Five Steps to Expanding Your Law Practice Through Referrals

There are many ways to increase your bottom line through traditional marketing, such as print and internet advertising, social media, and networking with other professionals. Yet there is also a relatively untapped, inexpensive, and infinite source of additional revenue – referrals to and from other attorneys. Most jurisdictions allow for fee sharing and/or referral fees to other practicing attorneys. The following are the five key steps to implement in order to increase your revenue through referrals to and from other lawyers.

Expand Your Network

First and foremost, in order to expand your practice through referrals, you have to expand your network of attorneys. Like a Rolodex of key contacts, yours should include a list of attorneys in other practice areas and jurisdictions to whom you would gladly refer a case or client should the need arise. This enables you to help a prospective client you otherwise could not help, and potentially reap the benefits of a referral fee. Conversely, you can also let your network partners know that you will gladly reciprocate should one of them have a client in need of the services you offer.

Memorialize Your Agreement

Once you have agreed upon the referral of a client and a referral fee, you should commit that arrangement in writing. Something as simple as an e-mail can help avoid future misunderstandings as to the financial arrangement. If the referral fee changes for whatever reason, that change should also be committed to writing. Sometimes referral fees change depending upon the length of time a case takes to prosecute or based upon a sliding scale depending upon the eventual recovery. Again, all these details should be committed to writing.

Disclose the Arrangement

Many jurisdictions require that any referral fee or other fee-sharing agreement be disclosed to and approved by the client in writing. Specific disclosures such as percentages may or may not also be required. Be certain to review the applicable rules of professional conduct in your jurisdiction to make sure you are in compliance with any and all rules governing client disclosures and approval.

Define Respective Roles

You may be referring a case to another attorney for simply a referral fee. In such a scenario, the referring attorney is essentially passive and waiting for the case to conclude and to collect a referral fee. In other instances, there may be a division of labor and a subsequent division of fees commensurate with the work performed. In the latter scenario, the respective duties of the co-counsel should be defined with as much specificity as possible. Who is the lead attorney? Who is handling discovery? Who is handling law and motion? Who is responsible for client contact and updates? The more details agreed upon in advance assure a smoother ongoing working relationship.

Set Up a System for Follow-up

If you are the referring attorney and are assuming a relatively passive role in the case, you will want to schedule a follow-up system to make sure you know what’s going on in the case and when you should expect to receive a referral fee. This can be a sensitive subject as many attorneys don’t want to be perceived as bothering the other attorney. Therefore, it is good to agree upon and calendar a case status system. Will updates be monthly, quarterly, or semi-annually? Agree upon these details in advance to keep things running smoothly.

Implement these five steps and you will expand your practice, and increase your revenue with very little if any marketing expense.

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