Log in

The State of CRM in 2023: A Symptom of a Bigger Problem

April 19, 2023 5:00 PM | Michele Bisceglie (Administrator)

Authors: David Ackert, MA, CEO and Founder, PipelinePlus | Founding Member, LSSO SSSME BoardDonna Fulmer, Director of Marketing, PipelinePlus

2023 brings many of the same challenges that law firms faced in 2022, like ever-changing hybrid work arrangements and talent shortages. Added to the mix are three exacerbating factors: a decrease in client demand driven by an uncertain economic forecast, the ever-increasing array of technologies vying for market share, and the usual reticence to engage seriously in any endeavor that may come across as “salesey.”

In the wake of these challenges, law firms must find ways to motivate busy, client-focused lawyers to manage their sales pipelines consistently and effectively. In the 2023 State of CRM industry report, we explore the perspective of marketing/business development (BD) professionals from more than 70 US firms as they seek to navigate these business development headwinds.

At the core of our annual research is finding out whether CRM is effective for law firms, especially when it comes to business development. We view CRM as one of the byproducts of a law firm’s business development maturity and its willingness to put effective technology, systems, and operational structures in place to optimize its sales function.

Our research shows that more than 80% of law firms have a CRM solution, but only 20% rate their CRM as “effective” across critical marketing/BD functions, and just slightly fewer rate their CRM as “moderately effective.”

It’s interesting to note that comparing responses by firm types (law, accounting, financial advisory, consulting, and engineering) in our 2023 State of CRM in Professional Services Firms industry study, law firms rank CRM the lowest in terms of effectiveness in multiple marketing/BD functions. 

Of course, for CRM to be highly effective for BD at law firms, it must be consistently utilized by lawyers to manage their pipelines. This year’s results reveal that fewer than 4 out of 10 lawyers at firms use CRM at all, and of them, only slightly more than one-quarter use it regularly for sales pipeline management. 

So, what are lawyers’ main challenges regarding CRM adoption? 

  1. Lack of time
  2. No requirement to use it
  3. High level of data entry
  4. Lawyers’ lack of understanding/care about CRM’s value to the firm

It is notable that a significant percentage of professionals from law firms cite lawyers not being required to use CRM as a key factor contributing to low adoption. 

An additional adoption challenge is a lack of technology integrations. In the words of one of our marketing/BD professional respondents, “We are seven years into our CRM with little to no integration improvements. We’ll likely be searching for a more integrated tool in the near future that will hopefully address our issues.” 

Whether they use CRM for sales pipeline management or not, lawyers must somehow manage their BD efforts. This year’s research shows that more than four out of 10 lawyers still use Excel spreadsheets, paper notes, and Outlook reminders for sales pipeline management. The fact that these disconnected, old-school methods are preferable to CRM demonstrates that firms have a long way to go to help lawyers understand how using a Customer Relationship Management tool benefits its lawyers. 

In our 20+ years of experience introducing BD technology into law firms, we’ve found that if leadership does not play a role in driving adoption, lawyers will not use it of their own accord. Delving a little deeper into the issue of accountability, we asked firms to identify the level of accountability lawyers are held to for using CRM. 

To us, it was not surprising to learn that lack of accountability for using CRM is a top challenge by three out of 10 firms, yet marketing/BD professionals claim that lawyers are held to little or no accountability at nearly two-thirds of law firms. While most law firm leaders would agree that an organized, synchronized approach to business development is important, few are willing to use their social capital to introduce accountability measures that would improve lawyer CRM user adoption. 

Turning to what law firms do to provide to support CRM implementation and who provides it, respondents reveal that the most significant percentage of firms use initial training/onboarding services by their CRM provider, and the second largest percentage use either ongoing training or user adoption initiatives provided by internal marketing/BD teams. 

But adoption efforts don’t end after CRM implementation. The survey asked what tools and initiatives BD/marketing professionals use to increase user adoption. The top three tools and initiatives firms use to boost lawyers’ CRM adoption are: 

  1. Marketing/BD professionals updating their CRM on behalf of lawyers
  2. BD coaching by internal coaches
  3. Regular encouragement from the marketing/BD team

The CRM user adoption tool or initiative the smallest percentage of firms uses is gamification/contests for lawyers. 

Despite the low percentage of lawyers who use CRM for sales pipeline management, we wanted to know what level of ROI marketing/BD professionals get from the CRM. 

Overall, marketing/BD professionals at more than four out of 10 law firms report that CRM delivers little ROI to their firms. The second highest percentage of firms say their CRM delivers no ROI. 

Since over 80% of law firms have CRM, it is clearly deemed a valuable technology, so it’s important to analyze firms that report little to no ROI versus those that report a medium to high level of ROI. The data reveals several key differences. Firms that report medium to high ROI are:

  • Three times more likely to spend $75-500K per year on CRM
  • Four times more likely to use CRM adoption initiatives
  • Three times more likely to hold seller-doers to a high level of accountability for CRM use
  • 60% more likely to use internal or external BD coaching

Finally, we asked law firm marketing/BD professionals to identify their biggest BD challenge. 

According to responses, the biggest BD challenge is that lawyers don’t prioritize business development enough. The second and third most cited challenges are the lack of a strong BD culture at their firms and lawyers lacking the coaching they need to be effective and to hold them accountable.

In a year when client demand is relatively low, it is even more critical that lawyers have the skills and technology needed for business development success. For marketing/BD professionals, aptly arming lawyers in 2023 poses a particularly tough challenge. Tighter budgets mean smaller investments in the resources that yield better ROI, namely sophisticated BD platforms, adoption initiatives, and external coaches that can help drive new lawyer behaviors.

For our full CRM report, click HERE.

And be sure to attend LSSO's 2023 RainDance Pre-Conference, where David and his team will be leading an interactive program for firms interested in revenue growth initiatives.

About the Authors

David Ackert, MA, is the CEO and Founder of PipelinePlus, a highly regarded thought leader and business development pioneer in the legal industry.

Donna Fulmer is the Director of Marketing at PipelinePlus, with +20 years of experience in professional services marketing and public relations.

©2024 Legal Sales and Service Organization, PO Box 1572 Manchester, MA 01944