If you’re a marketing pro at a big firm, I can almost guarantee that you’ve already got one CRM (Customer Relationship Management) program up and running; conflicts management. If you’re at a smaller firm, or are a solo practitioner, perhaps not. The reason many large firms bite the bullet and dive into CRM for conflicts management is because their legal malpractice insurance carrier gives them a break on premiums if they do so. Manage your conflicts well, you’re less likely to suffer a major malpractice suit due to repping both sides of the same issue.
Be that as it may, even those firms with a great conflicts management CRM system in place aren’t utilizing its potential as a marketing resource. Which is just sad. Because most of the information that you need to keep in there for conflicts tracking is also wonderful for cross selling, putting together RFPs, and for starting the core of what I think should be the 2nd major project at any firm looking to get serious about CRM… referrals management.
Did you know that many law practices — even some very large firms – still utilize billing systems based on… Word or Word Perfect? I shudder, but it’s true. They pull the raw data out of their timekeeping software and add it up in Excel, or on a calculator, and pump it all into a word processor. For some of these firms, the need to switch to a modern conflicts management system was the impetus to move to actual billing software, as the conflicts software only came bundled with such programs as Elite? Progress marches on at America’s law firms… dragged kicking and screaming behind the malpractice insurance industry.
If you haven’t begun a CRM program for conflicts at your firm more sophisticated than leaning out your office door and shouting, "Any reason we shouldn’t represent Amalgamated Steel?" it’s time to consider it.
So… Conflicts management seems to make sense, if only for the break in insurance premiums. What other CRM noodles can we push uphill in the law firm environment?
The case for CRM has rarely been made in a language that speaks to the primary goals of attorneys and their firms. Conflict management is the current exception to that rule. In other areas – customer satisfaction, lifetime value tracking, account management, touch-point analysis, revenue history – firms have had less success. Why? As in other industries, firms have purchased expensive CRM packages that aren’t necessarily relevant to their business practices. When the software doesn’t have a "magic" effect on results they become frustrated.
As for most marketing issues, the case for any CRM program should start with well-stated goals. If a firm doesn’t have – and state – a good reason to undertake a CRM initiative, the program is doomed.
The case for having a referral system is, in my opinion, water tight.
If a lawyer or firm can’t take a case, they will often provide referrals to capable attorneys. A firm may be "conflicted out" of a matter, too busy to do the work in the needed time frame, or it may not have the particular expertise the client needs. Whatever the reason, referrals are often considered a "lose/lose" proposition.
Why? Provide a bad referral and your client will be unhappy. Provide a good one and you might be introducing them to a competitor. As one seasoned attorney said to me about referrals, "It’s like paying someone to steal your client."
So if you can’t do the work, and must make a good referral, there’s no way to win. Right? Wrong. You just need better tools for managing that part of the relationship. And that’s where appropriate CRM can be a huge benefit.
In the old days, when an attorney needed a referral recommendation from his partners, he’d stick his head out the door of his office and yell, "Does anyone know a good plaintiff-side employment lawyer in Pittsburgh?" These days, attorneys at large firms may send an email to all other attorneys asking, " Does anyone know a good plaintiff-side employment lawyer in Pittsburgh?" Same process, new technology.
What are the down-sides of this method?
- Time wasted – at a firm of 200+ lawyers, that email may generate an immediate response of 12 emails and 15 calls. It’s a time-intensive process for the requesting attorney as well as those suggesting referrals.
- Incomplete data – the referral information provided by attorneys is often well-meaning but incomplete. A typical response might be a one sentence email of, "Roy McCheswick is near Pittsburgh somewhere, and he’s fantastic."
- Incorrect data – the information as provided is often wrong; people misremember, data deteriorates – all common issues, but ones that aren’t addressed in the "e-shout" method.
- Repetitive tasks – Attorney John Smith may request the above referral on June 1. On July 7, attorney Julie Jones needs the same information. You’ve just repeated an identical task.
- Dismissal of process – the "Does anybody know…" emails go out so frequently, that many attorneys begin to regard them as a kind of internal spam. They don’t have the time or interest to respond.
- Loss of control – this method provides no way of tracking who eventually got the work. As stated before, you give away money – and possibly the relationship – when you make a referral.
- Loss of value –Suppose John Smith refers a piece of work to Firm B. He recommends them to Julie Jones at some point, and she later sends them another piece of work. Unbeknownst to them, Fred Brown also sends Firm B some work. All this work may go to different lawyers at Firm B, so nobody there realizes that John, Julie and Fred’s firm has sent them more than $1 million worth of work this year.
How to improve this system? Begin with goals. They should be:
- Provide more appropriate, more complete and faster referral information to clients
- Save time for your lawyers
- Track and be able to report on which firms get referrals from you
That’s it. Everything else is process. By keeping the goals very short and specific, you can get better buy-in for the program. You just can’t argue with doing something better, doing it faster, and knowing where you’re spending a resource as valuable as referrals.
Your system need not even require a new piece of software. What you will need is a centralized manner of recording, reviewing and providing referral information. My suggestion is that you have a live person be the "contact support coordinator" or "referral administrator" for your firm. The coordinator can gather a standardized data set from attorneys who need a referral, which will give the chance to make sure you have all the information needed to make an appropriate request.
In the early days of the new program it may seem like the system isn’t providing much benefit. If referral information has never been recorded in the past, you’ll need to start from scratch, and that never appears to be an improvement. Over time, as the database grows, referral requests will be met more often with data from past instances. At this point, your system will begin to reap rewards in saved time, improved information and outbound referral tracking.
What information should you gather for a referral database? I suggest:
- The name of the firm and attorney
- All contact information
- A history of who at the firm recommended this referral
- All comments (including negatives) about the referral
- A history of work that had been referred
Over time, as you collect data, you’ll be able to see which firms are the benefactors of your outgoing referrals. This provides a lever when dealing with those firms in the future. In the absence of other compelling reasons, you send work to people with whom you have a good overall relationship; i.e., the folks who reciprocate. If you’re going to give value away to potential competitors, it’s good to know how much you’ve given, to whom, and who has given back.
Vague CRM programs that attempt to collect information for no specific purpose are bound to fail at law firms. Lawyers have very little patience with processes that waste time and produce no real value. If, however, you put a program into place that’s designed from the get-go to save time, produce better results and track a valued firm resource, you’ll be positioned to succeed. It may not be as sexy and fun as advertising and event planning, but data management is an important part of any serious marketing program. Tracking, improving and leveraging your referrals will provide a benefit to the firm, and will help position your marketing department as a more "serious player" in the organization.
Stumble it!