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Legal Case Management Software vs. Customer Relationship Management Software (or CRM)

Purchasing software is challenging for any business. It’s even harder for law firms. But, the latest software is critical for keeping your firm competitive.  

Kory Kelly is a tech entrepreneur who helps law firms use software to increase efficiency and boost profits. He sat down for an interview and helped us understand the differences between practice management software and customer relationship management software, when firms should think about adding to their tech stack, and how to sort through the sales pitches.

Kory tackles the following questions in this blog:

• What’s the Difference Between Practice Management Software and a CRM?
• Should Lawyers Have a CRM?
• What Are the Conditions Where It Makes Sense to Have a CRM or Not?  
• If I don’t Need a CRM, Why Do I Need Practice Management Software?

What’s the Difference Between Practice Management Software and a CRM? 

The difference is internal operations vs external marketing. Practice management tools are focused on making the internal operation of your firm more efficient while reducing the risk of malpractice claims. CRM’s are focused on external communications, allowing you to communicate with prospects at scale.

Both are important, but understanding the different focuses will help make sure your firm realizes a return on its software investment.

Practice management software is easily the more important of the two for a growing law firm. It’s going to help you automate and build systems around things like:

• Billing and bookkeeping.
• Case records.
• Client records.
• Files and documents.
• Filing deadlines.
• Scheduling and appointments.

Customer relationship management systems (CRM’s) are professional marketing tools. 

Once you have a dedicated marketing person on staff, a CRM can help you:

• Build lists of potential leads.
• Categorize prospective customers.
• Send mass marketing emails.
• Track interactions with prospects.
• Use your website to collect contact information.
• Visualize and manage your sales funnel.

As firms grow, they will eventually want both tools. But practice management software is the higher impact application for growing firms. 

Should Lawyers Have a CRM?

In the wider business world, sales and marketing teams rely heavily on CRM’s. Over the last few years, there’s been a push to sell CRM’s to law firms. But the majority of firms don’t need a CRM. 

Most law firms don’t market their services in the same way as other businesses. Outside of large business-oriented firms or very specific AOP’s, clients usually aren't repeat customers in the same way they would be for other businesses. That means the cost to acquire a customer using traditional marketing can get very expensive.  

If law firms are going to pay for a CRM, they should be incredibly intentional. It’s important to make sure you have a clear use case, otherwise, you might be wasting a lot of time and money.

What Are the Conditions Where It Makes Sense to Have a CRM or Not?  

A CRM is a very powerful professional marketing tool. The only reason you need to get a professional marketing tool is if you have a professional marketing hire. Once you’ve hired a marketer, then get them a CRM. They’ll have a hard time doing their job without one. But, if your firm is mostly comprised of attorneys and paralegals, it probably doesn’t make sense to buy a CRM.  

Bottom line, unless you're not investing in a professional marketing department, you don't need professional marketing software.

If I don’t Need a CRM, Why Do I Need Practice Management Software?

Practice management tools are all about operational efficiency. Since 2015 practice management software has boomed. Clio and Practice Panther are two of the most well-known, but there are a ton of options on the market. Some are AOP specific, but broadly speaking they all do the same thing.

Unlike a CRM, there’s a clear pathway to return on investment for law firms that integrate practice management software into their tech stack. It’s the single biggest step you can take toward:

• Reducing the risk of generating a malpractice insurance claim.
• Making your firm more attractive to insurance underwriters.
• Reducing your malpractice insurance rate.
• Streamlining client communication and billing.
• Eliminating missed deadlines and meetings.
• Reduce the workload for your attorneys & paralegals.

If you aren’t using a practice management tool, you will be wasting a lot of money and time when compared to firms who’ve digitized their practice. Failure to adopt the new technology places your firm at a competitive disadvantage.

Wrapping Up

Every law firm needs to have a practice management tool. Period. 

If you are a law firm operating today and you're not using some sort of cloud-based practice management tool, you're already behind in a bad way.  

Most law firms don’t need a CRM. If you’re planning on aggressively marketing your firm through digital channels then a CRM is a great tool. Otherwise, you’re probably better off saving your money for something with a better return on investment.

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Disclaimer

Daniels-Head Insurance Agency (DHIA) seeks thoughts and insights from a variety of individuals and organizations in the industry. The guest content on this blog represents the individual opinion of the author and not that of DHIA. Nor is it the opinion of DHIA’s underwriters and business partners. Neither DHIA nor DHIA’s business partners are recommending, endorsing, or sponsoring any companies, or third parties mentioned in this blog.