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Risky Business: Lawyer Referrals and the Nuclear Option

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The most successful law firms generate the bulk of their clients from referrals. Referrals are key to an effective law firm marketing plan because reliance on referrals can reduce the effort you have to put into marketing your practice over time. You have to hustle to develop referral pipelines; but, once you’ve established those, you have acquired a number of persons who are willing to sell your services for you, in appropriate circumstances.
Most lawyers feel most comfortable networking with other lawyers. However, there is a latent danger in that strategy: No matter how earnest the potential referrer, up to the time you sign a referral to a fee agreement, the referring attorney can exercise ‘the nuclear option’, and snatch that referral back for himself. Non-lawyer professionals making referrals to lawyers do not have the option to reacquire the business for themselves: they can’t perform substantive legal work — but, your lawyer referral sources can. (Not that the snatching back of referrals happens regularly; the more sinister part of this occurs when lawyers considering referrals out to you don’t ever make them, and just handle the cases themselves. That’s rest of the iceberg –that’s if the rest of the iceberg were a howling abyss of lost business opportunities.)

I label the ability of another lawyer to pull a referral as the nuclear option, in part, because it’s always overhanging your head, like a Damoclean Sword. It’s a possibility you can’t eliminate from your lawyer referral pipelines, unless you’re charismatic like Rasputin; however, you can protect yourself:

Source Referrals from Experts/Specialists. If a lawyer is likely to avoid passing along a referral, it probably means that that lawyer is willing to take a case outside of her specific expertise. This is less likely to occur when a lawyer is committed to a niche practice. (It may take some investigation to find out whether a lawyer is truly committed to a niche — maybe they want to be, but they’re not making enough money at it yet, and end up taking whatever comes through the door: a de facto general practice.) So, if you want to maximize your referral potential, seek out lawyers with niche practices different from your own. (Yes, you should be focused on a niche, too — in large measure because it’s easier for a referral source to sell a concrete service.) This may mean that you target more experienced attorneys initially, since those folks will have built established practices with more consistent revenue coming in for dedicated practice areas. Of course, that does not mean that you can’t simultaneously foster relationships with new attorneys, who are on the path to developing established practices.

Focus on Complimentary Practice Areas. Two lawyers with criminal law practices are far less likely to refer work to each other than one lawyer with a criminal practice will be to refer cases to an immigration attorney. Often a major consideration in the formation of a law partnership, the matter of complementary practice areas should be a focal point in deriving referral pipelines, as well. Complementary practice areas are those that are capable of spinning off referrals to each other. In the instance of the criminal practice lawyer, it may be that clients will spawn immigration issues, which would be referred to an immigration attorney. Similarly, a divorce lawyer would spin off work to an estate planning lawyer. A personal injury attorney could devolve work to a litigator. There are, of course, numerous other examples. But, in terms of trying to figure out which attorneys to target as referral sources, you should concentrate on finding those specialists whose niche practices can generate cases for you. Think about what other legal issues create intersections with your own service provision. Then, find those lawyers who practice in those areas, and talk to them. This is why it makes sense for lawyers in specific practice areas to find ways to interact with lawyers in complementary practice areas: If you’re a divorce lawyer, involve yourself with estate planners, join groups that they belong to, and become the resident expert for the other side. Beyond general niches, there are specializations within practice areas that could be exploited — for example: the estate planner who focuses on special needs trusts, and who is able to refer more generic estate planning work to other lawyers.

Consider Target Client Choices. None of the foregoing means that lawyers in the same practice areas could never refer clients to each other — witness the above example of the estate planning specialist. It’s rarer; but, it does happen, in segments, based on a consideration of the individual attorneys’ target clients. Take the example of the criminal lawyer, once more. There are blue collar crimes and white collar crimes. There are criminal clients with money (their own, or their family’s), and there are criminal clients at a lower income level. There are older criminal clients, and younger criminal clients, charged with differing offenses. There are criminal clients in Franklin County and on the South Shore. Find out how other practitioners in your field parse out their practices. Do their rates exclude certain clients, and are yours lower? Do they only work in certain geographic areas, that differ from yours? Even within the practices of lawyers focused in the same niche that you are, there are soft spots for referral-making, if you poke around and find them.

Cultivate Qualified Referrals. Much of client acquisition tracks back to education. You’re presuming to answer potential clients’ questions, when they search for answers online, or within their own networking circles. That’s a fairly basic proposition, and the majority of lawyers know that, intuitively, even if they don’t articulate it. As it turns out, education is essentially important in building referral systems, too. No one, lawyer or otherwise, is going to refer you business, unless they know what you do. But, if you want qualified referrals, that question must be answered after a granular fashion. You understand, at a basic level, who your target clients are. The challenge is to distill those profiles for public consumption. The more detail you can provide your referral sources about the kind of referrals you want, the more likely your referral sources will be to make the right types of referrals. That amounts to less vetting (and more rubber stamping) on the back end, at your intake process.

. . .
Liner Notes
Ain’t That Peculiar‘ by Marvin Gaye
What’s going on? Posers are still copying Marvin, almost 50 years later. But, I digress.
I’m just like everybody else: I love me some Motown.
Marvin Gaye is the best R & B singer of all-time. He’s so smooth, he even makes social consciousness sound sexy.
The above, however, is my personal favorite from Marvin’s lengthy catalogue.

CATEGORIES: Client Relations | Law Firm Management | Law Practice Startup | Marketing | Planning

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