No – CRMs are NOT a Practice Management System 

It happened again. “What’s a CRM, is that what a practice management system does?”   


At Nexl, we have the privilege of speaking with lawyers and law firm from around the world about implementing a CRM platform and after thousands (literally) of discussions, we’ve come to see that one of the largest points of confusion for many law firms is the difference between a practice management solution (PMS) and a client relationship solution (CRM).   


In this article, we will unpack the (1) different applications (2) crucial difference between the two solutions, and (3) why in a world of increased competition, law firms should be investing in not only a CRM but a complete business development platform.  


To start this, let’s break down the modern law firm into two operational cores and see how a CRM and PMS help runs each, individually.    


Front of the law firm. Back of the law firm.  


In every law firm there are two types of client interaction.   


At the front of the law firm, lawyers, marketing professionals and business development initiatives work to develop business from either client prospects, client opportunities and/or client expansion. At the back of the law firm, lawyers, account management, paralegals, and your billing teams will track client engagements for purposes of onboarding, engagement, case/matter updates, deliverables, and ultimately, billing.  


Unlike a PMS – which is designed to support back of the office — a CRM (Customer Relationship Management) system is designed to support your “front of the house” the core revenue driving actions, operationalizing and tracking activities such as: (1) Strategic/Key Account Management, (2) Account Based Marketing, (3) Sales Enablement, (4) RFP Submissions and (5) Events and (6) Brand Building 


TAKEAWAY: CRM are designed to help you turn relationships into revenue generating clients, while PMS are designed to help you manage the matters of those relationships. 

The Key Features Differences Between CRM and Practice Management 


As you can see, the two core functions of the systems are very different – let’s go a few more aspects, specifically around feature, functionality, and data.  


Prospective Client Data Capture 

CRMs typically do not store any critical information related to clients (such as confidential documents) whereas, in a PMS, the data stored is precisely for the existing clients.  


Business Development Automation 

At a high level, the automation features involved in CRM and PMS serve completely different needs.  For example, when a client books an appointment at your firm, a PMS system will automatically notify the firm as well as the lawyer with the details of their appointment.  


However, in the event an important client or relationship is NOT an active client, only a CRM can help you engage that client in a way that may turn into further business etc. 


Analysis & Reporting 

This is maybe the most crucial difference between a CRM and PMS. Though both the tools provide data analysis and reporting, only CRMs can give you insights into the overall business analytics and metrics that allow you to optimize your law firm’s performance on key “front-office” work such as business development, client management and marketing activities (PMS simply focus on client analytics). 


Why would you invest in a CRM…NOW? 


You’re now familiar with the key differences CRMs and PMS systems. Let’s finish by going through some of the key benefits of a CRM….and why they’ve become essential to running your law firm. 


Over the last 10 years — and accelerated by hybrid working — the marketing, business, and client development aspects of a law firm have changed substantially with increased competition for client work (combined with downward client cost pressures) now at all-time highs. 


In this new world, investing in a CRM has gone from a nice to have, to a must-have business system. Let’s list out some of the CRM   


MARKETING ROI: With CRM tracking, your firm can now understand what your highest producing marketing sources are (PMS’s cannot track marketing activity ROI, as it’s limited to client data alone).


WIN BACK: Winning clients who did not retain you is an untapped area of revenue for so many law firms. Unlike PMS systems, all contacts – regardless of client status – are tracked, allowing your team to engage in win-back campaigns and business development. 


TARGETING. Unlike a PMS, most CRMs have (or integrate with) marketing automation software that allows you to send mass messages to contacts in a status. By capturing all contacts, list segmentation can increase law firm conversion rates much faster than sending those leads the same newsletter your clients receive. 


PROSPECTING: Focus your lawyers on the type of clients that matter most. Instead of throwing a net into the ocean and hoping to catch the right fish, CCRM tools — especially those with prospecting functionality – allow your law firm to identify the prospecting clients that have the most potential in retaining you. 


FOLLOW-UPS. Do you set deadlines, reminders and automate tasks with your practice management system? You can use the same type of workflows for your leads too.  


CRMs systems have built-in functionality that allows you to stay top-of-mind and relevant with prospective clients or clients you’re hoping to engage with further.  

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