“Client Relationship Management (CRM) is the strategic process of selecting the clients a firm can most profitably serve and of shaping the interactions between the firm and these clients with the goal of optimising the current and future value of the clients to the firm.”
“Risk Management” is now regarded as so important that partners have to be designated the responsibility to deal with it - involving, for example, quality standards, money laundering, business continuity plans, complaints, professional indemnity and compliance with professional standards. This follows from having recognised the increasing potential impact of this wide variety of risk-related areas of business (and more). Yet the term “risk management” was rarely heard in the legal profession just 5 years ago.
Like “Risk Management” five years ago, “CRM” or customer relationship management is not a term widely used in law firms, although a lot of it is already going on. Client satisfaction surveys, the client partner role, client reviews, performance and reward measures that include client satisfaction, online reporting, client profitability analysis, culling of clients, testing of new services, seminars and promotional events are all part of it.
A CRM Strategy (like a Risk Management Strategy) helps to pull all these client and customer related areas together; to introduce a more structured, comprehensive and consistent approach to making the most of relationships with clients, referrers and introducers of business.
Aspiring to introduce effective CRM will become as familiar a challenge to solicitors over the next few years as introducing risk management has been just recently - and not only for the largest firms. Client focus has to become a top priority if solicitors want to build loyalty and make themselves more attractive to prospects by providing better value. Then, today’s clients will be less easily tempted to try the new legal services of the AA, HBOS and the rest.
If you are considering where to invest time and effort in the next 12 months, CRM should be up there. Unlike other areas that you might have to deal with, managing your relationships and day-to-day interactions with clients and customers cannot be outsourced to someone else with more expertise and resource. Some components like research, data storage, analysis, reporting and technology integration can perhaps be be outsourced. Otherwise it’s down to your people to deal with if they interface with the client or deliver the service.
The client-focused approach your people could adopt as a part of your CRM strategy has the potential to become a way of life at work; a differentiator from other providers of legal services that your competitors can not copy. It defines how you deliver your services and is inseparable from your people, however automated (or not) your processes may be.
Although you can produce some big successes quickly by focusing on client relationships, the biggest wins come when attitudes change and become engrained in the way people work – which takes time. To get there, lawyers need to learn to walk before they can run. There is a learning process that most people within firms have to go through (as with use of technology) so that they can choose to do some things differently and better to improve the value of service for clients and the firm’s profitability.
Some of those improvements can be put into practice only if lawyers take the initiative to find easier ways to communicate and collaborate with clients as an integral part of the way they work. Some firms are well on their way to doing this but others have not yet gone through the thinking process to head in this direction.
The results you would hope to achieve by consciously developing a CRM strategy – to be implemented over the next 5 years would probably include:
- Improved client satisfaction and / or associated Improvements in client retention and / or reduce complaints.
- Increasing the average “lifetime value” of customers to the practice; this incorporates the desire to cross-sell more.
- Increased new business opportunities – existing clients / new prospects.
- Acceleration of initiatives to extend and customise services.
- More or faster conversion of opportunities to business.
- Reductions in the time involved and cost of key stages in dealing with clients – such as billing, accounting for referral fees, tracking and reporting back on cases or referred clients.
- Reduction in the resource cost of marketing and promotional campaigns through better access to the right information, use of campaign and document templates alongside continuous learning and improvement.
- Improved decision-making at various levels, where decisions made without adequate information available are generally less reliable and take longer to make. Some such as giving estimates on fixed price matters and tenders have a direct financial impact. Others, such as “which clients to keep and which markets to expand?” may have time and resource implications as well as a direct impact. Decisions here could be based on an evaluation of the current or potential “Customer Lifetime Value” (CLV) of clients.
If you haven’t started to talk about “CRM” in your firm yet, there is a white paper – CRM in Legal Practice – that you can download from our website at www.inpractice.co.uk