Is ineffective client management affecting your profitability? Find out the reason. Your rainmaker brings in a new client to your law firm. All starts well, however after a whilst the client does not respond to your calls (most of the times you call them), shows dissatisfaction with your services (but does not say it aloud), reduces billable hours (suddenly is too busy with other things) , renegotiates rates (citing economic pressures) and finally actually withdraws legal business from the law firm (probably signed up with your rival). If you find these situations familiar, you probably don't understand what went wrong. Similar, recurring episodes lead to a loss of revenue due to lack of effective Client Management.
Most law firms try to bring in more revenue through new clients. But, after prospects have become clients, they are not managed effectively. What's wrong with most approaches that deal with falling revenues is that law firms often invest substantial time, energy and money in securing clients only to leave the management of that relationship to partners not skilled in maximising the value of that relationship. This leads to lower revenue per client than is possible and also the risk of the client leaving due to dissatisfaction over services, giving way to bad publicity and possible damage to the firm's reputation.
Alarming, isn't it? The facts that competition is increasing and clients are demanding more, require that all law firms reassess their organisational strategies. The outcome of falling law firm revenues lead to issues of profitability and eventually threatens the firm's survival. Don't ignore this until it is too late.
Client management, not case management
One major challenge most lawyers face is that they fail to differentiate between client management and case management. As a lawyer, you are more focused on the case before you. However, the client may need other services that might not be apparent, but could be addressed by your law firm. Once you start looking at clients from an overall perspective, your business development engagement will definitely grow.
Efficient client management supported by technology
Efficient client management is more about a mindset rather than anything else; however it is often confused with the tools that complement the process. The biggest obstacle for effective client management implementation is that it involves a lot of time consuming tasks and, as a busy lawyer; you don't have any to spare. One of the biggest consumers of time and effort in law firms is documents flowing everywhere. Applying technology by using digitisation and computer archival of documents, and providing them to people who need them through the Customer Relationship Management (CRM) interface can lead to productivity improvements. CRM implementation would benefit your law firm in the following ways:
- You can understand your customers and their needs through use of proper recording and referencing of client details using technology, meet their expectations and improve turnaround times. You can also do targeted legal marketing.
- Similarly, by tracking client account's revenue and expense, you could take timely decisions and formulate strategies with analysis and forecast reports using computer based tools.
In a nutshell, effective implementation of client management leads to higher customer satisfaction, greater client retention and ease in getting new clients. Legal services firms that have recognised its importance have implemented client management and are reaping the benefits from it. You must be convinced now that effective client management not only gives your law firm innumerable benefits but is also a key differentiator separating you from your competitors. Effective client management is also easy to implement as is evident from the various leading law firms that have institutionalised it. So what are you waiting for if you have not yet started?
To know more about client management planning, implementation and processes, visit www.legalimarketing.co.uk.
