As professional services business development advisor Alistair Marshall explained recently on LinkedIn: “All professionals say they grow their practice via referrals. However, this is risky as you can only grow your business at the rate that others are prepared to talk about you. You are not in control of your own destiny.”
I agree with Marshall. And I recommend lawyers put in place initiatives which will help increase the number of referrals they receive – as well as increase the number of new clients they generate from business development initiatives — above and beyond their referral relationships.
Lawyers need guidance in creating proactive referral initiatives
Frequently, however, lawyers don’t often know how to put in place and operate these sorts of initiatives.
For example, I was once asked by the managing partner of an elite boutique law firm – after he’d completed a foreign trip where he’d met with several potential referral sources – what next steps should he pursue in order to generate referrals from these meetings.
This is a common question/dilemma that lawyers face. Therefore, I’ve outlined the answer to this question below. I explain how lawyers can increase the likelihood they’ll generate referrals from the law firms they’re hoping will refer them work (I’ll leave to future posts information about what additional initiatives lawyers can take to generate new clients – above and beyond proactive referral generation).
How to generate more referrals for your law practice
Most lawyers, when building referral relationships – meet with counterparts and, in general, “hope” they’ll receive referrals from these meetings. Hoping you’ll receive a referral is fine – if you want to leave your firm’s destiny in the hands of others.
A proactive approach gives you more control over your future
If you want to build your firm client base in a manner that’s more in your control – and which will lead to more revenue than basic referral generation – take a proactive approach. How? Well, rather than simply hope you’ll receive more referrals – start by thinking like your clients. And how do your clients think? Well, if you’re a business-focused law firm – your clients are seeking to build their businesses. They partner in joint-ventures and build local operations – from manufacturing to sales to research & development. I could go on listing examples, however I’m sure you understand the point I’m making. Companies do many things to grow their business. They do so while also seeking to avoid regulatory pitfalls, which might create legal liability. I note this because as a law firm it’s important to be thinking about what commercial opportunities your law firm clients are interested in – but also what dangers they are concerned about. As both these are things your law firm can help them with.
A roadmap for generating proactive referrals for your law firm
If, hypothetically, your law firm operates in jurisdiction A, and you have a referral relationship with a law firm in jurisdiction B – instead of “hoping” for a referral – you can both work together to make more referrals happen for each other.
Here’s a checklist for what you can do to make this happen:
- Identify unique commercial opportunities (and dangers) in your jurisdiction.
- Transmit this information to your referral source
- Have your referral source identify which of their clients (or non-client contacts) might be interested in these opportunities.
- Your referral source then seeks to arrange a conference call or meeting of some kind between your firm and the referral source.
- You conduct the meeting where you review opportunities in your jurisdiction specific to that prospective client.
Firms who are referral sources should do this reciprocally for one another. If they do this and do it effectively, they will generate more clients than they will do if they simply wait for a referral. This effort puts you in the commercial mix of how entrepreneurial businesses operate. And there’s no reason your law firm shouldn’t be a part of these discussions and these reciprocal relationships. It’s how good, successful businesses operate. Is it hard work? Not particularly – as you’re simply collating information about your jurisdiction that you likely already know about. And your referral partner is reaching out to a client or contact. So, there’s no cold approach.
Going from theory to practice
What is perhaps most challenging about this initiative is understanding how to staff it internally, how to train staff to conduct the research within a firm to identify the opportunities, reach out to prospective clients, meet with them effectively, produce custom proposals, negotiate representation and remuneration effectively, and so on.
However, if your firm and some of your referral partners are willing to undertake these proactive efforts and help your clients achieve their commercial objectives while performing the legal work associated with those objectives – then you will generate more revenue. You can learn how to do this effectively. It’s not as difficult to do as it might seem. But it does take commitment and an openness to understanding how to operate like an entrepreneurial business does when seeking to add more clients: By establishing and following-through on a process designed to build clients and revenue through proactive action.
Most law firms and lawyers do not undertake this type of effort. But firms led by outstanding rainmakers and business-savvy managing partners and executive committees – do. And if you want to grow your firm revenue and stop being subject to the whims of the market – and take control of your firms’ destiny – then you should, too.
If you’d like to take proactive action to build your law firm client base through optimizing your referral relationships as I described above – I conduct one-on-one video coaching with lawyers from throughout the world on how best to establish and operate a proactive referral initiative (based on my experience of creating and implementing revenue-generating referral relationships with law firms around the world – on behalf of my law firm clients). For any questions or to arrange a discussion about how I might be able to help you – please complete the form below and I’ll respond promptly.