As appeared in The American Lawyer on June 13, 2024.
“We bought top-of-the-line software with all the bells and whistles. We expected it to track of all of our clients, prospects, alums, pitches, and data. But it just doesn’t work.”
Bring together 10 or more lawyers, and you have a law firm that needs technology and process management to operate and function without chaos. And when marketing comes into focus, a well-funded marketing department is no longer a luxury but a necessity.
When I get brought in to assess a firm’s marketing/business development department, one of the first questions I ask is, “What does your marketing tech stack look like, and how is it supported?”
Adequate investment, especially for marketing technology, enables departments to function effectively. Unfortunately, this funding is often insufficient. Technology without support is like installing a lightbulb in a home that has no electricity.
According to ALM’s research, marketing and business development spending for law firms is, on average, 2% of gross revenue, while for general industry, it is reported to be anywhere from 7% to 9%. Perhaps if every firm leader understood that CRM systems are more than marketing tools, it might be different. Run properly, a CRM is a firm tool that integrates with and supports a firm’s financial management, crisis communications, and risk analysis.
Despite substantial investments in software, the potential benefits of these tools remain untapped without the proper funding for personnel, training and specific rollout plans to affect change management.
Instead, we hear lawyers say, “I don’t know why I can’t get a copy of last month’s pitch or an updated list of what other deals we’ve done in the shrimp fishery industry.” Without the proper systems supported by the right type of processes and people, it goes back to the lightbulb without electricity.
The Necessity of Budgeting
Consider the fictional example of Half & Baked, a midsize law firm that invested $500,000 in a state-of-the-art CRM system. The firm recognized the potential benefits of having a centralized platform to manage client information, track interactions, and enhance client relationships. However, H&B made a critical mistake: they allocated a budget to purchasing the CRM system without considering the additional costs required for successful implementation and operation.
The Questions to Ask
Buying these technologies sometimes seems like purchasing a magic wand—and I admit, some of these products are miraculous in what they can do, not only in terms of tracking, but in providing analysis, insights and integration into other systems. Yet prior to making the purchase, firms should ask themselves several questions:
- How will we staff the system’s operation? Do we have someone with the time and expertise at the firm, or do we need to go out and hire? Will we need data stewards to support the efforts, and do we have a plan to find and train them?
- Is there a workflow designed to get our data input, updated, and refined for use? How do we plan to handle the essentials of change management, the internal selling and support of the process?
- Who needs to be trained on the system? Hint: Different types of training may be required for different categories of lawyers and professional staff. Do we have the resources, or can we get them through outsourcing? What about our future training needs for new firm hires? Will the company providing the software help us solve this issue?
Even if the system promises to do the work without a great deal of staffing or to utilize revolutionary AI to provide business insights, will it do that without human involvement? Likely, it won’t.
So what are the consequences for the firm of Half & Baked?
If the firm doesn’t hire a dedicated CRM manager or additional marketing staff to handle the new system, trouble ensues. Already stretched thin, their existing staff struggles to incorporate the CRM system into their workflows, no one leads the effort, and the system fails.
Without training plans in place, partners and staff can’t operate the CRM or other marketing technologies. Without providing comfort in using the system or understanding how ultimately it will make their work life better, they see low adoption rates. Many lawyers end up reverting to their old behavior by clutching their “own” client contacts, past pitches and deal lists.
Ultimately, the $500,000 investment in the CRM fails to yield the expected returns. The firm struggles to manage client relationships, and the CRM system became an expensive, underutilized asset.
But with integrated support and a rollout plan, the CRM system could become a source of ease and efficiency. It saves time and energy, and allows the firm to do more analysis on where their clients are coming from and who they know at various prospects.
The Right Approach: Comprehensive Budgeting and Plans
H&B’s experience highlights the importance of a comprehensive approach to budgeting and planning for marketing technology.
To avoid such pitfalls, law firms should consider the following steps.
Think holistically about budgeting: When planning technology investments, include costs for implementation, training, staffing, change-management activities and ongoing support. A CRM system’s actual cost extends beyond its purchase price.
Invest in people: Hire skilled personnel to manage and optimize marketing technologies. Based on the technology you are purchasing, this might include CRM managers, digital marketing specialists, or data analysts. If you are planning to utilize existing staff, know that the investment needs to be made in teaching them the intricacies and potential of the software.
Understand change management and prioritize firmwide training: Ensure all relevant staff receive thorough training on new technologies. This will not only improve adoption rates but also maximize the system’s effectiveness.
Ongoing evaluation and support: Regularly review and update technology investments to ensure your stack of tools continue to meet the firm’s needs. Provide continuous support and training to adopt new features and updates.
A well-funded marketing department equipped with the latest technology and skilled personnel can deliver substantial returns on investment. Automation tools can streamline repetitive tasks, allowing marketing staff to focus on strategic initiatives, and analytic tools enable law firms to make informed decisions, optimize campaigns, and improve ROI.
Highly operational marketing departments are crucial to a law firm’s success in the modern legal marketplace. Adequate budgets, particularly for technology, are essential to empower these departments to perform effectively.
By adopting a comprehensive approach to budgeting, law firms can ensure that their marketing and business development departments are equipped to drive growth, improve client relationships, and enhance their overall reputation.
