Harnessing the value in your client information (First published in Managing for Success - November edition)

After your legal knowledge and experience, your next most valuable intellectual property is your client and contact data. And yet, this is often neglected in the way that it is managed. 

The expression “big data” has been gaining traction in the media lately as leading brands come under the spotlight in the way that they aggregate and analyse their data to sell more to their customers.  For example, Amazon.com analyses the books that you have bought in the past to suggest titles or authors you might also like to buy, reducing the risk that you will pop into WHS or Waterstones for your next good read. 

Lawyers gather lots of valuable data about their clients in the course of their interactions, but few firms seem to be very adept at collecting this information, analysing it and exploiting it to generate additional business. 

Harnessing your client data more effectively means that you can take a pro-active approach to meeting the future needs of your clients.  This reduces the risk that they may go elsewhere, and will increase their satisfaction as they perceive you to have their best interests at heart. 

Three simple examples illustrate the value in using information identified in one department to generate opportunities for another:

  • with residential conveyancing fees under pressure, firm ABC started to take a systematic approach to identifying unmarried couples and encouraged them to enter a co-habitation agreement and make their wills at the same time;  
  • when clients come in to make a will, firm PQR started to record whether they had any investments in residential and commercial property, then introduced them to the commercial property team;
  • instead of spending money on advertising wills in the local media, firm XYZ took a systematic approach to checking whether they had a record of a will or power of attorney for all company director clients of the commercial teams and then introduced them to the private client team. 

Each of these examples demonstrate how use of information (which was already gathered) can cement a relationship by anticipating clients needs, and can increase the lifetime value of each client.  Each example also requires cooperation across departments, and this seems to be where cross-selling often comes unstuck.  Without an effective system to identify such opportunities, department A may not think it is a propriety to change the way they work to benefit department B particularly when resources are scarce. 

This is why a centralised approach to managing client information and cross selling is required, often known as client relationship management (CRM). 

Centrally managed data also makes it much easier for all marketing activities, such as: 

  • analysing the profile of your client base;
  • analysing which marketing activities generate new business 
  • gap analysis – identifying which clients have the potential to instruct other teams; or
  • producing targeted lists for events and mailings etc. 

To successfully manage your client and contact information, there are four key elements to address. 

Culture of commitment – everyone in your firm needs to understand and appreciate the value of this information to the firm and how it will benefit their team. A systematic and comprehensive approach must be led from the top.  If one senior partner refuses to contribute his or her contacts, then this provides an excuse for others to follow. 

Common approach – you need to agree ‘how’ you will record information and ensure all staff are trained in this and adhere to it. This means getting into the nitty gritty, such as agreeing to record full first name, not just initials, agreeing a set of codes for source of business, defining how company names should be recorded (H.S.B.C. or HSBC; Ltd or Limited?). 

CRM system – you need to decide ‘where’ your data will be stored, and kept up-to-date – we explore the options for this below.

Creating reports – all the above effort amounts to nothing if you are unable to extract the information which you require to identify opportunities and make management decisions.   

Choosing a CRM system to manage your data

The first option to consider is whether your practice management system is adequate.  In an ideal world, data would be kept only once.  However, in practice this rarely seems to work and even the biggest law firms have dedicated CRM systems, alongside or integrated with their billing or management systems.  

Typically the marketing / CRM module is an “add-on” and often seems to have been designed as an afterthought rarely including a simple-to-use reporting facility Firms can end up paying substantially more to extract their own data in a useful format.

Aside from your PMS, you have a number of options. 

A spread sheet – is often adequate for a sole practitioner or small team up to a certain point, but it will only hold contact data and does not track opportunities, a sales pipeline or provide activity reminders without becoming unwieldy. An ambitious lawyer wishing to actively build a network will soon need a more sophisticated solution. 

Having decided that you require a dedicated CRM system, you then need to choose between software which is installed locally on your server or a cloud-based service.  Here, the key issue to consider is how comfortable you would be about putting your contact data in the cloud.  If you have already done this with other parts of the business and have good internal protocols, then it may be a logical next step. 

The main advantage with the cloud-based CRM systems is that you can access them from anywhere at any time.  A small practice which uses Salesforce CRM recently joined forces with a larger firm and relocated their team over the weekend. The only change required was to the login details and partners were able to access their contact data with the same ease at their new desks from 9.00am on Monday morning.

There are many CRM systems on the market and so selecting one can be a time-consuming task in itself.  The online service providers typically entice you with a free trial, on the basis that once you have started to use their system it will be more trouble than it is worth to move to another. 

Most generic systems are designed for all businesses so are likely to include features that a law firm does not need (such as an inventory of products).  Don’t be put off by this as it is usually easy to hide these features and simplification is key to getting maximum buy-in from your team. Make sure you choose one which other law firms are using and ask how easy it was to customise and how satisfied they are with it. 

Take care when comparing costs. Some “free” open source solutions, such as Sugar CRM can actually turn out to be costly if you require a specialist consultant to install and configure the software and reports.  Some of the subscription services are inexpensive at the basic level, but costs quickly mount as user numbers increase. 

Finally make sure that you test the reporting functions fully to ensure that you can get out the reports that you determined that you required at the outset.  With the right solution, you should not be having to pay extra for reports to be written, and you should have the flexibility to interrogate your own client information without learning SQL programming!

Berners Marketing works exclusively until the legal profession, and is offering section members a free copy of a Client Information Data Protocol, which can be used to specify your CRM requirements.  To request a copy email info@bernersmarketing.com

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