It is no longer sufficient for commercial law firms simply to advise on the law.

Clients expect their lawyers to give them guidance in their own market place.In the face of increased competition from accountants and business consultants, lawyers are gradually waking up to this commercial reality.

In the past fortnight City law firms Withers and Paisner & Co have published their own studies of two very different markets -- venture capital and employee share schemes.

Both reports were recognised by clients and potential clients as required reading for business people.The growing expectation with which clients await these market reports was highlighted at the launch last week of the Withers study on corporate venturing.

Presenting the keynote speech to an audience of leading players in the venture capital market was government minister Richard Page.

This is the third study Withers has published on the venture capital market.

Its conclusion, that a lack of investment in smaller entrepreneurial companies is holding back the country's economic growth, received national press attention.

With less fanfare, but wielding just as much influence, Paisner & Co partner, David Cohen recently presented the latest of his ten surveys on employee share schemes.

The Cohen studies have become important to companies needing market guidance in the trends affecting share schemes.While both reports are important pieces of market intelligence in their own rights, they are also crucial in helping the law firms retain their leading positions in their respective markets.David Gebbie, author of 'Window on technology -- corporate venturing in practice', the Withers study released last week, said his report shows clients that Withers is 'an entrepreneurial law firm advising entrepreneurial companies'.Former Alsop Wilkinson lawyer, Mark Vickers, now head of banking at the newly merged Dibb Lupton Alsop (DLA), is continuing to release his highly-acclaimed studies on the se nior debt market.

The latest one is expected in April.

Mr Vickers describes the reports, which began in 1993, represent the 'most authoritative comment' on the senior debt market.

This claim is lent support by the extremely high response rate to the survey (80% of the banks last time).All three lawyers' reports originate from the decision to commit resources to market intelligence.

Bigger law firms tend to have departments dedicated to collecting market data.

Michael Belford is head of business development at Lovell White Durrant.

The firm's department is divided into two -- marketing communication, and business analysis and information.

The firm employs three business analysts to look at its existing clients' activities as well as those of target clients.

Mr Belford says the two main objectives of this department are to keep partners informed of what clients are planning and to maintain and improve the quality of the client service.Most of the reports are produced for internal use rather than published for the use of the industry as a whole.

These in-house studies are used by partners during 'beauty parades', as a vital resource for seminars and to inform the firm as a whole.Smaller firms like Withers, DLA and Paisner & Co rely more on individual lawyers taking the lead in gathering market intelligence.

Mr Gebbie, Mr Cohen and Mr Vickers all devote their spare time to producing the reports.

In Mr Vickers' case it represents about four 'man-hour weeks' each year.

And Mr Cohen says: 'It's the sort of thing which has to be done at the weekends and in the evenings.'Mr Gebbie says that the only significant cost, beyond his own time, the print-run and a cocktail party, is the commissioning of the City University Business School to do the research.

'We go to the City business institutions to complement our practice skills with their academic skills.

We are not researchers by trade,' he says.

Mr Vickers and Mr Cohen take a different view.

Says Mr Cohen: 'It's less convincing if you get others to do it.' And Mr Vickers says it is important that he should be the one to receive the responses to the questionnaires as there may be 'subtleties' which those with less experience of the market might miss.With accountants continuing to launch forays into the legal market, law firms need to show they are capable of providing added value and market intelligence is a powerful weapon.But says Mr Cohen: 'In my area not many firms provide this type of material -- it's mainly the "big six" accountants.' And it is the accountants, unless firms meet them head-on, who are seizing the initiative.Mr Cohen says more and more accountants are using their market research to 'knock out' lawyers from the drafting stage of employee share schemes.

But City law firms do have the resources to compete.

Of course law firms are more competitive with each other.

So the market intelligence picture would not be complete without some information on rival firms.

In DLA's corporate finance department, in addition to its client files, there is a detailed data base identifying which rival law firms work for which banks.