In the changing landscape of legaltech, Customer Relationship Management (CRM) systems are emerging as a critical tool for law firms. During our recent Platforum9 Session, Ben Chiriboga, former litigator turned legal tech entrepreneur, shared his insights on the transformation of legal CRM and its implications for the future of law practice.
From Courtroom Drama to Tech Innovation
Chiriboga’s journey from practicing attorney to tech innovator began with an embarrassing client meeting that would change the course of his career. He recounts:
“It was during the summer in Miami. So, you know, it was about 105 degrees outside and, of course, with humidity at levels of 120%. I was still wearing a suit and tie, a wool suit, because I thought that made me look very professional.”
The meeting took an unexpected turn when the client stopped the presentation, saying, “I’m sorry. I have to stop you. The reality is, one of your other partners was here about two weeks ago and completely contradicted what you’re saying to me right now.”
This incident highlighted a critical gap in client relationship management within law firms. “If we’re all honest with each other,” Chiriboga reflects, “this sort of situation has probably come up if you’re in the legal industry long enough.”
The Evolution of Legal CRM
While CRM systems have existed in the legal sector for about 25 years, the landscape has changed drastically. Chiriboga explains:
“Twenty-five years ago in software might as well be 2,500 years ago, based on how quickly software has really developed, and software really has developed vis-Ã -vis CRM very, very quickly over the last 10 years, specifically, and I would say five years.”
The advent of cloud-based solutions like Salesforce around 20 years ago democratised CRM technology, making it more accessible and affordable. However, it’s only in the last decade that CRMs have become truly specialised for law firms, with Chiriboga’s company, Nexl, positioning itself as a “CRM 2.0” solution.
The Power of Enriched Data
The key differentiator in modern legal CRM systems is the use of enriched data. Chiriboga elaborates:
“Because of the availability of data, specifically relationship data and very specifically enriched data, you can use that data to really start to get much better insights from your CRM.”
This shift addresses a historical pain point for legal CRMs: data quality. Unlike salespeople, lawyers aren’t typically mandated to input data into CRMs. The new paradigm leverages technological advancements and enriched data sources to flesh out relationship interactions automatically, reducing the burden on lawyers.
Automated Relationship Mapping
Modern CRM systems can now monitor interactions across various platforms, from email to LinkedIn, automatically mapping these touchpoints and enriching contact information. Chiriboga provides an example:
“When Ron sends Ben an email, a system will know it’s been sent, automatically characterise it as an email, map it vis-Ã -vis all other emails, and even populate contact information about Ron’s work history and current role.”
The Legal Difference: Tailoring CRM for Law Firms
While lawyers share similarities with other professionals, their unique workflows and sensitivities around client relationships and confidentiality require tailored CRM solutions. Chiriboga notes:
“Lawyers are trying to look at the state of the relationship. They’re looking to see who knows who, and then basically they’re trying to just keep themselves apprised of any sort of changes that allow for, in the best case, some sort of cross-selling or cross-service opportunity.”
The most successful law firms today are proactive, leveraging their data advantage to stay ahead. As Chiriboga puts it, “The best law firms today are on the front foot, and they are able to do that because they have a data advantage.”
Managing Partner Perspectives on CRM
In a recent webinar with managing partners from top law firms, Chiriboga identified three key priorities for client relationship building:
1. Consistent follow-ups to stay top-of-mind
2. Tracking activities and their ROI
3. Collaborative origination and cross-serving clients
These priorities underscore the need for robust relationship data and insights, which modern CRM systems can provide.
The Future of Legal CRM: AI and Data Analytics
With Nexl’s recent acquisition of Databall, the platform aims to offer not just relationship data, but sophisticated insights for sector expansion and strategic planning. Chiriboga explains:
“When you couple a system that captures the data and allows you to do actual work on it, you have a complete platform that really allows you to capture data all the way up to see the insights and execute on that data.”
The integration of artificial intelligence and advanced data analytics is set to further change legal CRM. These technologies promise to provide predictive insights, automate routine tasks, and offer more personalised client experiences.
Challenges and Opportunities
Despite the clear benefits, implementing CRM systems in law firms is not without challenges. Issues of data privacy, lawyer buy-in, and integration with existing systems remain hurdles for many firms.
However, the potential benefits far outweigh these challenges. Chiriboga argues that effective CRM implementation can lead to:
– Improved client retention rates
– Increased cross-selling opportunities
– More efficient business development processes
– Better allocation of marketing resources
– Enhanced firm-wide collaboration
The Emergence of a “Legal Economy”
The role of CRM in the legal industry is set to grow. Chiriboga sees this as part of a broader trend towards the “businessification” of law firms and the emergence of a true “legal economy.”
“The trend of a legal economy coming to the entire legal industry, and the industry evolving into an economy, I think is sort of sweeping the world,” Chiriboga concludes. “We have clients from Australia all the way to Alaska and everywhere in between.”
Conclusion
In the era of Legal 2.0, the power of relationships remains paramount. But now, with the right tools and data at their fingertips, lawyers can build and maintain these relationships more effectively than ever before. As Chiriboga’s journey from embarrassed associate to legal tech innovator shows, the legal industry is on the cusp of a relationship management revolution.
By better adapting CRM systems, law firms can not only avoid those embarrassing moments in client meetings but also drive growth, enhance client satisfaction, and stay competitive.
