Is Corporate Intelligence a Must, or a Waste of Time and Money?

In the complex chess game of business, when does intuition give way to the necessity for ‘business intelligence’? This is not the start of a dubious infomercial, though it could be mistaken for one. Instead, it marks the entry point into the burgeoning industry of corporate ‘intelligence’ firms, whose services are increasingly sought after in the high-stakes world of legal wrangling.

To refine our initial inquiry: when do traditional legal avenues—such as discovery—fall short in their promise of leverage within the courtroom? At which juncture does one turn to specialized corporate ‘investigations’ to uncover the elusive checkmate? And crucially, what sort of information does one covet when commissioning these investigative forays?

The utility of such queries becomes apparent upon examining the bounty yielded by the discovery process, which equips legal teams with evidence via written queries, document requests, admissions, and depositions. Consider the overwhelming tide of data in some cases, where one party may inundate their adversary with evidence to gain an upper hand, as was the case with Purdue Pharma’s initial interaction with investigators probing the ‘opioid epidemic.’ Only when Patrick Radden Keefe of The New Yorker wove together disparate threads did a pattern crystallize, culminating in the downfall of the Sackler drug empire—a saga later portrayed in the Netflix series Painkiller.

Yet, reliance on discovery presupposes the cooperation of all parties, a naive assumption given the countless instances of non-disclosure in legal annals. This begets the rationale for prudence and the enlistment of third parties to discreetly probe an opponent. This need amplifies in jurisdictions beyond the reach of common law, where discovery is not as readily accessible.

The proliferation of corporate intelligence mirrors the digital revolution; though such firms predate the Internet, it was technology’s embrace that birthed an industry adjunct to litigation. In the digital labyrinth, the traditional detective’s toolkit for tracking breadcrumbs proves inadequate. This begs the question: who is equipped for sleuthing in this new digital realm?

Chambers and Partners, a UK-based rankings service of professional services providers, lists several firms in the ‘business intelligence’ space, including the firms Kroll (largely seen as the industry pioneers), Nardello & Co. (staffed by former high-ranking U.S. intelligence officials), and Raedas (staffed by lawyers), with only the latter achieving the highest possible ranking. Also included in the intel ranking are hard-nosed, defamation-heavy law firms like Schillings (who represented Meghan Markle) and Mishcon de Reya (who represented Leave.EU founder Arron Banks), who are presumably in the market for material with which to leverage settlements for their well-heeled clients.

The integration of corporate intelligence services into law firms, transforming them into ‘full-service’ entities, is a logical progression. Many of these law firms traditionally outsource such intelligence tasks to external agencies like Kroll or Raedas. However, to improve profitability and streamline operations, these firms are increasingly bringing these services in-house. This trend is gaining momentum, particularly as the influx of oligarch money, once a significant revenue stream, is diminishing in places like London. A similar rationale applies to the growing intersection between litigation and public relations. This is likely why Schillings has recently expanded into the public relations sector. Their move into PR reflects an evolving industry trend where legal services are increasingly intertwined with strategic communication.

Firms in the market typically label their intelligence services as ‘litigation support.’ This term refers to the process of uncovering information that can be pivotal in achieving a favorable outcome in court. Schillings succinctly describes their approach on their website: “We find evidence, establish the true narrative, and win cases whilst keeping you safe.”

The effectiveness of the evidence gathered by these firms can vary. For instance, consider Raedas. Their performance, as evidenced in the recent case of Iraq Telecom vs. Korek, was not particularly noteworthy. In this case, the International Chamber of Commerce awarded nearly £1.5 billion. However, the judgment suggests that this outcome was achieved despite Raedas’ involvement, rather than because of it. This instance raises questions about the impact and quality of the intelligence provided by such firms in high-stakes legal battles.

The Ras Al Khaimah Investment Authority v. Azima case, involving several ‘intelligence’ firms, presents a similarly complex scenario. The myriad of developments in this case – including hacking incidents, data leaks, and the involvement of various entities like ABC and ENRC – make it challenging to follow. Highlighting this complexity, the Bureau of Investigative Journalists pointed out in their investigation that English courts are increasingly inundated with cases involving hacked evidence and stolen data. This trend underscores the murky and often convoluted nature of legal battles where digital espionage plays a role.

In essence, data, regardless of its integrity, is a lucrative market, even for the smaller players in the field. For instance, Raedas, a relatively minor firm in this industry, reported net assets of just under £3 million in their 2022 accounts. In contrast, Kroll, a leading pioneer in the sector, recorded a turnover exceeding £100 million in 2021. Despite this impressive revenue, Kroll still experienced a slight loss that year.

This context highlights the competitive nature of the business intelligence industry, which flourishes amidst the relentless pursuit of advantage in high-stakes disputes. However, whether these intelligence services provide value for money remains an open question, considering the varying scales and financial outcomes of firms within this sector.