Why Some Referrals Are Bad For Your Law Firm

Not all referral sources are created equal. Find out why some referrals may be bad for your law firm.Let’s be honest when you read about marketing for solo and small firm attorneys there are a bunch of articles detailing the power of developing referral sources. For most law firms the reality is that a referred case/client is a superior case/client. There’s no point in pretending it isn’t true. And yet, I’ll try to take the contrarian position and offer a bit of perspective on the matter of referrals.

If you’re a new practitioner, you may not have a network or a group of raving fans to ensure a robust referral network (start this process now). Maybe you’ve proven through tracking, that for you and your practice, referrals simply aren’t all they’re cracked up to be.

Besides, developing new referral sources can feel like a grind. Lots of what appear to be promising starts fizzle out into smoke. Business lunches are a total drag. Nurturing all your referral sources can feel like balancing spinning plates. It’s true that building systems can make things far less stressful and referrals often become a mainstay of new cases and subsequently firm profitability. Does that necessarily mean that you should spend significant time or energy making referrals a big piece of the pie? Maybe not.

The thing is referrals have one distinct downside, which is that you add a layer outside of your control between yourself and referred clients - the referrer. Referrals from other forms of marketing connect you directly with the consumer. Mediums such as direct mail, PPC, and community outreach allow you to bring your Unique Selling Proposition to prospects unfiltered from the perspective of an intermediary.

Now, not having an intermediary also means that, other than your market messaging and targeting, there is no effective filter between those new inbound leads and your law office. Referrers like past clients who know and like you, as well understand you, will usually refer new business that they believe is an appropriate fit for your law firm. Referrers such as other attorneys will avoid referring you cases or clients that you clearly wouldn’t want. This is an upside feature of having the middleman involved. Still, a middleman is just that, a middleman, and they don’t know exactly what you want or when you want it. You need to be directly in front of consumers filling the gaps between referrals and those that should have been referred.

Ultimately, should you do referral marketing? Absolutely. You would be foolish not to. It’s often lucrative and low cost to maintain, but it’s only one prong of what marketing should be. In fact, having a diverse marketing portfolio is often the right approach to finding consistent streams of new business. Sources, mediums, relationships they all come and go over time. It’s a risk mitigation strategy not altogether different from most investment portfolios. A diverse portfolio wouldn’t be just referrals just as it wouldn’t be just PPC. The portfolio should include multiple mediums that aren’t interrelated.

Since we’re talking about referrals here are few simple, actionable items you can use to improve your referrals and save time. Identify your referral categories, not to be confused with referral sources, and examine the type and number of referrals coming from those categories. Rate them A+ to F and then focus your time building on your existing strengths not on building up weak categories. I’d choose perhaps the two places you are doing best to focus on.

Example below:

Referrals

  1. Referrals from other attorneys
    1. Attorneys you know
      1. formal referral system established (A)
      2. informal referrals (C-)
    2. Attorneys you don’t know (C)
  2. Referrals from past clients (D)
  3. Referrals from community networks (B+)

Action item 1(a)i. Add new attorneys sources to the formal system and nurture those connections that are already established.

Action item 3. Sponsor 2 new community events within the existing verticals

Joe Mann
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Joe Mann is a former insurance claims adjuster turned Partner Manager at Great Legal Marketing.