Is a CRM right for my legal practice? Is it worth the financial investment? Exactly how will implementing a CRM affect my bottom line?
We’ve compiled hard data about legal CRMs to answer those common questions asked by legal practices large and small. Read on to discover the financial implications of installing a CRM at your law firm, so you can decide whether this workload automation tool is right for you.
A Return of $8.71 For Every $1 Spent
According to an analysis of case studies by Nucleus Research, companies across a variety of industries can expect roughly $8.71 in returns for every $1.00 spent. This is a more than $3.00 increase in returns from Nucleus Research’s findings three years prior, where they estimated that the average benefit was $5.60 for every $1.00 spent.
This figure of course depends on how committed the law firm is to using their CRM, training staff, and developing a support system of tools surrounding the CRM (such as social media marketing or focusing on search engine optimization, which can funnel leads into the CRM system).
The Ackert Advisory’s 2015 report on “The State of CRM at Law Firms,” which surveyed 3,000 law firms in the U.S., found that about half of survey respondents claimed that less than 5% of attorneys at their law firms used their CRM regularly (at least once every two weeks). It comes as no surprise that many of these same legal practices also claimed that they couldn’t determine the return on investment (ROI) from their CRMs.
What does this mean? Overall, law firms can expect to see hefty returns for every $1 spent on implementing and utilizing a legal CRM… but only if they use it to its full potential.
Higher Billings Among Smaller Law Firms
When Blue Hill Research conducted an assessment of workload automation technologies among law firms, the organization found that:
- Smaller business law firms that adopted automation technology (such as CRMs) experienced greater total billing
- CRM-savvy smaller general practice firms saw a 9% increase in annual billings compared to the competition that didn’t adopt automation technology
- Smaller litigation firms experienced 14% higher billing when adopting tools like CRMs, as well as a 6% reduction in IT expenses
The data is clear—law practices, especially smaller firms, can see greater revenue from implementing a CRM.
This is true among James Attorney Marketing’s own clients as well; Phoenix, AZ criminal defense lawyer Howard Snader went from receiving 18-25 calls per month from prospective clients to receiving more than 200 calls per month, using the James Legal CRM. His second quarter 2016 revenue was 41% higher than his Q2 2015 revenue!
Lower Marketing Costs (or More Effective Marketing Dollars)
There isn’t a law firm out there that is uninterested in decreasing their marketing spend. Let’s face it—marketing can be very expensive, especially for larger law legal practices that are constantly pushing for more prospective clients or smaller firms on shoestring budgets.
The good news: a legal CRM can shave down costs while making marketing efforts more effective.
- Cloudswave claims that a CRM can cut marketing costs by as much as 23% for some organizations
- Law Journal Newsletters explains that automation tools like CRMs can help law firms track key performance indicators (KPIs) to identify where they are losing potential business, and correct those pitfalls for a better close rate
In fact, by conducting a comprehensive cost-saving audit, James Attorney Marketing discovered that Orange County probate attorney Phil Lemmons was wasting more than $14,000 per month on ineffective marketing and business spending. Now, with the help of the James Legal CRM and its suite of tools, Mr. Lemmons’ marketing efforts are far less expensive and more effective.
Greater Client Satisfaction and a Better Online Reputation
Blue Hill Research also found that a legal CRM helped law firms provide better service to their clients. Smaller general practice firms experienced a 12% higher rate of client satisfaction, while smaller litigation practices “handled 10% more matters with a ‘very high’ rate of client satisfaction.”
A CRM isn’t just about increasing revenue and cutting costs—it also enables law firms to automate time-suckers so they can focus on best serving their clients, which can lead to higher client satisfaction and a better reputation that attracts even more clients.
For instance, Washington personal injury attorney Loren Etengoff (a client of James Attorney Marketing) has seen his caseload double, in large part due to positive online reviews that increase his law firm’s SEO and reputation.
He uses the online reputation management tool included in the James Legal CRM, which automatically sends out requests for online reviews. This enables Mr. Etengoff to spend valuable time on providing great service to his existing clients—the kind of service that makes his clients write such great reviews about his law firm. Now, 90% of new prospects mention the positive online reviews when consulting his practice.