Law Firm Marketing – Mining and Minding Your Referral Base and Network

By John W. Olmstead, MBA, Ph.D, CMC

In my Illinois Lawyer Now Asked and Answered Weekly Online Column – and in my blog – www.olmsteadassoc.com/blog I encourage the submission of questions concerning law practice management topics. I am receiving more and more questions pertaining to law firm marketing. Here is a question that I recently received concerning marketing and establishing and maintaining referral networks.

Question:

Our firm is a six-lawyer firm in ChicagoLand that specializes in the areas of estate planning, estate and trust administration, and elder law. Four of the six lawyers in the firm are equity partners and two are associates. Our firm was formed ten years ago, and almost all of our business comes from the internet. While we are grateful for the success and business that we have developed we believe we have missed the boat is getting more business from referrals from lawyers and other professionals as well as past clients. We are spending a fortune on marketing and would like to take advantage of less costly means of acquiring business. Your suggestions are appreciated.

Response:

Past client, lawyer and other professional referrals are still very viable methods for acquiring business even in the internet age. I have many estate planning/administration/elder law firm clients that obtain all of their business through these referral sources and spend very little on marketing.

Referrals from former and current clients and friendly third parties are among the most desirable sources of new business.

A referral base is the process by which other individuals refer legal work or clients to an attorney. The most tangible benefit of a referral network is the generation of legal work that will contribute to your firm’s revenue. A secondary benefit that produces personal and professional satisfaction is the recommendation of your firm from another individual who has confidence in your abilities. In either case, since the client has been referred by a friend or an individual in a position of trust, the client relationship often begins with a greater degree of confidence than cold leads from the internet and other forms of advertising.

It has been my experience that referrals generally occur because of the efforts of the attorney who is receiving such referrals. You should not expect such referrals to “fall into your lap.” You must initiate certain actions to try to make them occur.

There are two kinds of referral networks. One is an attorney referral source. The other is referral from clients or other “friendly third parties” who are not attorneys. Both types of referral networks are important to an estate planning/administration/elder law practice.

Attorney Referrals

Many attorneys refer work to other attorneys because of the specialty nature of work that needs to be performed or because of a conflict of interest. To be in a position to receive such referrals, an attorney should develop an expertise in one or more areas of legal work and become recognized by other attorneys as being especially skilled in those areas. It is also necessary to inform attorneys who may be referral sources that you have such expertise and that you are interested in accepting referrals in these areas. To the extent you are interested in receiving referrals, you should get to know attorneys likely to be in a position to refer such matters. This may be accomplished by participating in bar associations, by writing on estate planning/administration/elder law issues, by speaking at CLE programs and by maintaining an active role in selected committees. Having your firm listed in legal directories may also help.

Once an attorney referral base has been established, it is important to maintain your network. Several points need to be remembered in this regard.

First, referrals resulting from a conflict of interest will often involve a client who will be returning to the referring attorney for other matters.
Second, remember that there is another attorney/client relationship involved.
Third, providing good service to the referred client is an excellent way to help reinforce the referral network since the reputation and judgment of the referral sources, as well as your own reputation, is on the line with a referral client. Further, you should make every effort to ensure that the referred client is satisfied. This may mean having to do more than “just handling the matter in a competent manner.” Dissatisfied clients will invariably report back to the referral source making it difficult for you to receive future referrals from that source.
Fourth, the attorney working with a referred client should be mindful of not “showing up” and how it will impact the relationship with the referral source. Also, never give the impression to that client or to the referring attorney that you are trying to “pirate” that client.
Fifth, the attorney handling the referral should maintain as much communication as possible with the referral source. Doing these things will keep the referring attorney happy and result in additional referrals.

Non-Attorney Referrals/”Friendly Third Parties”

The first step is to identify potential referral sources. The best referral sources will have significant and repetitive contact with individuals who need your legal services. Examples for an estate planning/administration practice include accountants, financial planners, bank trust departments, etc. These sources should be able to identify the needs of potential clients and have their trust in order to make a referral. Identifying friendly third parties and cultivating their confidence is time consuming. Patience and perseverance is essential.

The initial contact with potential non-lawyer referral sources may be made by joining a professional, trade, social, civic, service or religious organization. You may be recognized by maintaining an active profile on influential committees. It is essential that you do a superior job on any committee or project assigned. This will provide an excellent opportunity to get to know and impress those friendly third parties who may be potential referral sources.

By analyzing and communicating with well positioned friendly third parties, you may be invited to speak before professional or other organizations on timely subjects in which you have expertise, or to write for one of their publications. On many occasions, you may already have established a relationship with a friendly third party who is a current or prior client.

Once these referral sources have been identified, you should develop and reinforce a personal relationship with these friendly third parties who come in contact with potential clients.

Maintaining the Referral Network

Once referrals from non-attorney sources are received, it is important that you work to maintain that base.

Providing good service to referred clients and keeping them happy will reflect well on the friendly third party and encourage them to make additional referrals. Further, courtesy should be extended to the referral source by communicating with them about the status of the referred matter. If the referral source is involved in the matter for the client, keep them informed and ask for their input. You need to satisfy both the client and the referral source in order to continue to receive referrals.
Maintain contact with referral sources even when you are not working on a referred matter. This keeps your name in front of that source for the next referral. A phone call, letter or lunch is easy to do and can be valuable in maintaining and reinforcing your relationship. You can also offer to provide assistance or input to the referral source on matters in which you are not directly involved. Non-lawyer friendly third parties like to have an attorney as a resource and will likely give that resource person more referrals.
Set monthly goals for the number of referral sources contacted. Allocate time for this important activity. Make it part of your regular routine.

Many referral sources will also expect referrals from you. This is usual and can help build a stronger relationship with the referral source. You must always be sure it is in the best interest of your client to make such a referral. If you work with referral sources who are competent, quality people, you will have no worries in accepting or making referrals to them.

Satisfied Client as a Referral Source

Most satisfied clients are willing to make referrals. The time immediately following the successful completion of a legal matter is when to ask that client for a referral. It is strongly recommended that you ask the client for a referral, prior to using that client’s name. Few clients like to make referrals without their permission.

The development and maintenance of a referral network is an excellent technique for marketing your practice and obtaining legal business from attorney and non-attorney sources. A successful referral base will require work and take time to establish. You must have patience and persistence. Most referrals go to those attorneys who have worked to establish and maintain their referral network.

Another successful approach used by estate planning/administration/elder law firms over the years has been seminars sponsored by the law firm. Today I am seeing more and more firms doing webinars and they are finding webinars to be a suitable replacement for live seminars and at a lower cost and time investment.

Don’t forget the importance of having a program to encourage Google reviews from completed client engagements.

John W. Olmstead, MBA, Ph.D., CMC, is a Certified Management Consultant and the president of Olmstead & Associates, Legal Management Consultants, based in St. Louis, Missouri. The firm helps law and other professional service firms improve the operations and management of their practices and the lives of their practitioners. The firm, founded in 1984, serves clients across the country assisting them with implementing change and improving operational and financial performance, management, leadership, client development and marketing.

John’s assignments have covered the spectrum of management issues. However, in recent years most of his time has been focused on engagements helping firms in areas:

Succession/Exit Planning
Partner Compensation
Governance and Structure
Strategy & Competitive Approaches
Profit Improvement

John is the author of a the published book, The Lawyers Guide of Succession Planning: A Project Management Approach for Successful Transitions and Exits, Published by the American Bar Association. John served for twenty-four years as the Editor-in-Chief of “The Lawyers Competitive Edge: The Journal of Law Office Economics and Management,” published by Thomson Reuters. He is currently serving as a Past Chair and current member, Illinois State Bar Association Standing Committee on Law Office Management and Economics and as a past member of the Legal Marketing Association (LMA) Research Committee. John may be contacted via e-mail at jolmstead@olmsteadassoc.com.

Additional articles and information are available at the firm’s web site: www.olmsteadassoc.com and blog www.olmsteadassoc.com/blog.

Law Firm Marketing – Mining and Minding Your Referral Base and Network

By John W. Olmstead, MBA, Ph.D, CMC

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