One of the most famous law firm marketing myths of all-time is the story of the mighty referral.
I was most recently reminded of this story by a post on the Lawyer Marketing Consultant’s blog.
Usually, as told by the lawyer, the story goes something like this:
“I have been practicing for 25 years (the traditional start to most law firm marketing myths) and the only new business I need is from my referral network. You see, it’s free advertising.”
While referrals can be an excellent source of new clients, they should never be an excuse for excluding other practice growth strategies. Let’s look at the truth behind this myth.
First, referrals are not free. Lawyers always think that referrals are simply incidental to the practice of law. You represent a client. That client has family and friends who they refer to you in the future. Or, you have lawyer-friends that refer you cases because they like you or think you’re competent. If that’s your concept of your referral network, then you aren’t taking any advantage of that network at all.
The truth is that referrals are the product of good relationship-building. And just like every other relationship, they need to be nurtured. This nurturing has a cost associated with it. Whether it’s time or money, in order to get referrals, you must make an investment.
Second, referrals are usually un-targeted. Your former clients aren’t lawyers. They don’t know all the fields and jursidictions in which you practice. Further, while the lawyers in your referral network may have a general concept of the fields in which you practice, they aren’t able to target a specific audience. Furthermore, if their practice is similar to yours, they are probably cherry-picking the good cases anyway.
Finally, referrals are very limited when it comes to the volume of new clients they can generate. Even extensive referral networks can’t compete with other marketing efforts when it comes to volume of new clients.
The bottom-line is that referrals shouldn’t be your only source of new clients. There are numerous strategies available that will generate new clients with even better return on investment than referrals.
The trick is figuring out which strategies are working. The only way to effectively determine the success of any marketing service is by measuring return on investment. In the end, it is all that matters.
{ 2 comments… read them below or add one }
You make an excellent point Gyi. There are three basic ways to acquire new clients for law firms (and any other company. They are 1. Trapping 2. Hunting and 3. Farming. I would put relying on the referal network as Farming. Business 101 tells us that Trapping (think SEO, Website, and AttoneySync) and Hunting (calling, networking events etc..) are also essential parts of a solid business plan. Otherwise you are staring at the phone waiting for it to ring.
Agree with Randy’s comments and would add to the body of ideas the use of regularly scheduled networking functions as BD support. We’ve developed several of these for our law firm clients and they quickly grow into viable value-add opportunities: compliance/issue discussions; newsletter and case studies, etc. — all that generate a following and have led to increase in business.