The Key to Customer Success Lies within CRM – The Third Pillar in a Law Firm

by Fiona Jackson
August 10, 2024

There is no dearth of the number of technology systems that are deployed in law firms today, but by far a practice management system for financial management, and a document management system for secure, centralised storage of matter data, are critical for business operation. There is a third pillar – a CRM platform for business development.

A CRM system is genuinely a platform for growth, when deployed and utilised strategically. Our research has shown that despite the disruption and challenges that the last three years brought, some firms did exceptionally well, achieving annual revenue growth of over 20 percent. These firms did so by quickly adapting their marketing and business growth strategies to the new landscape and relying on their CRM system for insights from analytics, which in turn informed business development, content creation, decision making and so forth.

A strategic approach to investment in and adoption of the CRM system – like firms do for practice management and document management – bears fruit. Take the pipeline management within the broader business development function. As opposed to a reactive approach to pipeline development – i.e., responding to every new business query that comes in – with a CRM system, firms can create a strategic list of “pursuits” that are closely linked to the objectives and goals of the firm. This list of new opportunities can be created based in the firm’s expertise, experience, strength of client relationships and engagements, resource availability and such. These targets can then be closely tracked from within the CRM platform to ensure that the firm is making progress and take corrective action as appropriate.

Similarly, a CRM system facilitates data-driven decision making, as such platforms embed real-time analytics through interactive tools like Microsoft Power BI. For instance, utilising historical data, a firm may be able to determine the organisation’s chances of winning a new deal. To illustrate, say a client is inviting a pitch for their business in a new area of law – for argument’s sake litigation. However, the GC already have a strong relationship with the incumbent firm that has been providing M&A services for the last five years. Through analytics, the firm could determine its chances of winning the business realistically. Alternatively, right at the offset, the Partner may conclude that it’s a “no go” situation due to existing strength of relationship, limited potential for profit, or any other reason. At the same time for the future, this could be a trigger for the Partner to put into motion a strategic action plan to reduce the “no go” situations in question. Or, on delving into the data, if it shows that the firm always loses on price in such projects, then the Partner could even come up a clever financial plan to give the firm good chance of winning this time.

Today, many firms are creating new product lines of legal services. Instead of taking a “finger in the air” approach, leveraging analytics in the CRM system offers a more reliable way of determining the legal services that are ripe for commoditisation. Data such as pricing of previous matters, win-loss ratios, matter expertise, regional spread of the firm, learnings from offering other legal services, and so on would provide the necessary input to ensure a thought through approach.

Furthermore, by integrating practice management and CRM, the benefits of both technologies grows manifold. For instance, duplication is completed eliminated for new business intake. However, the real value comes from insight drawn from data for things like cross-selling analysis between practice groups, correlation between client engagement and revenue, value of referral work, cost versus return on business development activity across key accounts and so forth.

In the current economic climate where uncertainty abounds, it would be a travesty for firms not to leverage their CRM systems in a strategic manner. And crucially for my CRM and business development colleagues in law firms, utilising the CRM system in a data-driven manner will help demonstrate the value of their functions to the organisation. Having worked in law firms myself, I’m familiar with the pressure that the business development departments can face to illustrate that the programmes and initiatives are working. The transparency that CRM technology affords means that responsibility and accountability can be spread across the various stakeholders in the firm. Whilst marketing and business development initiatives may be driven by these function leads, often other individuals – lawyers, partners, department heads, etc. – too have a role to play in the successful delivery of the campaigns. Perhaps crucially, knowing where and why engagement in business development falls short, CRM leaders can drive change through more tailored interaction and consultation.

Finally, it's worth noting that adoption of the above-illustrated data-driven approach does not require a change of CRM system – it merely needs restructuring and repositioning in line with business strategy and goals.

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