CRM together: The link between IT and culture change

As the next generation of CRM systems hits the shop floor, law firms will be asked to review their technology plans and investments in this crucial space. But has IT really got anything to do with better client-relationship management?

By Caroline Poynton

It is unlikely that law firms have ever underestimated the importance of their client relationships to ensuring profitability. So it seems surprising that there has ever been confusion about what client-relationship management (CRM) is really all about, that is, improving a firm’s existing and potential client relationships. Perhaps the introduction of CRM software – first made notable by Interface Software’s InterAction solution, but soon followed up by solution providers including E1 Business, Elite, Pivotal and, most recently, Aderant – was enough to create the perception of CRM as an IT bolt-on to existing practices. Or at least enough firms seem to have thought this the case not to see CRM as anything but an IT project.

Indeed, most firms would agree with this outlook, with the proviso that things have now changed. They now knowingly reveal that CRM is not all about the technology – that the software is merely an enabler for wider and more important cultural change. “One of the dangers of CRM is that it is seen as being driven by technology and if you haven’t got an all-singing, all-dancing data system, then you’re not doing CRM. The reality is that it is about the right mindset and thinking like a client and what challenges they face and how to deal with them,” says Julie Murphy, marketing director at Mills & Reeve. There has also been plenty of incentive to make CRM a core strategic discipline. “Industry research tells us that clients are reducing the number of law firms they are working with and only the firms that excel will survive,” says Baker & McKenzie’s European marketing manager Marie Armstrong. “To offer a superior level of client service, we must make the client’s voice a key driver in everything we do.”

This is all well and good, but there seems to be scarce evidence of those firms that ever implemented CRM purely as an IT project. If anything, the opposite seems to be the case, with firms choosing to implement the technology as a follow-on to behavioural CRM initiatives. Perhaps this is understandable with the smaller firms, which must choose their technology investments particularly wisely. Stephens & Bolton, for instance, has no specialist CRM software in place but claims to run a successful CRM programme without needing to rush out and purchase expensive supporting software. “CRM is a concept and being successful is about winning hearts and minds,” says the firm’s marketing manager, Nick Shrimpton.

Nor do the larger budgets of the bigger firms seem to have created this IT bias. Andrew Powell, director of marketing at CMS Cameron McKenna LLP, is keen to point out that the firm introduced its CRM software only after successfully introducing other aspects of CRM, such as account management and a client-feedback process. Armstrong also supports the behavioural change that is needed before any roll-out of a CRM system. “Firms first need to work out what they want to achieve and how they plan to get there,” she says.

Problems with the software?

That law firms are wary of an IT-centric CRM approach may reflect concerns with the available software to date. As chairman of the first day of Ark Group’s forthcoming ‘Strategic Marketing for the Legal Profession’ conference (26-27 September 2005), Powell suspects that many delegates will be concerned

about the reported high failure rates of CRM software systems and will want to know how to prepare their organisations accordingly. Bryan Roberts, vice president of sales at Aderant agrees that existing systems have caused problems. “First-generation CRM solutions treated client-relationship management as a standalone business process that was completely isolated in its own proprietary data repository, which made these systems more difficult to use and less effective,” he says. “Today, we’re starting to see the first of the next-generation CRM solutions that treat client management as part of a holistic process.” Such solutions, including Aderant’s Front Office CRM system, aim to go beyond standard contact management and marketing-automation functionality, by integrating all contact, relationship and matter-specific information about clients with existing practice-management and business-intelligence systems in the firm. “This common data repository provides firms with a true 360-degree understanding of their clients and prospects, and helps them minimise application integration costs and hassles,” says Roberts.

A solution-provider focus on system integration will be an important benefit for some larger firms that currently employ several CRM systems. By consolidating the number of systems used to store client data, such firms can reduce IT support needs, merge data sources, increase efficiencies and reduce costs. But many firms, rather than looking to update legacy systems, are still in the first stages of CRM-system investment. Hence, Powell describes Cameron McKenna’s adoption of Pivotal’s CRM solution as being in its early days; Ian Gilthorpe, senior partner at Robert Muckle says his firm is only into year two of a three to four-year implementation of Sales Logix from E1 Business; and Mills & Reeve only invested in InterAction this year. This is not to say these firms did not have CRM initiatives in place before investing in the software – it is just that the technology, whether because of system problems or otherwise, has just not so far been the driver for these activities.

Indeed, that firms should consider good CRM to be a behavioural discipline makes sense considering the individual and firm-wide input needed from fee earners if even the IT is going to work. For instance, Gilthorpe explains the system in use at Robert Muckle. “All users are asked to add information to the SalesLogix (SLX) system. If they come across information that they consider important in the context of the overall client or prospect relationship, they add a note to the SLX system. In deciding what information is relevant to SLX they have to ask themselves whether the information would be commercially useful to others around the firm. We also expect them to be proactive in communicating with their colleagues.” Put simply, there is no system quite like CRM for requiring the active input of fee earners and partners. Powell says that his firm has addressed the potential challenge of getting partners to update information by linking matter opening with the technology, which means that fee earners cannot record time unless they’ve accessed the CRM system. “As a result, we haven’t faced the same problems as other firms in terms of persuading partners and fee earners of the value in adopting a structured approach to relationship management,” he says. “We have struggled, however, with issues around the accuracy of data and still have work to do around updating records on a regular basis.” When the success of a system is so reliant on the buy-in and adapted behaviours of those across the firm, it is hardly surprising that many firms have opted to get the behaviours right first before investing in the significant costs of the technology.

It’s all about the culture

The absence of specific CRM software at Stevens & Bolton simplifies the task of assessing what this CRM behaviour might constitute. Shrimpton has sought to impress on the firm that everybody has a role to play in CRM, from conducting service-review meetings to answering the phone. The firm has grouped together those clients that are key to the business and where most of the CRM effort has been focused, but Shrimpton has been keen to encourage CRM activities across all fee-earning teams. “Much of our focus is on key clients and in a lot of cases the client relationship partner is a corporate/commercial partner. The challenge, however, is to get other partners actively involved.” For this, he has employed two strategies:

1. Encouraging a second partner to accompany the client-relationship partner to service-review meetings (which range from once a month to annually, depending on the client’s preferences), which shares the responsibilities of the meeting and provides an opportunity to introduce the client to the firm’s other services;

2. The guidelines issued on client management (for example, on gaining client feedback and, wherever possible, sharing client information among teams) are made applicable to all clients, not just the firm’s earmarked key accounts.

CMS Cameron McKenna has also embraced a wide range of initiatives aimed at improving the firm’s CRM culture, including a key-account programme; client-service, and matter and transaction reviews (conducted by independent consultants); and the creation of industry-sector groups, where the firm seeks to build on its knowledge of the major issues and players in key industry sectors and apply it to client relationships. In common with the other firms interviewed for this feature, Powell says that the technology is supporting the firm’s CRM initiatives by giving it a full picture of its relationship with individual clients, helping to provide structure and transparency to the firm’s client programmes.

Winning buy-in to change

Regardless of the management initiatives or software investment, however, nothing can significantly improve without the buy-in of the firm’s people to change.

“I suspect we are not alone in facing the need to motivate partners and fee earners to spend time on building and nurturing relationships, often with little immediate prospect of return,” says Powell. Murphy also talks about the difficulties of getting lawyers to think like a client. “Most of our clients operate within environments that require continual improvement, whether it be in share price, league-table rankings, or even energy savings. To be their lawyers of choice you need to be close enough to the client to know what their issues are. This remains an ongoing challenge.” Murphy agrees that firms need to move on and adapt to market changes, but a lot of time and energy is required to persuade people of this. “In our firm, we were aware of how our clients’ requirements were developing and how our competitors were adapting to meet those needs, but starting to do things differently (and deciding what it is that needs to be different) is a relatively slow task compared to FMCG or retail.”

Most firms would agree that the worst enemy to progress is an assumption that the current system or way of doing things is satisfactory. But Murphy also points to the seemingly eternal conflict of chargeable versus non-chargeable hours. “Like many firms, we wrestle with the conflict of getting the chargeable work done and making the time to invest in the client, which has a benefit, but is not immediately obvious or directly transferable to the time sheet.”

This particular conundrum still requires the attention of the legal profession, and it touches on some core fundamentals in a firm’s financial management that go beyond the remit of this article, but there are signs at least that training is being put to good use. Gilthorpe says that changes are happening in his firm as its CRM programme continues, but good leadership and training are essential to ensure that progress is embedded into the culture. “As a firm, one of Robert Muckle’s strengths has been the ability to work in teams across the firm – it is a mindset that is essential to successful CRM. We foster this by training across groups,” he says. The training is broken down into small manageable chunks, so it remains simple and focused on how to improve client service and win more and better work. “It is training the lawyers on things that they are interested in knowing,” he adds. Armstrong agrees, saying; “Training has become more important and our business-development teams work closely with our professional-development counterparts to ensure we tap into the expertise of our lawyers and provide them with the right CRM skills to succeed.” Most of all, there seems to be general agreement on the importance of eradicating silos. Data has traditionally been amassed by offices, practice groups, industry groups or key individuals. But many firms are now seeing this fragmented view of client activity as detrimental and are introducing reward systems to encourage more collegiate behaviour. “It is important to publicly acknowledge good examples of co-operative working, as well as to ensure it is recognised in appraisals and remuneration,” says Gilthorpe.

Collaboration and team work: The key to effective CRM

Gaining individual buy-in to change may be hard, but meeting a key requirement of effective CRM by getting lawyers that are used to working independently to work in teams across practices and offices must be the toughest challenge of all. Armstrong builds on her experience to provide some suggestions for success:

1. Invest time and money in getting people together, so that lawyers become accustomed to working with their counterparts from other offices and practice groups;

2. Encourage cross-practice and cross-office collaboration by making funds available to initiatives that serve the needs of multiple constituencies;

3. Communicate with lawyers about the products and services available from other practice areas and work together to recognise the ‘triggers’ to introduce these appropriately to clients;

4. If lawyers work in different time zones, make sure they can access data on the clients in real time, for example, through use of an extranet.

Perhaps this last piece of advice is the best example of the role of technology in the CRM space. As Stephens & Bolton demonstrate, a CRM system is not necessarily essential to an effective CRM programme, but the technology can become an important part in enabling a firm to see through its initiatives in cultural and behavioural change. Roberts says that CRM system failure often comes down to the lawyers not realising the potential or capabilities of their CRM technology. “Lawyers often see CRM systems as an expensive and overly complex way to manage mailing lists – or view them as something that will ‘take over’ the relationship they have managed to build with an existing or prospective client. This reluctance can be overcome by education, experience, and encouragement from the firm’s senior management team,” he says. While undoubtedly right, the experiences conveyed by the contributors to this piece goes further, suggesting that the education and training has to come long before any technology implementation if CRM initiatives are going to be successful. Only then will lawyers have the necessary mindset for team work and collaboration; for cross-selling and knowledge sharing; and for added client-contact activity that will ensure the technology is put to good use.

It has often been said that law firms lag behind other industries in adopting the latest technologies but, in the case of CRM, perhaps this has given the legal profession the edge as it has given law firms time to focus on the all-important cultural and behavioural aspects of effective client-relationship management. And now that the available software solutions have better functionalities than ever before, then firms of the future may be able to enjoy a true synergy of strategic intent and technological capability.