Small Law Firms

Don't Make These 7 Mistakes When You Need To Refer A Case Out

Be specific, be up-front about certain things, and allow the attorney to set the fees.

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Getting referrals sounds simple enough. You tell your listserv, Facebook lawyer’s group, or your weekly lunch buddies that you need to refer a case out and you’ll probably get more names than you know what to do with. The problem is that you might get so many names that you and the potential client will feel confused and overwhelmed. Or they may call all of the lawyers only to find that none of them will take the case for one reason or another. Or they may get none at all. Today I’ll point out some common mistakes I see when colleagues ask for referrals.

1. Not being specific when seeking a lawyer in a different state. A common referral request is for a lawyer living in a different state. You’ll need to do better than that, so include the city or the county. A potential client will not be interested in a lawyer who lives 100 miles away on the other side of the state. Even with today’s technological advances, clients still need an attorney who lives reasonably close to them, especially if the client can only pay with cash. A lawyer living many miles away may not be familiar with the local court rules. So remember, the more specific, the better.

2. Not specifying whether the client needs a plaintiff’s or defense lawyer. It’s not enough to simply say you need a referral to a litigator. Does the potential client need to sue someone or is someone suing the potential client? Unless you explain the client’s situation, you will need to specify whether the potential client needs a plaintiff’s lawyer or a defense lawyer.

3. Not stating the amount at issue. Yes, it is about the money. If the case is too small, it might not be cost effective for the lawyer to take the case. If the amount at issue is too large, then it could mean that the case is overly complex and it may be more suitable for a larger firm.

4. Not stating enough facts in general. The three mistakes I mentioned above can be somewhat alleviated by explaining the client’s situation. This may not be feasible because the story is complicated, trade secrets are involved, or the potential client is a public figure.

5. Not stating whether you want a referral fee at the outset. Lawyers have mixed feelings when it comes to giving and receiving referral fees. Some will gladly pay them while others question the integrity of those who ask for them. But on a practical matter, lawyers have to take referral fees into account when deciding to take on a client. If referral fees have to be paid, then the case may not be worth taking on. The rudest and possibly most unethical situation is when Lawyer A refers a potential client to Lawyer B, the client and Lawyer B sign a fee agreement, and then Lawyer A demands a referral fee from Lawyer B.

So if you want a referral fee, state it from the start. You might get a few dirty looks, but that’s a lot better than one side feeling shortchanged on the transaction.

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6. Knowingly referring out a bad client. I explained why it’s a bad idea to refer a troublesome client here. If you know that the potential client might be trouble, give the attorney a heads up.

7. Asking for a “reasonably priced” lawyer. My biggest pet peeve is when a colleague asks for a “good and reasonably priced” lawyer, either for a client of theirs or someone else. I expect bargaining from potential clients. But when a fellow solo or small firm lawyer (and business owner) tries to dictate how much I should charge a client, it is disappointing and in some cases, offensive. I’ll be sure to reciprocate when a potential client asks me for a reasonably priced attorney.

I get that there are many people who are afraid of large attorneys’ fees. But you will be surprised at how many of them are able to find the money. I also think about some of my clients who saved and sacrificed to pay me. They canceled vacations and kept their old and busted car a little longer. Some have taken out personal loans. And they did not complain.

My student loan servicers won’t allow “reasonable” payment terms despite my constant pleading. My credit card companies won’t give me “reasonable” interest rates.

It is okay to point out that the potential client is indigent. But the attorney will be the one to determine what is a reasonable fee.

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In short, if you want to get good referrals from your colleagues, you should make it easy for them to find one. Otherwise, you will get a lot of follow-up questions or incompatible referrals. So be specific, be up-front about certain things, and allow the attorney to set the fees.

Shannon Achimalbe was a former solo practitioner for five years before deciding to sell out and get back on the corporate ladder. Shannon can be reached by email at [email protected] and via Twitter: @ShanonAchimalbe.

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