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CRM: A Litmus Test of Law Firm Evolution

Posted by Olivia Cowenhoven on Dec 21, 2015 11:42:01 AM


Ask anyone who works with lawyers, and they will tell you that law firms are different from just about every other business. Their highly educated sales team of partners doesn’t use the word “sales” and services high stakes “bet the company” projects on a regular basis. But the most important distinction is the lawyers themselves. They are some of the most results-oriented people you will ever meet. They are also some of the slowest to adapt to changing market conditions.

Today’s highly competitive climate is uncomfortable for many law firms. During the prior century, legal marketing was almost non-existent. Lawyers prided themselves on quality of work product, then waited for the next matter to come through the door. Now, lawyers need to shift from reactive to proactive business development (BD); their firms have to work harder to compete for the attention of prospective clients; and new law school graduates enter a saturated work environment where barely half of them find full-time employment (American Bar Association). One might assume that lawyers would respond to this new environment by adopting the standard business behaviors that are common practice in other industries, but this is not the case.

The firm where I work conducted two market-wide studies this year on CRM utilization. One of them focused on law firms and the other focused on non-legal sales organizations. The non-legal study included accounting firms, financial services firms, technology companies, manufacturing companies, pharmaceutical companies and a variety of others. The study inspected the type of CRM platform used, frequency of utilization, reasons behind low utilization and other factors. The findings were expected in some areas and surprising in others.

For both legal and non-legal industries, the proportion of organizations that have a CRM platform in place is roughly the same: 70 percent of law firms and 75 percent of non-legal organizations have CRM.

Their internal utilization statistics vary widely, though. At non-legal organizations, most respondents reported that 81-100 percent of their sales teams uses CRM at least once per day. But at law firms, nearly half of respondents report that less than 5 percent use it “regularly” (i.e. a minimum of once every two weeks). More than 85 percent of law firms said that less than a third of their lawyers use CRM once every two weeks. This statistic is especially telling as it illustrates that the law firm industry is one of the last holdouts when it comes to adopting standard business practices. While it has made dramatic strides relative to 10 years ago, or even five years ago in its own industry, one only needs to examine how legal vs. non-legal organizations define “regular utilization” to see that law firms are still behind the curve.

Though generally non-legal organizations have high CRM utilization, there are inevitably individuals who are slow to adopt. In both surveys we asked why those individuals have low utilization. For non-legal organizations, the top two reasons behind low utilization were lack of accountability (33 percent) and the fact that sales teams don’t fully understand the value of CRM (27 percent). For law firms, the number one reason was also lack of accountability (76 percent), followed by lack of technological proficiency (64 percent). It is important to note here that for both groups, the top two reasons behind low CRM utilization are problems with culture and behavior, not software. While there are dramatic differences between legal and non-legal industries, the biggest challenges are human ones that we all struggle with and must find ways to conquer.

While the top reason for low utilization is interesting, the secondary reasons point to the implicit assumptions that get in the way of CRM adoption. The fact that the second biggest barrier to utilization for lawyers is a lack technological proficiency seems to indicate that they assume they don’t need to be bothered with the learning curve that would enable them to use BD technology more effectively. With non-legal salespeople, the fact that their second-biggest problem is failure to understand the value of CRM illustrates the assumption that their “people skills” and other non-technical abilities are sufficient to enable them to reach their goals. If both lawyers and salespeople were exceeding their BD goals, the assumption would prove to be true, but in many (if not most) cases, both lawyers and salespeople fail to hit their revenue targets.

One lesson that the legal market can glean from other industries is that frequent coaching leads to higher utilization and, consequently, a greater ROI from CRM. For those non-legal respondents that reported a high utilization rate, 84 percent of them said that their organization provides a medium-to-high level of sales coaching and training. Some law firms provide CRM training during the roll-out process, but providing an in-depth technical training during the implementation process will enable lawyers to be proficient with the software, and incorporating accountability structures such as regular meetings with business development managers or coaches will help emphasize the importance of more frequent CRM use.

Another cue that law firms could take from the extralegal survey is that non-legal organizations use CRM primarily for pipeline management. Legal CRM systems such as InterAction place relatively little emphasis on that functionality. Hence, it is unsurprising that this year, the legal space has seen a variety of new products that focus solely on pipeline management with CRM integration. Perhaps we will finally have solutions that consistently engage lawyers. Personally, I will be interested to see who the market leaders will be this time next year. I suspect the BD technology landscape will look a lot more user-friendly.

olivia_cowenhoven.pngOlivia Cowenhoven is the marketing and business development manager at Ackert Inc., which provides BD solutions to law firms globally. She can be reached at or 818-804-5491 ext. 107.

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