this has probably been asked a thousand times, but how do you actually compare a firm to their competitors? what kind of factors are they looking for us to mention during interviews, and how do we research them?
There is no definition on this - in fact what they are really looking for is for you to analyse and explain how you have defined the competitors and explained the importance of why you have chosen that criteria.
There are lots of different criteria you can apply, and in an answer you are not going to be able to use them all. Some of the aspects to consider are:
Locations
Client base
Sector expertise
Practice areas
Who they lose or gain talent to/from (eg have any partners jumped ship either to or from this firm)
Revenue.
Some of those categories can also be defined themselves - for instance, one competitor in one practice area might be different to another.