As a law firm working to grow, there is nothing better than a referral. For one, it feels good to have a referral because it means someone trusts you. Moreover, potential clients who are referred are much more responsive to you because they come recommended.
But if you are trying to intentionally build and grow your firm, referrals can be deceiving – because while they are great when you get them, you can never predict when the next one will come.
ARE YOU GROWING OR MAINTAINING?
To start, we need to define growth. Of course you need to be bringing on new clients just to survive. This type of growth is more like maintenance. If you are looking to keep the clients coming in to stay roughly where you are, then referrals will be great.
But if you are looking to intentionally build something that will continue to expand year over year, then you need a growth plan.
HOW REFERRALS FIT IN YOUR LAW FIRM’S GROWTH PLAN
In order to create a comprehensive growth plan, you need to start by examining how you serve the potential clients that come your way. Every law firm has some type of intake process, whether it’s been defined or not. A prospect comes to you, you qualify the prospect, they have an initial consultation, they receive a retainer agreement.
These are the steps they follow whether they are a referral or if they found you through a search. Defining these steps are essential for your growth plan because you can determine how many initial consultations you need to achieve a certain revenue target. Then you can determine how many leads you need to reach your desired number of consultations.
However your firm defines these stages, your ability to efficiently qualify and communicate with prospects will dictate your growth. According to Clio’s Legal Trends Reports in each of the last two years, 2 out of 3 potential clients say their decision to hire is most influenced by an attorney’s responsiveness to their first call or email.
Referrals, then, are a tactic that fit into a larger growth strategy. And referrals are great. They can typically advance through the stages faster because they already have a level of trust that comes from a trusted recommendation. When you do have a growth strategy in place, referrals can be a vital component within that plan.
MAKING THE MOST OF REFERRALS
Referral Partners
Of course, part of your growth plan would be to seek out more referrals and more referral partners. But sometimes less is more. Do you find that the majority of your referrals come from the same people?
A good thing to do then, may be to communicate extremely well with your best partners rather than trying to find more partners.
Part of succeeding in this area is finding extreme clarity on who your best client is. The narrower your focus can be, the more you’ll open yourself up for referrals. The reason why is because your partners will know exactly who you serve so that when they see it, you come to mind.
This is also helpful, because your qualification will be done already when the prospect comes your way. You will only be receiving a referral who everyone knows fits with what you do.
Referral Fees
Paying out referral fees for new clients can be a nice “Thank You” for your trusted partners and a way to encourage they keep coming.
Just make sure you are following best practices in regards to referral fees. Here are some quick tips on how to handle referral fees:
- ISBA’s Referral Fee Dos and Don’ts
- Must be reasonable based on work completed (see your bar’s equivalent to Model Rule 1.5
- See also rules & opinions from your state & local bar, e.g., ISBA Ethics Opinions on Referral Fees and Arrangements
Of course referral fees are not the entire goal in the referral process. The goal is to provide the best legal service possible and direct potential clients to specialists who can handle their situation the best.
But in the midst of those transactions it doesn’t hurt to have the exchange of money even as a reminder to keep an eye out and make the best recommendation.
MEASURABLE GOALS AND OBJECTIVES
The true power in your growth strategy comes when you start tracking everything and measuring results against your goals. Too many law firms work really hard then just see where they end up.
A strategic approach includes building a plan with goals backed by data. This is intimidating for many because it’s impossible to predict. That’s exactly the point!
The best way to start with measurable goals is to start somewhere and know that you’re going to be completely off base. That’s OK. You will then learn and adjust moving forward.
If you’ve mapped out your intake journey into stages, you can start by working through estimated goals.
How many consultations do you want to have in a month?
How many need to fill out the form on your website? Or call into your office?
How many of those forms come from Google search? From referrals? From advertising?
When you put a number to these items you can start to track what’s working and what’s not. Then you can make adjustments. Now, rather than sitting back and waiting for referrals, you can see how they fit into the overall growth strategy.
YOUR GROWTH STRATEGY
You can be intentional about growing, and make deliberate efforts for lead generation because you can track what the results should look like.
All of this starts with an efficient intake process. If you can’t handle the leads and respond to them quickly then they will slip right through the cracks. Then you’ll likely be maintaining and waiting for the next referral.
But if you want to truly grow your firm, you need a process to handle and track leads. After that, you can ramp up the growth.
Maddy Martin is the head of growth and education at Smith.ai, which provides integrated phone and web chat services for solo and small-firm attorneys, including their virtual receptionist & intake service, live website chat, and Keypad cloud phone system. She has spent the last decade growing tech startups from New York to California, and has expertise in digital marketing, small business communications, lead conversion, email marketing, SEO, and event marketing. Maddy can be reached at maddy@smith.ai, and you can also connect with her on LinkedIn.
