Increasingly, law firms are finding their clients, such as banks, pharmaceuticals, financial services firms and manufacturers, have grown into global organizations by acquisition, merger and organic geographic expansion.  According to Thomson Reuters, cross-border corporate merger and acquisition activity increased 14 percent a year between 2002 and 2007, with 9,500 deals completed last year. 

To service these companies, law firms continue to globalize at an equal pace.  In the last five years, the largest AmLaw firms have added, on average, eight offices in four countries.  Reed Smith LLP, for example, grew from a regional mid-Atlantic firm to become a global leader with offices in London; Paris; Geneva; Munich, Germany; Piraeus, Greece; Hong Kong; Beijing and Abu Dhabi, and the number of employees exploded from 434 to 5,251.  In a post on the blog Adam Smith, Esq., Greg Jordan, global managing partner said, "Our key clients are all going global, so our response has to be to be where they are, not to stay in our comfort zone in Pittsburgh."

The Complexity of Keeping Pace
Strong relationships between the law firm and the client will, in large part, determine which firms gain market share and which do not.  Global law firms still need to act as a tightly-coordinated "one firm," just as they did when their offices were in a single time zone, even though their relationships now span multiple continents, offices, and practice areas staffed by many times the number of employees.  Organizational complexity, in terms of coordination, is now clearly much higher.

There are six areas that challenge your ability to manage and leverage the data involved with global relationships:  size and scope, remote offices, language, mergers and laterals, culture and local laws.  All of these challenges are not unique to global firms, but as firms spread around the world, these challenges increase in complexity and must be actively addressed in order to overcome them.

While a customer relationship management (CRM) system can help you manage your contacts, it can be worth investigating other software options that go beyond this to help you manage the entire relationship across a global field.  An enterprise relationship management (ERM) system, for example, can enable a firm to understand its extended relationship network in order to leverage strategic relationships to grow business in every office.  For those not yet familiar with ERM, these systems analyze internal data including address books, CRM systems, e-mail traffic patterns, human resource records, time and billing systems, phone switch records and more to understand and map all relevant relationships.  Whether yours is a global firm or a regional firm with aspirations for growth, you may experience these data challenges, and an ERM system may fit your needs.

Size and Scope
Based on recent relationship benchmark analyses, a typical large U.S. law firm with one thousand employees will have an average of 1,250,000 relationships with 750,000 contacts at 35,000 companies.  For example, at one large law firm, there are 1,253 attorney relationships to 557 contacts at just one of the firm's larger clients.  On average, 32 percent of these client contacts are outside the U.S.

It is not possible for anyone in the firm to know of all of the relationships the firm has around the world.  Each day, hundreds of new relationships are formed with clients and prospects.  Trying to map the relationships of thousands of employees in offices and practice groups worldwide to even a single large global client which also has employees, divisions and offices around the world is an incredibly complex task.  Mapping relationships to every client and prospect firm is not possible without an advanced technology solution.

With systems that require manual entry, users may not do the work necessary to keep relationship information up to date or complete.  An ERM system can automatically capture and map relationships, regardless of the scale of the implementation, without the need for manual data entry.  By understanding "who knows whom," ERM systems can answer critical relationship management questions and help tackle the more complex relationship issues, such as "which of our clients might be most at risk" or "which clients are not receiving well coordinated service."

Remote Offices
As firms expand, they often find themselves with several sub-scale offices that are located far from the core of the firm.  These are either new offices that have yet to grow and mature, or offices that provide a presence in a particular geography for client service or strategic reasons.  Small, remote offices have great difficulty being in the daily pulse of the firm.  They typically feel that they have been provided a brand and some back office support, but very little in the way of client development assistance.  They do not have easy access to the firm's network of relationships, even though firm partners are normally willing to lend that assistance if asked.  Remote offices need an efficient way to tap the firm's relationships, so they can know if and when they could leverage their partners for key introductions.

To manage global relationships on a location-by-location basis, the ability to pinpoint contacts within a specific geographic location is vital.  An ERM system takes a two-pronged approach to better understand relationships and geography.  First, it employs algorithms to determine the most likely address of a contact, without requiring additional user input.  Then it uses geo-spatial mapping to allow users to specify searches by distance from any location, because common U.S. search types such as "state" and "ZIP code" do not work in many locations.

Language
Firms often attempt to enhance relationship management with a CRM system.  CRM allows users to enter their contacts into a communal repository.  Typically, these are entered in English (or other primary language of the firm).  However, the ability to enter, update, match and categorize companies and contacts in a CRM system is highly dependent on the user's English proficiency and ability to apply it to the nuances of the CRM system.  The ideal relationship technology solution must be able to do these processes automatically to avoid the data problems with CRM that become severe as non-native speakers are added to the system.  An ERM system can automatically capture and organize data, which means it can be consistent regardless of the nationality, language and fluency of each attorney.  The outcome can be more relationship data with higher quality.

Mergers and Laterals
Collaboration within even a single, large office is difficult; collaboration across time zones and continents requires dedicated tools that allow one colleague to tap the knowledge and relationships of another.  This promotes the synergy, interaction and trust required for effective integration.

Bringing all relationships into one shared system allows attorneys to identify colleagues they don't yet know who have important pre-existing relationships and collaborate on building those into new business opportunities.  An ERM system can allow law firms to establish processes to ensure new laterals know of the firm relationships most relevant to their specialty, and, in turn, the firm is aware of the relationships now made available by the new member of the team.

Culture
Just as the culture of each law firm is unique, so is the culture of each office.  The multi-national reach of a global firm makes these cultural differences even greater.  And cultural differences make the sharing of relationships, which requires trust, even more difficult.  To overcome this, the firm can either mandate one culture for everyone (is mandating culture even possible?), or acknowledge some level of localization while deploying a relationship management system that allows each attorney or office to adjust settings to match its culture, and adjust those over time as they converge with their global colleagues.

An ERM system can provide flexible information-sharing settings, from extremely private to fully open.  Each user or group of users can be set individually, and they can each be permitted or denied the ability to further adjust their settings.  Because of this flexibility, there can be an appropriate configuration for each user, office and firm.

Local Law Challenge
A relationship management system must conform to local laws.  Most notable are the European Privacy Directives that dramatically restrict the sharing of personally identifiable data without consent of that contact.  Personally identifiable data include the phone number, e-mail or even name of a contact.  Technically, this may make it illegal to enter a business card into a shared CRM repository.  A firmwide relationship management system must have settings that allow it to meet local legal requirements in Europe and around the globe.  A worthwhile ERM system should be designed with current European privacy laws in mind and should be configurable to be fully compliant.

An ERM system can be a useful data management solution for firms as they expand globally and nationally, and each firm should consider its own needs and challenges as it grows geographically in order to pick the right tool.  Understanding the typical challenges a globalized firm can face may help you predict your firm's own weak spots and choose the best data management tool for its needs going forward.

About our author :: :: ::

Wilbur Swan is Vice President at Contact Networks, a provider of enterprise relationship management (ERM) solutions for professional services firms and a business unit of Thomson Reuters.  Wilbur has over 20 years of experience in marketing and professional services.  Prior to Contact Networks, he was a co-founder and Vice President for Business Intelligence Advisors, a research firm for investment firms.  He can be reached at wswan@contactnetworks.com.