Law firms are enthusiastically embracing Customer Relationship Management (CRM) systems. According to research up to $37 billion will be spent on CRM worldwide by 2017, up from the current figure of $21 billion.
So what’s driving this uptake? The legal industry has evolved from a stable trading environment into a highly dynamic and competitive market.
Structural market changes
Law is no longer a seller’s market. New purchasing mechanisms are being put in place – fixed fee, shared risk and cost plus, for example. Alternative business structures are appearing that aggressively compete for business in many of the traditional law firm domains.
Many firms are looking at mergers, acquisitions and foreign expansion. 50% of the top 10 UK law firms anticipate merging with or acquiring an international law firm in the next 3 years and 66% of smaller law firms said the possibility of a merger was considered in the first half of 2013.
The way people interact is changing too. Mobile devices are ubiquitous and no longer confined to email and voice communications. 61% of global law firms with at least 50 lawyers provide IT support for the use of employees own devices and many others provide employees with company-owned devices.
Social media is having an impact too. 99% of the top 200 UK law firms use LinkedIn. Nearly 50% of US law firms say social media has helped produce client leads. And clients are using social media to exchange opinions and check out individuals and firms!
In this dynamic market place CRM is helping firms in three key areas.
Retaining existing clients
Most law firms know who their largest clients are, but not necessarily which are most profitable. CRM systems provide the single client view and analytical tools that are needed to identify the most profitable clients exactly and whether all work done contributes equally to that profit.
Linked to existing practice management solutions CRM systems also provide the up-to-date information everyone needs to understand client needs, work smarter and provide superior service. And linked to mobile devices they provide the information anytime, anywhere, enabling practice members to respond faster to client requests.
Increasing client value
By providing a 360-degree client view CRM systems help to identify areas for selling new services. For example, at an international firm, fee earners in country A may not realise that country B is delivering complementary services that could also be offered in country A.
In the same way CRM systems can also be particularly useful after mergers and acquisitions. By gaining a better understanding of each other’s clients, opportunities for revenue growth can be identified.
Improving client acquisition
The third key area where CRM systems help is client acquisition. The best systems incorporate sophisticated capabilities for designing, executing, measuring and refining business development activities, as well as supporting the sales process.
CRM systems are being embraced because they provide the underlying processes and information firms need to excel in a dynamic market. As Julien Desmottes, Head of Software and Development, Dentons, puts it: “In today’s fast-moving and connected world, getting business development, financial and social data on contacts is key. This needs to be available in a single view, instantaneously and from anywhere in the world. CRM is the key to this.”