documents to their e-mails, and then sending them off into cyberspace. But these same attorneys would never even consider using their credit cards on the world wide web, even on secured web pages. Why? Because of fears that there are people out there who might be monitoring the electronic transmissions. The same attorney who fears incurring the $50 maximum liability on stolen credit card charges might take no precautions before sending documents relating to multi-million-dollar cases over the Internet.

Protecting your computer network is not extremely difficult. If your office only uses e-mail, rather than full world-wide-web access, extremely good encryption software programs are on the market that will nearly guarantee the security of your communications. Some of these encryption programs are so good that the federal government will not allow the software to be exported because they cannot be cracked. On the other hand, if you use a firm web page for external communications with associates and co-counsel, you should consider establishing a firewall (perhaps several) that will heighten security for your system. Don't be lulled into false security because your web page requires a password to log on. Passwords barely represent a minor nuisance to experienced computer hackers, and once they have logged onto your system they potentially have access to your whole database. Furthermore, experienced hackers have written shadow software programs that can monitor traffic into and out of your web page. Even with the most advanced firewalls) in place, you still need to protect your passwords and use encryption software to guarantee security.

In the coming years, the market will increasingly respond to the rising need for added security measures in other areas as well. For example, there are a number of devices on the horizon designed to provide additional security in hotel rooms. Keep your eyes out for a smart key being developed by Bio Metrics which will assist in ensuring your hotel room is far more secure and private than what it is currently. A smart key will give you the ability to reprogram the electronic lock on your hotel door so that even the maid will not have access unless you are there. This smart key technology should be developed and totally available in 1999. Further, there are miniature video motion-sensor devices that can be placed in your room to alert you of and record any unwanted visitors to your room. Better safe than sorry? It's up to you, but in the right case you may want to consider such protection.


IV. Using Competitive Intelligence to Your Own Advantage

What is meant by the term competitive intelligence? Intelligence-gathering combines what is already known with what is newly learned. Competitive intelligence adds the additional analysis of applying what is known to predict what may happen in the future. Competitive intelligence is really an awareness of a particular situation and an understanding of how that situation might change in the future as well as its potential impact on the variety of issues raised in your complaint.

As just mentioned, competitive intelligence adds analysis to intelligence gathering. When presented with new intelligence reports, the most common attitude of businessmen and attorneys alike is that's nice to know. Knowing something and being able to do something with it, however, are two completely different things. It can be important to keep this in mind when reading through a particularly detailed investigative or intelligence report. You should re-focus your efforts to evaluate the effects of the intelligence, and the opportunities that may be realized by applying what you now know.
From the plaintiff's perspective, there are a number of intelligence resources that are inexpensive and widely available. It goes without saying that AIEG is a leading supplier of information for attorneys. Similarly, ATLA and other attorney groups have information exchanges that can assist lawyers in almost any type of litigation. Recently, in response to the rising need, a number of specialized research groups have formed that assist attorneys in everything from patent and copyright research, to helping identify qualified and experienced expert witnesses. Then, of course, there are highly skilled and experienced private investigating, litigation support and intelligence gathering services available to provide you with any number of information services. But remember, getting the information is only the first step in the process. You must analyze the information to make it work and turn same into exclusive knowledge, at least until the conclusion of your matter, following which a sharing of that knowledge would be a first priority.

There is also a way to use a manufacturer's competitive intelligence methods to your own advantage. Many manufacturers actively investigate the design and production methods used by competitors. This information is kept within their own competitive intelligence departments and is used according to their own needs. You can take advantage of your knowledge of this department by directing discovery requests directly to the intelligence department of a defendant manufacturer. For example, assume a necessary element of a cause of action requires showing the defendant manufacturer had prior knowledge of an alleged defect, or knew of reasonable alternative designs that would increase consumer safety. Normally, plaintiffs' attorneys direct discovery requests to the defendant in general and not to a particular department, giving the defendant discretion over what department actually answers the request. However, if your requests are directed specifically to their competitive intelligence department, you may be able to expose investigations into the defendant's competitors. The very same information that the defendant gathered to help its own cause can now be used to help you and your client.

To make full use of a defendant's own intelligence gathering department, you may have to do some investigative/intelligence gathering work of your own. In many cases, the competitive intelligence department is disguised as a completely separate entity. For example, major cigarette manufacturers created new businesses to evaluate the potentially harmful and addictive effects of their products, and to experiment with varying levels of tar and nicotine. Discovery requests directed towards a cigarette manufacturer alone would be answered by the cigarette manufacturer alone, frustrating the efforts of plaintiffs in early cigarette litigation. But now, after years of investigative work and a few corporate defections, the competitive and internal intelligence divisions of cigarette manufacturers have been exposed for what they are, and potentially damning information is streaming into the hands of attorneys across the country.


VI. What Real Competitive Intelligence is.

1. Be the watchdog of the firm or corporation and the matter being handled, on the lookout for significant change that can impact its future favorable, most desired resolution;

2. Determine, through active involvement as advisors and contributors to users, within your firm or corporation, the entire external intelligence needs for the decision-making process on matters being handled, including the strategic decision planning process, to assist in the implementation of tactics, to ensure resolution with maximum benefit to the matter and;

3. Be the gatekeeper for all intelligence gathering and investigative information that flows inside the organization/ firm.

4. The Intelligence Effort should/must be able to answer the questions that keep you, awake at night. What are the burning issues involved in the matter being handled or dealt with at the moment and in the long term.

The fact that practitioners are aware of the discrepancy between what they are currently asked to do, and what they should be doing, is a sad commentary to the fact that so far, decision makers fail to see the true potential of intelligence as an adjunct to garden variety handling and investigation. This is partially due to the ambiguity about the analytical tasks of the function, but more near and dear, the related cost and time. Once the person charged with the handling a major matter sits down with his Intel Ops Manager and the intelligence analysis is defined more specifically within the framework of strategy, the true intelligence professional will have a solid ground to gather the required information, from thousands of direct and indirect sources. Naturally, first they themselves have to understand what is it specifically that the intelligence is supposed to achieve and no one, but no one can provide that better than the person charged handling the matter.

VII: What Real Competitive Intelligence Is not.

1. A library or Paralegal Function-get me everything there is on ..........

2. An activity viewed as creating a value or benefit to the law firm, the firm's clients or case handling.......just by existing.

3. A catalyst for publication (the publish or perish syndrome) or the mere republication of that which is already known or perceived........internally or externally.

4. It is not practiced by clairvoyance. Expectations of potential must be balanced by the resources allotted and the expectations must be managed.

5. Reliant on unethical or an illegal process.

6. It can not be done with a reasonable expectation of success at the 11th hour --- advance foreknowledge of the preceding five (5) issues are critical, the earlier the better.

7. There is no magic bullet or sure fire system......there must be a prudent, true and tried, agreed upon........process.

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