How to Build a Successful Client Relationship Management (CRM) System

  • June 25, 2014
  • Edward Poll

Client Relationship Management (CRM) is the latest term for a tried-and-true marketing truth: The key to business development success is building relationships with potential clients.

In a law firm, where organizational business development should be the sum total of each lawyer's personal contacts, online technology has the potential to bring consistency and efficiency to what used to be a haphazard process.

Shared CRM databases on computer desktops can make available to all firm members the personal data and contact history of any prospect—the type of information that used to be stashed away in individual Rolodexes, address books and, worse, only in the minds of certain of the law firm's lawyers.

The problem is that the culture of too many firms does not support the potential that CRM technology offers. In many firms, territorial partners guard client information rather than share it because compensation and governance remain highly individualized. Such firms are, as one marketing consultant used to say, little more than "hotels for lawyers"—individuals sharing the same facility, with little stake in each other's success. For CRM to work, these firms must give up the "my client" mentality in favor an "our client" approach—a task easier stated than accomplished.

CRM Functions

In simple terms, a CRM database centralizes a firm's collective knowledge, wisdom and experience about clients and prospects, and makes it available to all authorized users—from attorneys and marketing professionals to administrators and secretaries.

Every relationship interaction by any attorney becomes an opportunity to add information to the database as a means to track marketing activities, cross-reference practice services, expand contact networks and reinforce contact relationships.

Two of the most widely used CRM databases are Thomson Financial's Elite system and LexisNexis Interaction. Both are enterprise software that can be installed on all desktops in a firm. They are populated by entries into data templates that often are customized according to each firm's needs with data fields incorporating information that covers both clients and contacts.

All entries would have basic information like address (physical and email), phone number, individual contacts, and industry codes. Client entries would include the name(s) of the responsible firm attorney, fee information, and matters performed.

Crucial for both client and prospect entries is the history of every business development activity undertaken with them by the firm and its attorneys—lunches and golf outings, seminars and newsletters, personal visits and new business pitches, etc. Information can be entered and viewed by anyone authorized to do so. The idea is to free client service and client development from compartmentalization and place the emphasis where it belongs—on the client or prospect.

CRM Implementation

There are obvious technical questions that must be answered at the start of implementing a CRM system in order for it to function with any degree of success:

  • What data is to be included?
  • What data can be modified (for example, should some fields, such as address, be off limits to change by casual system users in order to maintain integrity of the data)?
  • Who is responsible for seeing that the information is kept up to date?
  • Who can access, modify and enter information?

These technical questions must be addressed before CRM implementation even begins. You cannot create data fields haphazardly, see how the process works in practice, and then try to reorganize the information after the fact.

Best practices require every firm, large or small, to create a standard classification system for every item that is inserted in a client or prospect record. Entering "golf date" does not tell anyone what took place or what it means for the business relationship.

CRM Acceptance

By far, the larger issue for CRM effectiveness is cultural rather than technical. Lawyers at many law firms live in a system in which they "eat what they kill" and therefore don't want to share information on clients or prospects with other lawyers who they fear might "steal" business.

Partners in many firms vigorously defend their rights to autonomy and individualism, well beyond what is common in other professions. The problem with this is that clients and prospects want to do business with firms that will serve them with effective cross-office and cross-disciplinary teams.

An effective CRM system will facilitate such service, but the low trust environment in many firms undercuts it. Consultant David Maister, in a recent American Lawyer article titled "Are Law Firms Manageable?", quoted an unnamed partner who summarized the roadblock attitude:

"It's not that I don't trust my partners . . . It's that I don't want to have to trust them. Why give up any degree of control over your own affairs if you don't have to?"

Any firm that encourages lawyers to maximize their individual compensation may have fast short-term growth. But a willingness to approach business development and compensation as an institution makes for firm longevity. Perhaps it takes the entrepreneurial spirit to get a firm started; but the ongoing challenge is to change that into a managerial spirit, something that proves difficult for too many firms. An effective CRM system can smooth the way to that transition.

CRM Advantage

Here is just one example of how CRM can work in a law firm:

When rainmakers hit 65, they slow down and their referral sources retire. Meanwhile, the next generation of partners has been accustomed to inheriting business and lacks marketing contacts.

Before a senior rainmaker leaves active practice, a law firm can create a huge competitive advantage for itself by proactively using CRM data to encourage succession of clients from older to younger lawyers.

CRM contact records can be used to develop cross-selling opportunities among younger lawyers according to an overall firm strategic plan with opportunities targeted to individual lawyer plans.

Relationship information that might have been hidden away in the retiring rainmaker's files becomes the foundation for a smooth transition. The firm, the lawyers and the client or prospect all benefit.

A CRM system allows contact information to be organized into networks or portfolios. These may include everything from active clients to professional referral sources (bankers, CPAs, consultants) who may not become clients themselves but who can make referrals to those of their own clients with whom a relationship can be built.

CRM thus moves business development from "random acts of golf and lunch" to a systematic process that identifies the people most likely to hire the firm and facilitates communication with them to develop close working relationships. There is no single personality type necessary to be a rainmaker or to successfully attract business to a firm. CRM, properly used in the right environment, enables everyone to be a rainmaker.

Edward Poll ( is a certified management consultant and coach in Los Angeles who coaches attorneys and law firms on how to deliver their services more profitably. He is the author of Attorney and Law Firm Guide to the Business of Law: Planning and Operating for Survival and Growth, 2nd ed. (ABA, 2002), Collecting Your Fee: Getting Paid from Intake to Invoice (ABA, 2003) and, most recently, Selling Your Law Practice: The Profitable Exit Strategy (LawBiz, 2005).