Every major law firm has a strategic initiative to grow revenue.  A leading source for garnering new business is to leverage existing relationships.  Everyone knows the feeling of developing a potential new client and, after investing thousands of dollars of time, losing that prospect to a competitor.  Three weeks later over lunch, a colleague says, "I know that prospect.  I wish you'd asked me for help."  The most successful law firms are the ones that have the tools in place to know every relationship and access the strongest ones at precisely the right moment.

The Paradox of Large Firm Client Development
One of the great advantages of a large firm is the sheer size of the extended network of existing relationships.  At the same time, the size of the firm makes it impossible for anyone to fully use that network.

When firms were smaller, the partners knew each other well from years of working closely together.  They also knew each other's personal lives and networks of friends and business associates.  Even with all of the tools available today to automate business processes, most firms still use crude methods to obtain information on a prospective client.  An attorney might send a firmwide e-mail, wander the halls and ask each person individually or check a CRM system that contains only a fraction of everyone's actual network of contacts.  These methods for finding relationships and creating introductions to prospective clients do not scale.  As firms grow larger, the problem just gets bigger.

A Better Approach to Relationship Management
For attorneys as well as the marketing and business development teams that support them, enterprise relationship management (ERM) provides fast and efficient access to the extended relationship network of their colleagues.  When they want to approach a potential client, cross-sell services, or just be prepared for lunch with a new prospect, they can check the ERM system and coordinate with colleagues who already have relationships to that target.

With an interface like an online search engine, ERM is easy to use and feels familiar to end users.  Upon entering the name of a person, company or industry, the user quickly discovers which colleagues might have a useful relationship to that prospect.  The ERM system searches various types of internal data including address books, CRM systems, e-mail traffic logs, HR records, marketing databases and more to find all relevant relationships, not just those saved in CRM or address books.  In practice, an ERM system can find four times more relationships than a pure CRM system simply because most of us do not enter everyone we know into even the most successful CRM deployment.

Another important innovation of ERM is its ability to measure relationship strength dynamically.  It's important to distinguish a strong client relationship from a business card dropped in a conference fishbowl three years ago.  ERM uses  e-mail — including the frequency and timing of e-mail messages — address book entries, titles of contacts, calendar appointments and other information that might be helpful in estimating the strength of existing relationships.  This process brings the strongest relationships to the top of the list much like an online search engine brings the most relevant results to the top.

Implementing ERM Is Simple
Initially, the ERM software is installed on an enterprise server and begins to index data.  Within a few days, the database is populated and ready to search.  Like a search engine, ERM does not require any manual data input or upkeep.  It uses existing information on the mail server, CRM server and other sources to maintain a current overview of relationships between employees and their outside contacts.  ERM does not require data stewards and does not rely on attorneys to enter data.  Automation is the secret ingredient that makes ERM successful, even in extremely busy law firms.

An important step in ERM design is to configure the privacy settings to reflect the culture of the firm.  Privacy and public sharing are two goals that have a natural tension between them.  There is an appropriate ERM configuration for every firm, from "super-private" to "share everything."  Speaking with ERM vendors about these configurations can reveal some very interesting settings that may be just right for your firm.

ERM Brings Results from the Start
At least a dozen AmLaw firms have already implemented ERM.  Several have gone on to integrate it with Outlook or Lotus Notes, CRM, time and billing as well as portal software.  This allows users to retain their familiar workflow.  ERM vendors provide many integration tools as standard features of their product.

At one firm, an attorney was searching for relationships to a prospective client during the weeks before their ERM system launched.  He checked the CRM system, sent a firmwide e-mail, asked around the local office and checked with the appropriate industry group.  After several weeks of "thorough checking," he identified 16 relationships to the target.  The IT and marketing staff who were preparing to roll out the ERM system checked for relationships to the same prospect and located 64, including the 16 found by the attorney.  The ERM system had proven its value before it was even launched.

An ERM search at another firm for connections to a large local engineering company (and prospective client) showed the office facilities manager, a long-time firm employee, had the strongest relationship.  It happened that her husband was a senior engineer at the company.  He was able to provide tremendous insight into the goals, operations and personalities of the engineering firm.  As a result, the attorneys had a lot more information to prepare for their initial meetings with company representatives.

Success Is Easy to Measure
Visionary IT executives have been implementing ERM solutions to help generate more new business by leveraging their firm's entire extended network of relationships.  In each case, they have seen user acceptance, adoption and measurable results.  Implementing an ERM solution has enabled their lawyers and staff across multiple offices to search for and identify colleagues who have strong relationships with existing and prospective clients.  Every CIO in the process of examining current business practices and implementing collaboration tools should consider how an ERM solution could have a direct, positive impact on client development and business productivity.

About our author . . .

Geoffrey Hyatt is the Founder and CEO of Contact Networks, a provider of enterprise relationship management (ERM) solutions for professional services firms.  Geoffrey has more than 15 years of experience in management and consulting with high technology and investment firms.  Prior to founding Contact Networks, he was the founder and CEO of Strong Numbers.  He can be reached at ghyatt@contactnetworks.com.