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stop me if you've heard this one. A lawyer and a software developer walk into a boardroom and come out with a program that revolutionizes the way professionals manage relationships with contacts and clients.

Sound familiar? Probably not to most businesses, because it's CRM with a twist. The scenario describes customer relationship management that transcends the traditional customer-product-sales force model. Instead, it focuses on an industry many don't think of when discussing the need for improved communications with clients. But many professional services firms--lawyers, accountants and the like--are becoming increasingly aware of the need to enhance relationship management and the benefits of doing so.

"If you look at pretty much the entire CRM marketplace, all of it stems from the sales force automation and contact manager kind of model," says John Lipsey, director of communications for the Illinois-based CRM vendor Interface. "It's all very good technology and the companies that use and implement it get a lot of value, yet the issue is still that all these tools are designed toward your traditional corporate sales model. We have another sector of our economy that doesn't follow that business model, and it's called the professional services industry."

Before Its Time

California-based law firm Jeffer, Mangels, Butler & Marmaro is a member of that sector that recognized the need for a database of clients and contacts in the early 1990s, before such programs were even being developed. The firm, with offices in Los Angeles and San Francisco and a newly opened satellite office in Las Vegas, understood that tracking and keeping clients is key to growing a successful firm. At that time, JMBM used a WordPerfect Notebooks system that allowed each of the firm's attorneys to store client information. Later, the firm's Information Services department created its own centralized database when the contact file of one partner, Jim Butler, became too large for the Notebooks system.

While this system met the firm's basic needs, it was nonetheless problematic, says Heather Milligan, JMBM's assistant manager of marketing. "It was basically individual Rolodexes that sat on individual desktops of the attorneys," she says. "They were networked, but none were linked, so each [attorney] had his own individual record."

It made for, says Milligan, "a marketing nightmare. If we wanted to do a mailing, five different attorneys could say, 'I want this person to receive this mailing,' and we had no way to check for duplicates."

Plus, she says, there was no way to cross reference the lawyers' databases to check addresses for accuracy, which made for big headaches when clients switched offices or phone numbers. If only one of the attorneys updated his or her client list, mailers would continue to go out to the incorrect address listed in the rosters of the three or four attorneys who didn't update their files. "It had the potential of showing disorganization in the firm," Milligan says, "and it could cause embarrassment."

But another issue dogged the homegrown model, as well. Butler, the partner whose extensive use of the system prompted IS to develop its own application, had outgrown the database's capabilities. Butler alone--who Milligan describes as an "uber-marketer"--managed more than 14,000 contacts on the in-house system. He occasionally wanted to share his information with other attorneys--and vice versa--and the in-house system didn't easily offer that option. "We knew he had outgrown the use of our database," Milligan says. "We wanted to purchase a new program for him, but we wanted one that could be used for the rest of the law firm, as well."

Enter InterAction

So JMBM went shopping for a solution. Almost immediately, the firm chose InterAction, a relationship management application from Illinois-based Interface Software developed especially to meet the needs of companies that call their customers "clients."

"Interface was one of the first that came to us to demonstrate its program," Milligan says. "We immediately settled on InterAction because it is capable of the things most important to us: It was able to handle [Butler's] contacts, and it met the needs of the rest of the firm. It was one centralized database, and it allowed us to get rid of all the duplication."

Lipsey says it's no wonder InterAction met JMBM's needs. The application was developed after extensive research into the needs of the professional services industry. Interface used customer interviews, focus groups, usability studies and surveys to build the enterprise relationship management solution with tools specially geared toward the requirements of client-based organizations.

To understand how InterAction varies from other CRM applications, Lipsey says it's first important to understand how legal and professional services differ from the typical sales organization. One of the most obvious is the lack of a traditional sales force. Even though they have something to sell, professional organizations don't rely on a team of road warriors to do the selling.

"Professional organizations still have to become effective marketers," Lipsey says, "but it becomes the fundamental responsibility of each individual professional in a firm to market his or her own practice, to network, to develop relationships. They create their own client bases, and through that development of business, they add value to the firm. Through this process, something kind of strange begins to happen. You begin to have this organization whose product is the knowledge, experience, wisdom and judgment of individual members of the firm."

In addition, Lipsey says, the "products" themselves--the firm's professionals--then become responsible for selling their own services through interactions with clients and others on a daily basis. Understandably, however, attorneys and other professionals don't think of themselves as salespeople. "You have this highly educated group of individuals who are very busy and whose time is very expensive," he says. "Their primary responsibility is to deliver their services to their clients, not go out and look for business."

Couple these dynamics with the fact that professionals don't want to spent a lot of time at their desks learning new technologies, and it makes for an interesting challenge for the firm hoping to implement a relationship management solution.

According to Lipsey, InterAction was developed specifically to meet those challenges. Concerns such as the fiduciary responsibility of professional to client, as well as a professional's need for security were factored into InterAction, as well, Lipsey says. "Whereas most CRM tools provide you with a certain level of security to make information about a client private or public, when you're talking about a fiduciary responsibility, the need for security becomes much greater."


InterAction leverages Microsoft's Component Object Model and Active Server Pages to create its n-tier, client-server architecture. The centralized database can be accessed by all authorized firm members, which makes it easy to store, track, manage and share client and contact relationship information.

The centralized warehouse is key for many large firms, Lipsey says, as it allows for different professionals to keep better tabs on clients. "What they need is a tool that allows them to uncover the subtle relationships between law firm members and clients and prospects and all the relationships prospects and clients have with each other," he says. "It's kind of like six degrees of separation. It's putting two and two together."

Once a prospect or client is targeted, InterAction's "Who Knows Who" feature lets users click an icon and uncover others in the operation who might have contact with that user. Another feature, called Related Personnel, lets users discover who else in a firm might know a prospective client or contact, either through a professional or personal affiliation.

InterAction lets users store notes and create custom classifications and fields so that all information about contacts can be easily stored and retrieved. "Really what we're talking about is providing that transparency of relationships that enables professionals to get an edge on the information they have about clients and contacts and use that to drive new business, to discover relationships that will lead to business," Lipsey says.

And, to make things easy on the busy professional who doesn't have time to update the computer system constantly, InterAction features "passive data collection" and automatically updates the database whenever new information is added. The system automatically manages the process of duplication checking, submissions processes and security.

Other InterAction features include seamless integration with mission-critical applications such as word processing, e-mail, fax, and even financial and human resources management systems. For the mobile professional, InterAction offers remote access via a mobile database, integration with Palm computing platforms and Web-based access.

Marketing Dream

InterAction implementation at JMBM began in January of 1999, with Butler as a test case. By September of that year, the firm had begun the full conversion process. Milligan estimates converting the data to InterAction took about two weeks, but the firm allowed about six weeks for staff training and other factors associated with implementation.

Today, roughly 300 users--including attorneys, secretaries, administrative assistants, paralegals and marketing professionals--use InterAction at JMBM, Milligan says, and the system is used extensively. "We use it for everything," she says. "A lot of times we'll get an e-mail saying, 'Does anybody know anybody at this firm or that firm?' Within a matter of seconds we can pull up 20 names of attorneys and contacts within this company."

One of the best improvements for Milligan has been the ability to wake up from her "marketing nightmare"--especially when dealing with mailing lists that can vary from 900 contacts to as many as 13,000. "It's a cleaner system," she says. "When I know I have a mailing coming up, it doesn't take me long to prepare the mailing list. It doesn't even take an hour, whereas before it would be an extensive, drawn-out, several day process."

The system automatically checks for duplicates, cutting down on the time Milligan spends managing the database. She estimates that the previous system contained as many as 50 percent duplicate records, which were virtually impossible to catch. "Now, I go in and make sure whoever inputted the address inputted it correctly, and I only do that on a weekly basis," she says.

She estimates the firm has made a tidy savings on the cost of mailings and announcements alone, not to mention the savings associated with the staff time that has been streamlined. Prior to InterAction, Milligan dedicated one full-time staff person to constant database maintenance. Now, that employee has been freed to work on other projects. "It's a time saver, which is the biggest thing for me," she says. "I don't live my life working 100 percent of the time maintaining a database, and it frees up for me at least one employee's time."

Others have felt InterAction's benefits at the firm, as well. Attorney David Waite, who specializes in environmental and land use issues, uses the system to organize his clients and contacts. He uses InterAction mainly to sort and search his contacts, and gives the program high marks for its ease of use and ability to deliver the exact resource he asks for. "You can create searches and come back with a virtual universe of matches for the kind of people you want," Waite says.

Search geographically if you want contacts who live in a specific area; search by profession if you're seeking to target a specific group; search by name, title or specially designated code. "You decide how broadly or narrowly you want to define the search," he says, "because you can be looking at literally thousands of names."

Waite's primary use of InterAction comes when he's hosting seminars and other events and he wants a list of the right folks to invite. "I'm able to go right to the people I think might be interested in the information," he says. "This is something that's very powerful, and it's very much a time saver."

After using InterAction for one year, Milligan says the firm continues to be pleased with the application. Interface representatives visit the firm on a quarterly basis to discuss the system. "We let them know what's working and what isn't working, and they immediately implement the changes into the next version," she says. "They are constantly upgrading the software. We come up with a problem; they come up with the solution."

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