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Inside and Outside: Developing and Maintaining Referral Sources

Updated: Jul 29, 2019

Inside and Outside: Developing and Maintaining Referral Sources

By Liza Vasquez CMC ICF and Jeffrey F. Silber CPA MBA CMC

Certified Master Business and Life Coaches


Most of the lawyers we know rely on referral sources for new business, either heavily or at least to a certain extent, more than direct personal knowledge of the potential clients. How do you get your new clients? Are you using a network of referral sources? We believe that you should be utilizing this approach to growing your legal practice. So, let’s dive into this interesting approach.


Cultivating External Referral Sources


Depending on your practice area, the relationships you develop with referral sources may be more important than you directly knowing the prospective clients. For example, estate planning lawyers, divorce lawyers, IP lawyers and so on, may rely more on other lawyers who do not offer these service; or rely on private bankers to meet wealthy people.


Attorneys serving middle-market companies are frequently introduced to business owners by insurance brokers and accountants. We want to single out accountants as an excellent source of referrals because they often know where the money is moving long before the lawyers find out.



Bankruptcy and white-collar criminal clients are referred by different parties in these matters to other lawyers in those practice areas. Architects are a good source of referrals to real estate developers and construction companies and visa versa.


Treat potential referral sources just as you would any potential client – better in fact – because each referral source might be a window to an entire universe of new clients.

Identify the best potential referral sources you can and have lunch with them if possible, a coffee or just a chat will work also, but you want to start getting close to your referral source on a personal basis.


Be direct and tell then you are looking to expand your business network for mutual benefit. That word “mutual” will be key. No one, other than a relative, is going to help you if it will not also bring them some benefit.


You might say to a potential referral source that occasionally your clients ask you for the name of a good accountant, banker, insurance broker, construction company, etc. and you want to know someone in each area who you can have confidence in referring to these clients.


As we just said, try to build the human connection with your referral sources just as if they are current clients or potential clients themselves. Learn about them personally and contact them frequently. Be as friendly as you can and work your way up to friends.


When developing referral relationships, a lot of lawyers are concerned that they do not have much business to refer back to make the relationship mutual. Even if the referral source does not expect a quid pro quo, everyone would like to see more business come their way.


Sure, it is unlikely that you will be able to refer a client to an accountant or banker immediately, but you still need to keep the contact warm. Try to see each referral source once every two months, or at least call him or her. And we do mean call him or her, not just send a text message. In the call, start by asking about them.


You know our motto is to make everyone you meet feel important. So, start out by asking about them, their family and their business. Be sure to mention, “You know, I have your card right in front of me, but no one has asked me for an accountant (banker, insurance broker, etc.) lately. But your card is still on my desk right in front of me.”


Needless to say, if you can actually refer a client to your referral source, that would be much, much better. In fact, it would be excellent.


Caution: In developing your network, do not have more than one referral source in each category. You will turn an accountant (banker, insurance broker, etc.) against you, if he/she learns that you are also working with a competitor.


Cultivating Internal Referral Sources

Forming Referral Relationships Inside Your Law Firm


For some lawyers, their own partners or colleagues in the law firm are their primary, or even their only, source of new work. If that is the case, you be seen as a Service Partner. That is fine, but undoubtedly, you will still want to increase your billable hours.


For most others, colleagues can be great additional source of referrals to augment your other individual marketing efforts.


To increase the odds, you will get referrals or additional work from other partners, cultivate your internal relationships and always emphasize the Human Connection. Then, when you are contacted:

  • Be accessible

  • Be responsive

  • Be helpful

  • Be courteous

….. because, how you treat your colleagues is how they will assume you are going to treat their clients. If you are not responsive, if you lack empathy, if you demonstrate poor listening skills, other lawyers will be very reluctant to introduce you to a client.


I had two interesting conversations during recent coaching meetings. The first involved a lawyer — let’s say Partner Q — who had an opportunity to expand a client relationship into Labor & Employment Law, a new practice area for this client. His colleague, Partner J, is particularly well-suited for the work. But Q had some reservations about involving J. In fact, Q asked me, “Do you know J very well? She doesn’t seem very friendly.”


In another firm, Partner Sandra, in an effort to expand work to the firm’s only other office, talked to me about introducing her Partner Bill F., from the other office, to the client. When I saw Bill the following week, I asked if he had heard from Sandra, which he said had. I followed up by asking what had transpired and he responded, “I suppose I should call her back to talk about it.” I was horrified at this response. Sure, you may be busy. But your response to each opportunity will determine whether you get other opportunities in the future.


It amazes us that lawyers fail to recognize the impact that internal relationships, personal branding and communications can have on building their practices. We know lawyers who send work to lawyers in other law firms, work that can be handled by a colleague in their own firm. They feel more confident making recommendations to their best clients outside the firm rather than to their own partners.


We have heard all the arguments. Sure, some of your colleagues will not share credit or origination fees with you. But if it involves a client of the firm who requires additional services, you might get some interesting work and the firm as a whole will benefit (rising tides raise all boats).


Does Everyone in Your Law Firm Know You and What You Do:

  • Get Others In Your Law Firm to Know Who You Are, How You Can Help Them and Their Clients

  • Make it a policy to go to lunch once or twice a week with partners or other colleagues in the firm you don’t already know.

  • Organize a Lunch-and-Learn. That is, organize a sandwich or pizza lunch in the conference room for you to explain what you do, how you can help their clients and what situations in their clients to look for which would indicate that your services would be needed.

What can you do to be the first call from one of your partners for new projects?

  • Be responsive. When a colleague contacts you with a question, respond ASAP. If you can’t do it, delegate it to a member of your team. But at all costs treat your fellow partners or other associate lawyers as if they are potential major new clients.

  • Assess the situation. Ask a lot of questions. Is it a big deal or small issue for the client? What information is needed? How quickly does this require a response? React accordingly but never let if fall between the cracks. Especially do not forget it, if it does not urgent at the moment your colleague presents the situation to you.

  • Be honest. Is the work in your practice area? Are you the right one to handle the matter or even to offer an opinion? You must be honest with yourself that you can handle the issue well. Can you stay within the client’s budget or will your participation be too expensive for the client? Just because you will not be the relationship partner, do not try to milk it (over billing) for all you can get out of it.

  • Follow up quickly. Send your colleague whatever is needed to take advantage of the opportunity as soon as you can, whether it’s a detailed response, a section for a proposal or a fee estimate.

  • Be available. If your colleague needs your help closing the deal, offer to participate in conference calls, or sales visits to potential clients.

  • Identify your colleague’s expectations. If you close the new business, find out what approach you should take with the client. What role does the primary contact want you to play? How does your colleague want to be kept involved? Should you contact the client directly or only work through the relationship partner?

  • Continue to seek follow-up opportunities. When you find information that would be helpful to the client, such as an article, advise your colleague. Offer to conduct a client-specific training session or program. Keep the primary partner apprised of other similar matters you are handling for other clients.

Rewarding Your Referral Sources


Ways to stay in the good graces of potential sources of new business

In many ways, rewarding someone for referring a new client or a piece of business to you will be the same for an external or an internal referral source. Below are ways to reward them and you can see which of these approaches are more appropriate for internal or external referral sources.


Always remember to reward your referral source for an actual referral.

Send him/her a bottle of wine, a gift certificate to a high-quality store or maybe tickets to sporting event. The size of the gift can depend on the size of the referral.


On the other hand, if you your referral source wants to receive some part of the fee, then no gift or extensive amount of thanks may be necessary because it is a business transaction, and we leave the fee negotiation to you or to your firm’s policy on such matters.


Do you remember our discussion of the Emotional Bank Account? Keep making deposits in the Emotional Bank Accounts of your referral sources and the referrals will keep flowing. This applies to referral sources both inside and outside your law firm.


Even without directly referring work back to your referral source, there are plenty of things you can do to stay on the good side — and on the radar — of your referral sources. Here are some thoughts.


Focus on the Business


Do a great job with every referral. Reciprocity may be important at some point in time but taking good care of your partners’ clients is job one.


Express appreciation. Send a handwritten thank-you note ASAP — even before you are sure you will be retained. As a banker once told to us, “There are plenty of good lawyers I can send work to; I want to send clients to someone who appreciates it.” If it is a particularly large matter, consider whether you should provide more substantial recognition at holiday time or when the matter is concluded, such as an expensive dinner.


Keep the referral source informed. If the client relationship allows it, find out if and how referral sources would like to be kept informed about their clients’ matters, especially if something may affect the work they are currently doing (e.g., taxes) with that client.


Attempt to Reciprocate in Various Ways


Build a relationship. Take referral sources to lunch and ask about their practices or companies. What kind of business are they seeking? Who is their ideal client? How can you recognize a prospect for them? Let them know you will do your best to identify opportunities for them.


Make introductions. Even if you don’t have business to refer, you have contacts to share. Perhaps a banker can meet with your firm’s CFO. Maybe an engineer would enjoy playing a round of golf with you and your contractor client. You might even facilitate a networking event or host a happy hour for people who would benefit from knowing one another.


Include them. Invite referral sources to firm parties, seminars and events so they can meet others in your circle.


Return the favor. If you can, send business back to people who are referring business to you. Obviously, this needs to be in the best interest of the client. If you don’t already, maintain a list of your contacts and track both inbound and outbound referrals.


Be strategic about your referrals. Everyone has strengths. There are banks, for example, that finance construction projects and insurance companies that cover art collections, and so on. Learn the personalities and niches of your referral sources and be sure to factor these in when sending out business.


Use social media. Follow referral sources on LinkedIn and Twitter and share their articles or comments.


Give them exposure. If you are putting together a panel, it is a chance to give a good referral source some visibility. If you are writing an article, consider co-authoring with someone who sends you business. Or, you can quote a referral source in your article.


Nominate them. Look for chances to get referral sources recognition or benefits through awards (e.g., investment banker of the year) or other activities (e.g., a board or club membership).


Provide substantive information. Ask if you can speak at referral sources’ annual retreat or at their client or customer seminars. Offer to write an article for the referral source’s client or customer newsletter. Give a lunch-and-learn talk for the employees of your referral sources.


Conclusion

Keep this in mind: only four or five good referral sources can make your career soar!


For many lawyers, referral sources are critical to developing their practice. Rather than targeting every prospect, it is often more efficient to know the people who know the people who know the people you would like to represent.


Keep in mind that the quality of referral sources is more important than quantity. You don’t need dozens of referral sources to build your practice. In fact, as we mentioned earlier, if you have too many referral sources you might get a bad reputation – you might be seen by some people a courting them and their competitor at the same time. This will not be well seen.


Focus on your best opportunities and concentrate your efforts on taking good care of them and their clients.





© Copyright 2019. All Rights Reserved. Any unauthorized distribution or reproduction of this material in print or in any electronic form is strictly prohibited. Persons or organizations desiring to use this material, must obtain the prior written consent of Silber, Vasquez & Associates.



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©2019 by Silber Vasquez & Associates