CRM system
Definition and classification
A CRM system (Customer Relationship Management system) is a software application that assists companies in managing and maintaining relationships with clients and other contacts. The term CRM stands for “Customer Relationship Management.” CRM systems offer a wide range of functions for capturing, organizing, evaluating, and providing information generated during client and law firm work. They help manage contacts in a structured way, document communications transparently, and make business processes more efficient.
Unlike traditional address databases, CRM systems combine numerous tools for central management of client and project relationships as well as their history. As such, they have become indispensable in many industries, including day-to-day law firm operations.
Role in Everyday Law Firm Operations: Significance and Typical Use Cases
In daily law firm operations, a CRM system supports the structured management of client data, communication histories, and contact requests. It serves as a central information source for employees and enables fast access to up-to-date information on ongoing and completed client matters.
Typical use cases include:
- Client data management: Uniform recording, maintenance, and updating of contact details, including address, phone number, email address, and other relevant information.
- Communication history: Complete documentation of emails, phone calls, meetings, or written exchanges with clients and business partners.
- Deadline and task management: Management of deadlines, reminders, and tasks, which can be assigned to individual cases, persons, or teams.
- Client acquisition and marketing: Support for targeted outreach to potential clients, execution of campaigns, or sending out newsletters.
- Reports and analyses: Preparation of overviews, statistics, or reports to monitor workflows and analyze client structures.
Processes, workflows, and methods in connection with CRM systems
The CRM system digitally maps various processes and workflows. Key methods include:
- Centralized data entry: All relevant data and documents are stored in a common application and are accessible at any time to authorized staff.
- Workflow support: Tasks, appointments, and deadlines are automatically generated, assigned, and—if necessary—reminded to responsible persons.
- Automated communication: Mail merges, reminders, or status reports can be sent directly from the system to clients or internal team members.
- Case history: All previous steps, measures, and communications regarding each client matter are stored in the system and can be viewed at any time.
- Interface integration: Modern CRM systems allow integration with other law firm software, such as file management, time tracking, or billing.
The use of a CRM system fosters collaboration among all parties through transparency and traceability.
Framework requirements and standards
The implementation and use of a CRM system require certain organizational and technical prerequisites as well as compliance with standards:
- Access rights and data protection: Only authorized individuals are granted access to sensitive data. Compliance with data protection regulations, such as the General Data Protection Regulation (GDPR), is mandatory.
- Regulation of access rights: Precise assignment of access rights controls who may view or edit which information.
- Regular data maintenance: Continuous and careful maintenance of the data stored in the system is essential to ensure its accuracy and currency.
- Technical infrastructure: The use of a CRM system requires suitable technical infrastructure, including devices, high-performance networks, and regular maintenance and updates of the CRM software.
- Training and documentation: Employees should be trained to use the CRM system efficiently and safely. Clear instructions and standardized workflows are recommended.
- Archiving obligations: If necessary, certain information and documents must be archived in accordance with statutory requirements, which can be supported by the CRM system.
Practical relevance: Using the CRM system in everyday work
In daily law firm operations, employees regularly access the CRM system—for example, to search for current contact data, record documentation, or track the status of a case. New client matters are generally created directly in the system, including all relevant data and documents. Persons handling the matter add memos, record meeting notes, or maintain incoming and outgoing correspondence.
Team members coordinate their work via shared task lists and keep up to date with progress. Deadlines and reminders are maintained and planned in the system so that no important dates are missed. Collaboration with other departments or external service providers can also be organized via the CRM system.
Opportunities and challenges in daily law firm work
Opportunities:
- Increased efficiency: Centralized data storage and automated processes lead to reduced administrative workload and a better overview of ongoing cases.
- Improved collaboration: Information is easily accessible to all authorized staff, making teamwork more efficient.
- Transparency: The traceability of all contacts and actions increases transparency vis-à-vis clients and within the team.
- Better deadline management: Automatic reminders and tasks ensure timely processing of important matters.
Challenges:
- Initial effort: Introducing a CRM system can involve considerable organizational and technical effort.
- Training requirement: To utilize the system’s strengths, staff require thorough onboarding and regular training.
- Data protection requirements: Handling sensitive data requires special attention to data protection and data security.
- Timeliness and diligence: Incomplete or incorrectly maintained data can lead to errors and misunderstandings.
A CRM system therefore makes a significant contribution to a modern, client-oriented law firm organization, provided it is properly selected, implemented, and used.
Frequently Asked Questions (FAQ)
What is a CRM system and what is it used for in a law firm? A CRM system is software for managing contacts, client information, and communication records. It supports the structured organization of cases and fosters efficient workflows.Who typically uses the CRM system in daily law firm operations? All employees who maintain client contacts, coordinate appointments, or document work progress use the CRM system. This generally includes case handlers, junior attorneys, administrative staff, and management.What are the benefits of using a CRM system? The benefits include time savings through centralized data storage, improved team collaboration, automated deadline monitoring, and greater transparency for clients.Do you need special prior knowledge to work with a CRM system? Basic computer skills are helpful, but employees usually learn to use the CRM system through training or on-the-job guidance.How is the security of sensitive data ensured in the CRM system? The protection of sensitive data is ensured by assigning access rights, encrypted storage methods, and strict compliance with data protection regulations.How up-to-date must the data in the CRM system be kept? Data currency is critical for the functionality of the system. Therefore, all changes, such as new contact details or completed tasks, should be entered promptly.What happens if the CRM system fails? Law firms usually take precautions such as backups and contingency plans to react quickly to technical faults and restore necessary data.
Frequently Asked Questions
What data protection requirements must be met when using a CRM system?
When using a CRM system, all requirements of the General Data Protection Regulation (GDPR) as well as supplementary national data protection laws must be observed. This includes, in particular, the obligation to have a legal basis for data processing: Personal data of clients and contacts may only be processed on the basis of explicit consent from the person concerned, to fulfill a contract, or when there is a legitimate interest. The CRM system must be technically and organizationally designed to ensure the confidentiality, integrity, and availability of personal data (Art. 32 GDPR: “State of the art”). Furthermore, comprehensive documentation of processing activities is necessary, including maintaining a record of processing activities (Art. 30 GDPR). It must also be ensured that data subjects have rights to access, rectification, erasure (‘right to be forgotten’), restriction of processing, and withdrawal. Finally, it must be assessed whether a data protection impact assessment (Art. 35 GDPR) is required, especially if there is extensive processing of sensitive data.
Is a Data Processing Agreement (DPA) required if an external CRM system is used?
Yes, as soon as the CRM system is provided by an external provider (cloud solution or IT service provider) and processes personal data on behalf of the firm, Art. 28 GDPR requires a Data Processing Agreement (DPA). The DPA must specify which data is processed, for what purposes, and which technical and organizational measures are taken to protect the data. In addition, the CRM system provider must ensure compliance with GDPR requirements, is subject to the controller’s instructions, and must not use subcontractors or transfer data to third parties without consent. General terms and conditions are not sufficient—the DPA must be agreed upon separately and in GDPR-compliant form. It is also advisable to regularly review the provider’s technical facilities and security measures.
What obligations exist regarding data storage and deletion in the CRM system?
The storage of personal data in the CRM system is permitted only for as long as necessary for the respective purpose (e.g., client support, fulfillment of contractual obligations). Once this purpose no longer applies, the data must be deleted immediately in accordance with Art. 17 GDPR, unless legal retention obligations require otherwise (e.g., tax law requirements according to § 257 HGB, § 147 AO). Therefore, the CRM system must provide functionalities for implementing deletion and blocking concepts, including logging of all deletion actions. Businesses are obliged to regularly review and clean up their data inventories in the CRM. An automatic deletion routine and the option for selective deletion of individual data records should also be implemented.
May personal data be transferred abroad if the CRM system is hosted outside the EU?
The transfer of personal data to so-called third countries outside the European Economic Area (EEA)—for example, if the CRM provider’s server is located in the USA—is generally possible, but is subject to strict legal requirements under the GDPR (especially Art. 44 ff. GDPR). An adequate level of protection is required in the recipient country. This can be achieved via an adequacy decision by the EU Commission, standard contractual clauses, or other suitable guarantees. For the USA, after the end of the Privacy Shield agreement, particular care is required—new contractual solutions must now be found and additional protective measures implemented. The controller must also inform data subjects accordingly and make any risks of the transfer transparent.
What reporting and information obligations exist in the event of a data breach in the CRM system?
If there is a breach of personal data protection in the CRM system—such as unauthorized access, loss, or manipulation—Art. 33 GDPR requires immediate notification (usually within 72 hours) to the relevant data protection supervisory authority. If it is likely that the breach poses a high risk to the rights and freedoms of those affected, they must also be informed without undue delay (Art. 34 GDPR). The notification must describe the nature and scope of the breach, specify the affected data categories, assess the potential harm, and document the measures taken or planned. An effective internal management system for data protection incidents must therefore be in place.
Do internal access permissions in the CRM system need to be regulated by law?
Internal access permissions in the CRM system are subject to the principle of data minimization and the “need-to-know” principle from Art. 5 GDPR. This means that each employee may only access client data required to fulfill their professional duties. Permissions must be traceably documented and reviewed regularly. Ideally, a role-based access control (RBAC) system should be implemented to centrally assign and manage rights. When employees leave or change roles, permissions must be promptly adjusted or deleted. The employer must transparently regulate these processes in an IT policy or a company data protection policy.
Is a data protection impact assessment (DPIA) required when using a CRM system?
A data protection impact assessment pursuant to Art. 35 GDPR is particularly mandatory if the use of the CRM system involves extensive processing of particularly sensitive data (e.g., health data, political opinions) or systematic monitoring or profiling of individuals. The aim of a DPIA is to identify risks to the rights and freedoms of data subjects at an early stage and to define suitable countermeasures. The DPIA includes a systematic description of the processing operations, an assessment of necessity and proportionality, a risk assessment, and an outline of planned remedial measures. The results must be documented and, if necessary, coordinated with the data protection authority.