Lawyers have a reputation for being tech laggards. While some lawyers embrace tech-aversion as if it were some quirky idiosyncrasy, most are eager to adopt technology when the advantages are clear. Lawyers are paid to be discerning and trained to identify leverage, and when a law firm’s tech initiative does not align with its lawyers’ best interests, it is doomed from the start. This dynamic exists in other industries, but the legal sector is especially sensitive to it.
This can be seen in customer relationship management (CRM) adoption. Most law firms have adopted a CRM system, but, in general, lawyers have not found using it to be to their advantage. But that mission-critical relationship data you initially wanted from a CRM is still best accessed through it; you just have to understand how to access the data you need.
Status Quo vs. Seeking a Competitive Advantage
A 2015 Ackert Advisory Legal Industry Report found that 70 percent of law firms have invested in a CRM (a figure close to 100% among enterprise law firms), but CRM usage is another story.
At roughly half the firms with a CRM, only one in 20 lawyers (at best) uses it. Roughly seven percent of the firms –– we might call these the “success stories” –– have achieved moderate adoption of their CRM (though a 60-to-80-percent adoption rate is merely a good start).
Some partners might look at this chart above and feel a sense of relief: “Phew. It looks like we are not the only ones hemorrhaging money on our neglected CRM.” Some might wonder how those seven percent of law firms got their lawyers to use the CRM. Some might spot something else entirely: A small percentage of law firms have a massive competitive advantage right now.
Think back to why your law firm invested huge sums of money into CRM. Your investment was not in software or a next-generation database; you invested in a future state, one where the following are true:
- Mission-critical data come out of hiding
- Lawyers and business development (BD) teams proactively identify new client and cross-selling opportunities that make sense
- The marketing team has the contextual data needed to enhance client relationships at scale
- Partners know when it is time to initiate, strengthen or salvage key client relationships
CRMs still hold the key to this grand vision, but can only fulfill their promise when they contain comprehensive, up-to-date data. Data fuel your CRM engine.
Unable to envision a solution to the data entry side of the equation, some law firms have already written off their CRMs as a total loss. They are not getting rid of the system altogether since it is bought and paid for and still serves a purpose for those who use it. But without wide-scale adoption, it is essentially useless at the organizational level, which was the underlying promise of the intelligent future state.
If given a do-over, many law firms would not invest in a CRM, opting instead for a less expensive, low-frills database or maybe a free solution. Not that the future state is suddenly less desirable; there are serious doubts whether widespread CRM adoption is achievable.
What about the small percentage of firms that have figured out CRM adoption? What are they doing? While most law firms are still plagued by inefficiency –– the same level of inefficiency that warranted the massive initial CRM investment –– some are operating in that future where relationship intelligence flows freely, from the real-time dashboard in the corner office to the pre-meeting intelligence delivered to the BD representative’s smartphone.
Marketing and BD Teams with Intelligence
Let’s examine a few ways in which marketing and BD teams thrive at firms with access to relationship intelligence across the organization.
The Marketing Function:
- Proactively builds the firm’s brand by using data to engage in timely interactions with the people
and communities that matter
- Uses contextual cues to create and deliver relevant, useful messages that add substantive
value for clients, as opposed to mass messages which primarily are created for a persona
- Creates event-based rules that enhance each contact’s experience with your firm at scale, from
onboarding to advocacy
The Business Development Function:
- Combats the convergence trend by using data to pinpoint the firm’s most viable cross-selling opportunities
- Builds compelling cases for cross-servicing clients while doing away with the discovery and qualification meetings that waste colleagues’ and clients’ time
- Identifies business opportunities where partners and lawyers can start conversations from a position of strength
A Recruiting Edge
If you are a highly skilled marketer or BD professional, would you work at a law firm where accessible, comprehensive data empower you to build an impressive portfolio and advance your career or a firm where holding data hostage and guesswork are the norms? There is no comparison. Why would a respected BD pro or rainmaking lawyer work at a firm where she routinely gets shot down in baseless internal meetings when she could work where access to data allows her to build business cases proactively that ensure productive discussions from the start?
As more firms create data-rich environments, talented marketers and BD professionals will gain leverage because they no longer will work in environments that do not facilitate achievement. We can also assume that the next generation of data-embracing lawyers will prefer the collaborative environment.
Where Is the Sense of Urgency?
With proof it is possible to unlock the desired future CRM adoption can produce, why is adoption still so low after CRM systems have been around for decades?
This chart illustrates a variety of reasons lawyers do not use CRMs. Upon closer examination, low usage rates come down to two reasons:
- Motivation, which is covered by “lack of accountability”
- Difficulty, which is covered by everything else
In the past, law firms could chalk up low usage to cumbersome data entry and complicated technology. This made it easy to ignore the elephant in the room: motivation. A partner could rationalize continued low CRM usage by saying, “Even if we take steps to address a compensation system that discourages lawyers from using the CRM, they still will not use it because it is more trouble than it is worth.”
There used to be merit in this statement but no longer. Now that firms can solve all aspects of the “difficulty” side of the CRM usage equation with customer relationship automation tools, the only thing left to solve is motivation.
How To Address Motivation
“Lawyers love to see precedent,” says John Remsen, Jr., President and CEO of The Remsen Group. “A lawyer in Cleveland will say, ‘Prove to me CRM works!’ You can say, ‘Well, here’s what our Cincinnati office did with CRM. They took a team approach to winning this big client. Joe had a part. Bill had a part. Sally had a part. And they were all willing to make it happen.’ And the lawyer will begin to get it.”
In lieu of internal precedent, lawyers can be exposed to the success stories of other firms, creating a culture shift snowball effect in the legal sector. In other words, if you do not want to address motivation, just wait long enough and it will address itself.
We are already seeing a gradual shift away from the “What’s in my column is in my column. I win, you lose” mentality, as Remsen puts it. This shift will only accelerate once law firms realize the full extent to which a team-oriented environment that rewards intelligence-sharing is positioned to expand business and pilfer clients. Conversely, it is hard to imagine a scenario where a law firm changes nothing yet achieves sustainable growth while competing against data- empowered partners, lawyers, marketers and business developers.
This article was first published in ILTA’s April 2017 white paper titled “Marketing and Business Development: It’s All About Clients” and is reprinted here with permission. For more information about ILTA, visit www.iltanet.org.