If you’re at a cocktail reception, and you convince a potential client to send her business your way, that might seem like a cheaply-earned client. However, consider all the associated expenses: time, travel, parking, attendance fee, drinks (for you and anyone you’re looking to have a word with), business cards, dry cleaning, gas on the way home, etc. It all adds up.
So consider this: What if someone else was at that cocktail party, referring you a client—while you stayed at home? That’s a far more palatable (and less costly) maneuver.
It might seem counterintuitive, but it can be especially lucrative to source referrals from other lawyers. As it turns out, when working closely with other lawyers, you might find that you’re not necessarily in competition for the same clients.
When this becomes clear, it’s a matter of figuring out how to build relationships that are truly win-win. Here’s how to do that, so that you can get more clients for your law firm—without spending more money.
Referral agreements and ethics rules
Before you start accepting referrals from other lawyers (or vice versa), it’s prudent to make sure you have a clear agreement in place.
Sharing referrals with other attorneys does require an awareness of jurisdictional ethics rules. Before entering into a referral arrangement for a specific client, you should:
- Know whether your jurisdiction prohibits or limits quid pro quo referral agreements
- Determine how you must notify clients of the referral and if and how you need to acquire client consent
- Understand to what extent each lawyer is responsible for the representations, how the attorneys may split fees under the referral arrangements, and whether that split directly relates back to the percentage of work performed
Get everything you need to know about earning client referrals in our free guide, “Unleashing the Power of Referrals,” authored by Jared Correia, Esq, CEO of Red Cave Law Firm Consulting.
Download Unleashing the Power of Referrals
Types of referral agreements
There are plenty of situations where one lawyer (or law firm) might want to refer a client to another. Have a look at these four traditional types of lawyer referral arrangements and consider whether any of these opportunities could lie in front of you right now:
1. Big firm-small firm pipeline
The big firm-small firm pipeline is a standard driver for referrals. Many potential clients will present claims that are not at a high-enough value for big firms to bite on; but, there are many small-firm attorneys who would happily take those lesser-value cases.
The small-firm attorneys who get those cases are the ones who have made the effort to build relationships with their big-firm counterparts and made their acumen for such cases known.
2. Complementary practice areas
Lawyers seeking referrals should network with attorneys in complementary practice areas. A complementary practice area is one that tends to sprout the types of claims you handle.
There are some obvious examples: A divorce practice will yield estate planning work, because divorcees require new wills. A personal injury practice will yield Social Security Disability Insurance (SSDI) work, because people hurt in accidents sometimes don’t return to work.
Set yourself up as the go-to resource for attorneys practicing in areas from which your cases hatch.
3. Shared practice areas
There are a number of ways attorneys practicing in the same area can share referrals: One divorce attorney specializes in collaborative law, another in mediation. One personal injury attorney litigates, while another does not. One patent lawyer may focus on electrical engineering, another on software.
Get to know others in your practice area who have a different focus and consider whether there might be an opportunity for referrals.
Mentor-mentee arrangements are often viewed as strictly student-apprentice relationships, but mentors can pass lower-value, or less difficult, cases to mentees. As time passes, mentor-mentee arrangements may convert to straight-up referral relationships.
As you network with other lawyers, always be on the lookout for client referral opportunities. Then focus on the most important part of any referral arrangement—building strong relationships with your referrers.
Want more clients? Build strong relationships with other lawyers
Underscoring any referral arrangements is the personal involvement needed to make those relationships successful.
But, even with an established personal relationship, referral sources will remain careful about which clients to send along—so, beyond the shallow “practice area X is what attorney Y specializes in,” you’ll want to disclose more information about the types of clients you want to work with, in order for your referral sources to be confident that they’re sending you the right clients.
The deeper you engage your referral sources, the better. As you accept (or reject) referrals, you’ll generate more opportunities to educate your referral sources about the clients that you want—and, perhaps more importantly, about the clients you don’t want.
If your referral sources understand the kinds of clients you want, you’ll need less time to vet those referrals, giving you more time to focus on other things like dedicating your time to your existing clients—or even building out a broader marketing strategy.
Therefore, it is important to be in contact with your referral sources regularly. Set up consistent opportunities to talk with them, just as you would for your existing clients.
Also, always update your sources on the outcome of any cases they’ve referred. This is a tangible opportunity both to thank them and to instruct them further on the work you do—since it relates to work in which they have a vested interest.
Finally, get personal: Talk to your referral sources about the personalities you like to work with. If you don’t want to work with Type A personalities, then make that clear.
Know which relationships to cultivate
Assuming you meet the ethical strictures of your jurisdiction, you will still need to decide whether each referral source is a valuable one for your law firm. Translation: In order to determine the return on investment for your referral marketing efforts, you will need to track who is sending you work—and how often.
Clio’s Campaign Tracker allows you to track referrals directly to their source. You can create individual campaigns to track the results of a particular relationship and then set up unique forwarding numbers or web forms to monitor the value of each lead they send. From there, you can list any expenses in terms of referral fees or other costs that arise in maintaining that relationship.
Campaign Tracker will aggregate the total income from all leads linked to a referral source, and balance these against how much you spend to maintain a particular relationship. You’ll see, essentially, how much it costs to build a referral arrangement, which you can then compare to your other marketing efforts.
You’ll also quickly see which of these referral relationships are most lucrative—helping you determine which to cultivate and which to gracefully put to pasture.
Learn more about what Clio has to offer. Schedule a demo or Start your free trial today!
About Jared D. Correia, Esq
Jared D. Correia, Esq. is the CEO of Red Cave Law Firm Consulting, which offers subscription-based law firm business management consulting and technology services for solo and small law firms. Red Cave also works with legal institutions and legal-facing corporations to develop programming and content. A former practicing attorney, Jared has been advising lawyers and law firms for over a decade. He is a regular presenter at local, regional, and national events, including ABA TECHSHOW. He regularly contributes to legal publications, including his column, Managing for Attorney at Work and a forthcoming advice column for Lawyerist. Jared is the author of the American Bar Association publication Twitter in One Hour for Lawyers. He is the host of the Legal Toolkit podcast on Legal Talk Network. Jared also teaches for Concord Law School, Suffolk University Law School, and Solo Practice University. He loves James Taylor, but respects Ron Swanson; and, he tries to sneak Rolos when no one is looking.