Customer (or client) relationship management (CRM) is defined by BusinessDictionary.com as “Information-technology enabled strategy aimed at identifying, targeting, acquiring, and retaining the best mix of customers. CRM helps in profiling prospects, understanding their needs, and in building relationships with them by providing the most-suitable products and a very high level of customer service. It integrates back and front office systems to create a database of customer contacts, purchases, information requested, technical support, etc. This helps a firm to present a unified face to its customers, and improve the quality of the relationship.”

In a large law firm, it is easy to make the argument that technology can assist in co-ordinating client information and client relationships and that information can be used to identify cross selling opportunities. There have been occasions where two partners in different offices within the same firm pitched for the same piece of work, which hardly creates the right impression.

In smaller firms, there is often a belief that such systems are not really needed because everyone in the team knows each other. However, in reality, individual partners and departments are focused on their existing client commitments and rarely step back and take time to look at the firm’s client base as a whole.

Even very small firms can benefit from a CRM database, especially if led by an active networker and rainmaker. One lawyer we know regularly speaks on the conference circuit and comes back with ten or twenty business cards after each event. Systematically recording these and managing the opportunities from these contacts is essential to ensure the return on investment in participation in each event.

For larger firms

The larger the firm, the more critical it is to keep control of what each area is doing. Generally, the more clients you have, and the larger the firm, the more important it is to have some sort of central solution that keeps track of firm-wide clients and prospects.

Remember that a CRM database is only a small part of CRM. It is your firm’s mindset that makes it work and there is no point having a great piece of software that isn’t used. One reason it won’t get used is poor quality information, which is key – and far harder to get right than anything you can buy off the shelf. Set up regular data integrity checks and activity alerts to get the most benefit. And if you do marketing emails, the best systems need to be purchased separately and integrated. Generally speaking, the email marketing feature that you get with a CRM database is not nearly as good as a specialist package.

The smaller firm

In the smaller firm where there is no IT department, the practice management system is usually “owned” by the accounts department and is therefore used primarily for billing. The data is often not held in a format suitable for marketing.

Common problems are:

  • there is a huge legacy of poor quality data, and the prospect of cleaning this is a mountain too big to climb: contact names are held in legal format (ie not salutation) and salutation is not held (as not required by accounts)
  • company records are often not attached to individual contacts, or can only hold one contact or contact email
  • reporting is not very flexible and firms are forced to get special reports written eg Crystal reports
  • historical data is not categorised consistently and so filtering the data is not practical either.

Integration

A key question is whether a CRM system can, or should, integrate with other software. In theory, you do not want to be running duplicate databases, but this is often necessary because, although practice management systems claim to include marketing and CRM modules, they rarely do the job properly.

Indeed, practice management software suppliers generally do a good job of convincing law firms that their suite has an efficient marketing module, and so once purchased, firms are then reluctant to invest in something that they think they have already bought. This is a common problem in small firms, where marketing managers often have to muddle along as the practice management system is no use for CRM and there is no support for another separate system.

However, depending on your practice, much of the database may not be clients and could be used for other categories of contact such as introducers, networks or associations, media, conference organisers and prospects. You then simply need to find an efficient way of incorporating client data – which can be as simple as copying the new client forms to the marketing person.

It would be nice to be able to integrate all these systems. In reality though, it’s expensive and very complex.

Pinsent Masons takes the view of “partial integration”, with human input. The event and email features automatically integrate 100 per cent and they manually copy client details from the billing system on a regular basis. It was too expensive and troublesome to automate.

The biggest benefit of the integrated system is that you can easily identify cross-selling opportunities – for instance when you can see who is showing an interest in tax by visiting tax pages on your website, clicking on more details in your tax emails, or attending tax events but not being billed for tax work.

Who should use the system?

Another common debate surrounds whether a CRM system should be used by all members of a law firm, or just by marketing staff for marketing activities.

As with all software you get some early adopters who recognise the potential and some who still leave it to their secretaries or the marketing team. The people who get the most from a CRM system are the ones that use it directly.

We believe that CRM is not just for marketing staff and activities. Once a lawyer thinks it’s not their system, they will not use it. Lawyers can use their CRM solution to identify and track leads or client relationships, or just to look up the correct phone or email for a client.

In-house or hosted?

Having decided to invest, should you buy a CRM solution and host it yourself, or subscribe on a monthly basis to one hosted on the internet?

Hosted CRM systems are ideal for many firms, especially where there are multiple offices, as there is no need for any significant infrastructure and concerns about back up. The choice of systems has improved greatly over the last two years and costs per user have come down.

It also means that they have remote access and can manage bulk updates, such as cleansing the bounces after an email campaign or researching and adding in a new target market, which can really improve efficiency in database management.

We think that the future is definitely monthly subscription to a hosted solution on the web. These systems are easier and quicker to set up and less tempting to try and “personalise”, but a pain to integrate, or bolt your own reporting tool onto. Some do though. The trouble is that they become expensive the larger you get, and the costs never drop over the years – like a bought system.

The last time we enquired about the cost of installation of LexisNexis Interaction which is widely recognised as best of breed for an in-house system, there was a minimum cost of £20,000. This is out of reach of most firms and it can also be hard work to implement, as evidenced by a number of recent discussions on LinkedIn.

Compare this with a cloud-based system, such as SalesforceCRM. This is very intuitive, easy to customise and provides a “sales dashboard” with an immediate valuation of possible work in the pipeline. The simplest version starts at £3 per user per month, but more realistically, the Group level licence starts at £17 per user per month.

An alternative is SageCRM which is £50 per user per month, but we found this complex to customise and not easy to use. Another option for small firms is the cloud-based (and open source) system SugarCRM.

The main thing to keep in mind is that as you add new users, the costs can mount up. If you plan to buy your own system, and you have 250 or more staff, estimate £50 to £200 per user per year – depending on your size and how long you keep it. This may be cheaper than hosted solutions in the long run, but is far, far, far more hassle.

Other large in-house CRM systems are Hubbard One which has been successful in America – and some think is better than Interaction, Pivotal and SAP – all significant investments.

Another interesting option for a mid-market sales system (rather than legal solution) is Sage SalesLogix. It’s the big brother to Sage CRM and ACT! (find all these on the Sage site, and starts at about £2,500 for a one user license, depending on which reseller you buy from.

Also look at Microsoft CRM if you are mid sized and want to integrate your CRM with your email and calendars – which will help hugely with take-up. (Ed: See also our front page article on the increasing importance of Microsoft products). Whether you buy or rent – once you are “in”, the database suppliers know you are stuck with them, so you need to make sure that you test drive the support facility as part of the purchase process too.

Sue Bramall is Director of Berners Marketing which provides marketing support to independent law firms, including managing and developing firms contact management systems.

Email sue.bramall@bernersmarketing.com.

Simon McNidder is the Global CRM Database Manager at Pinsent Masons LLP (with 1,800 users). He also runs a CRM Database hints and tips website (DatabaseFirstAid.com).

Email Simon.McNidder@pinsentmasons.com.

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