The Science of Client Relations

by Tom McNichol

Back in the good old days?before the recession?many lawyers banked on a simple method of securing new clients: When the office phone rings, answer it. If the person on the other end needs a lawyer, offer your services.

These days, though, practicing law requires a much more active approach to drumming up new business and keeping existing clients happy. The trouble is, many lawyers aren't very good at systematically cultivating new clients.

"Salespeople are taught, 'Here are the signs a customer wants to buy, and here's where you go in for the kill,' " says Brad Sidwell, vice president and general manager of LexisNexis InterAction, and a former chief technology officer for law firms. "But lawyers don't do that very well. Usually, they just do a few things and wait for the client to call."

Increasingly, it's a buyer's market when it comes to legal services. Clients are more likely to shop around for an attorney and be more demanding once they make their choice. So a lawyer who simply sits around waiting for the phone to ring is likely to have a long, quiet wait.

Client (or customer) relationship management (CRM) software is designed to help lawyers cultivate new business in an orderly and repeatable way. It aims to track every contact or "touch" with a client, or would-be client, and then provide hard numbers on what's working and what's not. (For a list of some CRM vendors, see page 34.) Schmoozing a client may be an art, but CRM software aspires to turn client relations into a science.

Before CRM software came on the scene, most law firms?if they did it at all?tracked client contacts on a secretary's notepad or on a simple spreadsheet. But the sheer volume of emails, phone calls, text messages, and electronic documents that pass between attorneys and clients in the digital age demands a more orderly approach to client relations.

"Inside law firms of any size, it's gotten too unwieldy to figure out who is touching what clients and when," says Sidwell. "Even small firms need to have a broader picture of their client base. You need to know how clients come in the door, what you do with them on a daily basis, what you do to retain them, and how you maximize what you can get out of those clients. You need a tool that can capture that information as it happens, and then do some analysis around it. And technology is just about the only way you're going to get there."

Almost every industry does CRM at some rudimentary level, but the legal profession offers unique opportunities for advanced client relations management. Law firms are already rich repositories of client data, and more accumulates by the minute.

"Law firms leave a 'paper trail' a mile wide," says Preston McKenzie, vice president and general manager of Hubbard One, which sells CRM software. "It's everything from docket filing to email exchanges to time and billing information."

Of course, having a lot of useful client data on hand is one thing; collecting and analyzing it to reveal telling patterns and map future strategy is quite another. "It's all about getting the right attorney in front of the right client at the right time," McKenzie explains.

The most basic function of CRM software is contact management?tracking the names and contact information for every client, the nature of their legal concerns, and who in the firm is the main point of contact with the client. Many firms already track this information to identify possible conflicts of interest. With CRM software it's all stored in a single data silo, rather than scattered among multiple desktops, file cabinets, or yellow legal pads.

But CRM software is designed to go much deeper than merely collecting and organizing client contact information. The heart of CRM is sometimes called "pipeline management": tracking and analyzing everything that's being done to keep business coming through the door. That means first of all having deep knowledge of a client's specific needs in order to identify potential business opportunities.

"As an attorney, you have to know a client's propensity to buy your services," says LexisNexis's Sidwell. "Is this client already doing work with four other law firms, and we'd be the fifth? If so, that's going to be a different kind of sell. Is the client in a market that's litigious? If they are, that's a great opportunity for a litigator."

CRM software pulls in "touch" data from various sources, such as word-processing programs, personal contact managers, time and billing software, accounting data, email, and faxes. Most packages can be configured to notify an attorney whenever anyone in the firm enters information about a specified contact. By tracking client relationships in such a systematic way, CRM software makes the unpredictable task of securing new clients somewhat more predictable.

"In this current environment, many firms are realizing that their greatest opportunity for continued legal work is with people and organizations that the firm already knows," says Hubbard One's McKenzie. "There is a focus at firms to stay aware and stay connected to their current relationships, whether those are top-billing clients or people they've only done a bit of work for."

Most CRM software lets users sort client lists into distinct groups and then specifically tailor pitches to market to one or more of those segments. One client group might be better reached with one-on-one meetings; another might be better courted with a group event, or a series of white papers keyed to its particular industry. Analytics let users track types of opportunities, revenue forecasts, and other metrics of business development. And most CRM systems integrate with Microsoft Outlook, so firms don't have to switch software?just add another layer to it.

But in practice, most CRM systems do require a change in the way attorney workflow is handled on a day-to-day basis. Building a robust CRM system depends on a resource many firms are reluctant to surrender: attorney time.

"Your success or failure with CRM software is less a technology issue and more a process problem," says Andy Havens, a legal marketing consultant and founder of Sanestorm Marketing. "It has more to do with what you're going to require lawyers to do as part of their daily work than [with] the features of the software. You have to know what things your lawyers are willing to do that are trackable."

Indeed, a CRM system is only as good as the data that's put into it. If attorneys aren't willing to change their work habits to enter the right information in the right place, CRM software won't be effective.

"Sometimes [law firms are] convinced by [CRM] vendors that they can get firmwide contact information overnight, and that they can then slice, dice, and make use of it right away," says Sidwell. "It just doesn't happen that way."

It can also be difficult to get lawyers to upload their contact information into a central data repository so that other practice areas in the firm can take advantage of it as well. Some attorneys simply don't want to divulge contacts, even to their colleagues?or especially to their colleagues.

In other situations, attorneys may be unwilling to sacrifice billable hours to input data that may or may not pay off for them in the future. And when CRM systems fail because of a lack of lawyer commitment, the attorneys often blame the software and then grow even more opposed to trying new technologies. The key to adoption is to rely on a tried-and-true strategy for getting lawyers to do something they don't want to do: Appeal to their self-interest. True, giving up client information may cut into billable time and result in attorneys having to share some of their clients with others. But CRM software can just as easily bring them additional work that comes from a client lead generated by someone else in the firm.

Getting everyone on board with using CRM software before you purchase it is particularly important because these products aren't cheap. For example, Versys's IntelliPad CRM costs about $11,000 for 30 users, $35,000 for 150 users, and $60,000 for 400 users. Firms hesitant to shell out big bucks for a software package that may not be eagerly adopted by attorneys can test the CRM waters with a "cloud" computing solution that's delivered over the Web for a monthly subscription fee. (Salesforce.com is one vendor that offers a cloud-based CRM application, costing anywhere from $25 per user per month for a very basic system to $250 per user monthly for an advanced system.) Another alternative: Hire a consultant to pull out the existing CRM data that your firm already collects on a daily basis and evaluate the benefits of tackling your client relations in a more systematic way.

No piece of software can replace the human touch that's so essential to retaining legal clients and attracting new ones. But CRM software can be a good way to ensure that all clients get touched in just the right way.

---