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Many client relationship management (CRM) products address the specific needs of the legal industry, helping firms with marketing and rainmaking. Although CRM systems have been adopted broadly in other industries, it’s generally acknowledged that law firms have been slow to accept CRM. While there may be a whole host of reasons, one factor hints at the need for an important paradigm shift within the legal industry. Firmwide CRM systems are designed to maximize the firm’s collective knowledge about its clients and relationships. But the notion of collective knowledge is fundamentally inconsistent with how some firms and lawyers are rewarded. COLLECTIVE A successful, firmwide CRM system is the embodiment of the concept of the “collective”: the idea that everyone, working together, will create something more valuable than what any individual lawyer could create working alone. If CRM is to work, law firm management teams must decide — and inculcate — that teamwork is the key to the firm’s success. Lawyers, and firms, must break long-standing habits that reward and reinforce individual practices over cooperative efforts. In essence, this means that culture change is required to make CRM work in law firms. PRISONERS’ DILEMMA Think of the classic prisoners’ dilemma game, where two prisoners accused of murder must each decide whether to confess or remain silent, with their individual and collective fate hanging in the balance. The game is structured so that without perfect information and mutual trust between the prisoners (honor among thieves, if you will), each prisoner has a perverse incentive to confess, despite the possibility of a much better outcome if neither talks. The inevitable outcome of the game is that both prisoners confess and both go to prison for 10 years. The troubling observation for the spectator is that, because of each player’s individual motivation to protect himself, both players are on a collision course with a sub-optimal outcome. This is one of the fundamental principles of game theory: There is a difference between individual interest and collective interest. Each person pursuing his or her individual self-interest can yield a bad result for the team. Compare the prisoners’ dilemma to the problem of new business generation in a law firm, where the interests of two individual partners are pitted against the good of the organization. What is an individual partner’s incentive to share, to seek an outcome that is best for the firm overall? Without a lot of information about the individual benefit of a better team outcome, plus a consistent, repeated experience of collective gain, not much. Without a larger context in which individual merit is defined by a combination of individual and collective achievements, cooperative behavior among professional practitioners might be unnatural. A FEW HYPOTHESES Which leads to a few hypotheses. Maybe one of the reasons for so few firmwide CRM installations is that as an industry we are not using CRM in a broad enough context. Maybe the concept of “client relationship management” is not entirely apt: not broad enough to do justice to the notion of collective benefit, nor to the incentive systems and organizational dynamics that need to be in place for CRM to really work. Perhaps we simply need to better educate users to understand that CRM tools can concretely improve not just the firm’s bottom line, but each individual lawyer’s bottom line. That the whole (firm) is indeed greater than the sum of the (individual) parts. Perhaps when partners really believe that what benefits the firm benefits each individual attorney, CRM will finally catch fire. Matthew DeVoll is chief marketing officer of Elite Information Group, based in Los Angeles. E-mail: [email protected]. Web: www.elite.com.

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