Insight into the State of Law Firm CRM

A survey of law firm customer relationship management initiatives at the year’s end 2013.

InterAction®

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2013 Law Firm CRM Survey Executive Summary

Law Firm CRM Initiatives are Mature. 41% of respondents stated their firm’s CRM initiative was more than five years old. Another 23% put the age in between 3 and 5 years. About one-third say their CRM projects are less than a year old.

Law Firm CRM Spending to Rise. 63% of survey takers said their firm will fund additional CRM investments in the next 12 months. 53% either “strongly agree” or “agree” they will upgrade their firm’s existing CRM in the next three years.

Law Firm CRM Seeing ROI; Success. 50% of respondents “strongly agree” or “agree” their law firm is seeing measurable ROI from their CRM initiatives. Absent ROI, when asked whether or not the CRM project was successful, a plurality of 41% said their CRM project was a success.

#1 Barrier to Success is a Lack of Employee Buy-In. 33% of respondents reported “lack of employee buy-in” as the top barrier to CRM success.

The Difference between Success and Failure. Cross-tab analysis suggests firms with successful CRM projects are more likely to implement CRM as a firm-wide, strategic process, that accounts for the human aspects of change management, rather than merely a technology implementation.

Successful CRM Projects Yield Better Client Relations and Cross-Selling. More than 50% of respondents cited “better client relationships” as the primary benefit as the result of a law firm CRM project. Another 48% cite “improved ability to cross-sell.”

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Law Firm CRM Initiatives are Mature Endeavors

Within law firms, CRM projects have been around a while. More than 60% of CRM projects within law firm are three to more years old. By contrast, just a little more than one-third of all CRM projects are less than a year old.

N = 145

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A Majority of Law Firms Plan to Fund Additional CRM Projects

Despite the maturity of CRM projects, law firms are actively considering additional investments in CRM projects, which could span process or technology. Additional data in this survey suggests this investment will come in the next year or so.

N = 91

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Longer Term Investments Center on Upgrades

While the majority of law firms are considering additional CRM-related investments in the next 12 months, most law firms are also thinking long term as well.

A majority of respondents (53.9%) “strongly agree” or “agree” that they will upgrade their existing CRM system in the next three years. The data suggests law firms see the value in investing in CRM projects.

About one-third are unsure if they will upgrade the existing CRM system and roughly 13% appear to be disinclined to update their platform.

N = 91

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Majority of Law Firms Give CRM Projects High Marks

Most respondents – more than half – either “strongly agree” or “agree” their firms are finding a measurable return on investment (ROI) from law firm CRM projects. Just about one-third are unsure, and a minority, about 14% say their firms have not found a measurable ROI.

These results were also reflected in a similar question that simply asked respondents to indicate whether or not they felt their CRM initiative was successful. A majority, nearly 42% classified the project as successful, and about a third, or 36% of respondents said it was either “too early to tell” or were “unsure” if the CRM project was successful. Another 22% state the projects were unsuccessful.

N = 91

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Why CRM Projects Fail

With 22% of respondents saying their CRM projects are unsuccessful, it’s important to take a look at why this might be the case. What are the barriers to a CRM implementation?

The number one barrier to CRM implementation is a “lack of employee buy-in.” Data quality, technical challenges such as integration, and strategy all drew a similar volume of responses.

A lack of leadership drew about 13% of the responses, and which nests with answers citing a lack of employee buy-in. The data points to people or process challenges, rather than technological, as the barriers to CRM.

Just 4% cited a lack of accountability as a barrier to implementation.

N = 91

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Defining the Difference between Success and Failure

What is it that separates successful CRM implementations in law firms from those that fail. A cross-tab analysis provides insight.

The top challenges identified by respondents that label their CRM projects a success include, 1) lack of employee buy-in, data quality and lack of leadership.

By contrast the top three challenges identified by respondents that label their CRM projects as unsuccessful include: 1) integration challenges, 2) no long term strategy and 3) lack of employee buy-in.

The survey indicated that successful projects are more likely to implement CRM as a firm-wide, strategic process, that accounts for the human aspects of change management, rather than merely a technology implementation.

N = 58

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Successful CRM = Better Client Relationships and Cross Selling

More than half of respondents said that “better client relationships” were a benefit their law firm experienced as a result of a customer relationship management system.

Cross-selling, collaboration, and efficiencies gained were all cited as other key benefits. Interestingly, about 20% or roughly one-fifth of respondents cited “improved staff satisfaction” as a primary benefit – a reminder to management that employees really do, by far and large, want to do well by the customer.

N = 91

“better client service from the marketing staff regarding email marketing and event marketing”

(open ended response)

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Economic Effect on CRM Projects

The thinking going into this questions was in this time of this prolonged economic recovery, CRM would be viewed as ever more important for two reasons:

1. More than ever, law firms need to hang onto their existing customers; relationships are one way to reduce attrition.

2. Improved relationships lead to additional cross-selling opportunities.

Elements of these two themes can be found in other responses in this survey, however when asked pointedly if the economy has an impact on CRM projects 44% said the economy has an impact on CRM programs while just 5.5% said it did not.

Additionally about 50% said the economy had no impact on the CRM program.

N = 91

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Survey Demographics and Methodology

This survey of primarily marketing and business development personnel within law firms and was conducted online by LexisNexis from September 17, 2013 to October 31, 2013. The survey was distributed to the email subscriber lists of independent industry trade publications not affiliate with LexisNexis. The source or origin of the survey was not revealed until the after the survey was completed. No incentives for completing the survey were offered other than the option to obtain a copy of the results by email once the study was completed.

N = 91

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Additional Law Firm CRM Resources

• InterAction Webinars and Videos: More than a dozen resources including productions such as “Leveraging Firm Experience as a New Business Catalyst” and “Capturing Success Using Pipeline Tools: New ways to focus sales & CRM adoption.”

• Report: Thinking Like Your Client: Strategic Planning in Law Firms

• Make More Rain Blog Posts: • Lawyers Need Help Looking Good on LinkedIn• Four Ways To Get Users (Lawyers) To Adopt The CRM System• 7 Unique Ways Law Firms Can Breathe New Life Into CRM• 7 Amazing Statistics For Law Firm Business Development

• Social Media:• Join More than 2,000 Peers: InterAction CRM LinkedIn Group• Twitter: @LNInterAction  or @Business_of_Law• Facebook: LexisNexis Business of Law