Quid Pro Quo: referral source development, soliciting referrals

REFERRAL SOURCE DEVELOPMENT

Quid pro quo

Getting referrals from other professionals is, in many cases, a two-way street

In a perfect world, all of your new work would be referred to you by current and former clients who were so enamored of your legal acumen that building your practice would never involve anything more than simply doing great work.

Sadly, you're not always going to do great work, and even if you did, it would be tantamount to casting pearls before swine, since some of your clients wouldn't know great legal work if it smacked them in the snout.

Thus, most attorneys have to rely in part on the collective kindness of strangers: other attorneys, CPAs, bankers, the Psychic Network, etc. Referrals from other professionals come about as the result of one of the following stimuli:

They like you and want to do you a favor.
You are the only attorney they can think of who does what the prospective client needs (this points out the importance of specialization and being known for unusual expertise).
You are the last attorney they saw who does what the prospective client needs (this points out the importance of getting out more often).
They think they owe you one (i.e., you sent them a client and, in a rare instance in which their sense of fair play overwhelms their more base urges, they want to even the score).

There’s not much I can say about points 1 and 2; people either like you or they don’t, and either you have unusual expertise or you don’t.

But referrals that result from points 3 and 4 are a different story. They can be noticeably enhanced by initiating contact and keeping in touch with other professionals and through a conscious effort to create referral opportunities for others.

The benefits of referral source development

Before we launch into a tactical discussion of building a referral source network, let’s make sure you’re clear on a key point: Unless you have a solid- gold knack for direct solicitation of clients, encouraging referrals from other professionals is an absolute necessity in expanding your practice. The benefits:

It’s relatively easy, and you can do it over lunch. After all, you have to eat, so you might as well do it with somebody who can send you clients.
There’s little risk of rejection. Nearly every attorney, CPA, etc., you’re likely to invite to lunch knows they’re supposed to be taking people to lunch, too, and by calling them you’ve done them a big favor.
Third party endorsements have credibility. Someone else saying nice things about you is much more impressive to the prospective client than you saying nice things about yourself.
It’s a gift that keeps on giving. Properly nurtured, a good referral relationship can result in multiple clients.

How to reach them

WARNING: This section is pretty marginal. To get to the good part, click here.

There probably is no entirely bad way to communicate with a potential referral source, although you should think twice before inviting a straight-laced prospect to join you and your old college buddies for Amateur Night at the Double D Club.

Here are some reasonably safe, arm’s length ways to reach prospective non-client referral sources:

Get published. If there’s a trade or professional publication that a lot of your prospective referral sources read, write an article that shows what you know about topics that are important to them.

Self-publish. If your firm publishes a client newsletter, use it to reach prospective referral sources. If your firm doesn’t have a newsletter, write your own.

Speak to groups. Provide the program at a trade or professional association meeting, or write a letter about your presentation topic and mail it to service clubs (Rotary, Kiwanis, etc.) whose members include potential referral sources.

Join associations related to your targeted groups. This offers you easier access to writing, speaking and social opportunities; keeps you up on industry issues; helps you make contacts; and allows you to decorate your lobby with magazines that have amusing titles.

Put on a seminar. As everyone knows, seminar presenters are experts per se, and that’s a theme you want to promote. For the one in 15 invitees who show up for your seminar (up it to two if you offer to feed them), you’ll have an undisturbed hour or so to dazzle them with your savvy and to make a personal impression. As for the no-shows, they at least received your invitation and may be more aware of your expertise than they were before.

What if it doesn’t work?

By themselves, "wholesale" referral source development tactics probably won’t get you many clients. You can do all of the things suggested above and more – publish scholarly and insightful prose that would have put Learned Hand to shame; deliver the keynote address at the National Sash & Door Jobbers Association convention; and have 115 CPAs show up at your tax-dodge seminar (complete with lunch and free pocket protectors with your name and phone number on the flap) – and six months later the only referrals you receive may be from Lawyer Referral Service and your aunt.

Don’t be surprised. As safe and appropriate as wholesale referral source development tactics are, they rarely do more than set the table for the real thing: developing personal and mutually beneficial relationships with people who can send you business.

One major problem that afflicts many attorneys in developing referral sources is that they’re still high school seniors at heart. Inviting a prospective referral source to lunch is their grown-up equivalent of calling to get a date for the prom, with the expectation of being turned down, not realizing that the person at the other end of the line is probably just as desperate to establish a relationship as they are.

An even bigger problem is that too many attorneys think that doing lunch is not just the first step in creating a referral relationship, but the only step. For them, referral source development consists of aimlessly trying out the newest cafe, at the firm’s expense, with any warm body who isn’t a member of the firm, and then sit back and wait for referrals that never come.

Be ready to talk business

Putting teeth in your first meeting with a potential referral source involves knowing your purpose and being faithful to it.

Have a plan. Know what you want to accomplish during your lunch or meeting and clearly express that desire.
Get to the point. Don’t be afraid to ask, "What can we do to generate work for each other?"
Educate your prospects. Make sure they understand what services you offer and how they should use you. Tell them what kind of work you want more of, what kinds of clients you want to attract, and how they can find out if their clients, friends, etc., need your services.
Allow them to educate you. After you’ve gone through your wish list, ask your lunch companions to give you theirs.

To get referrals, make referrals

To look like a bona fide big shot, show up at lunch armed with a prospect for the other person. If you can open the conversation with, "I have a client who needs (fill in the blank) and you may be able to help," you will elevate your status from beggar to broker – especially if you’re not making it up. Better yet, make the referral first, then set up the lunch. If nothing else, the other person ought to pick up the check.

Be ready to refer when asked. Keep an "A" list of your favorite potential referral sources, from a variety of occupations and professions, complete with address and phone number.

Create opportunities to make referrals. It kind of goes with the territory for an attorney to be a consumer of referrals rather than a generator. Consequently, you will probably have to go out of your way to find out what your clients’ other professional or business needs are so you can refer them to someone.

This isn’t hard, especially with commercial clients. If you’re trying to pry referrals out of a certain CPA, ask a client, "What CPA do you use?" If they don’t have one or if you suspect they don’t feel bound for life to the one they have, you’ve created a chance to make a recommendation.

(If you sense a consistent theme here regarding CPAs as referral sources, it’s with good reason. Business owners tend to call their attorney only when they get in a jam, but they may talk to their CPA every other week. The close working relationship between most CPAs and their commercial clients allows them to recognize the need for and recommend legal help ... that is, when they can resist practicing law themselves.)

Don’t make referrals in secret. If you refer a prospective client to someone, be sure to let the beneficiary know about it. There are four basic ways to do that:

After you make the referral, send the beneficiary a letter.
Better, after you make the referral, call the beneficiary.
Better still, call while the referral is sitting across your desk from you.
If you want to engage in some real theatre, hand deliver. Call the beneficiary and say, "(First name), I have (so-and-so) here in my office and (he/she) needs some help with (whatever) and I’d like to bring (him/her) over and introduce you right now."

Keep score. Don’t waste referrals on people who never reciprocate.

Remember to say, "Thank you"

Assuming the beneficiaries of your referrals honor the spirit of quid pro quo, you may see some referrals coming back your way, and you need to know how to respond with appropriate thanks.

Form letter. At the very least, have a form thank-you letter that your secretary can crank out.

Hand-written note. Keep a supply of note paper and envelopes handy, and as soon as the client is out the door scribble a thank-you to the referral source. Illegible handwriting is not necessarily a liability; in fact, utter illegibility may be a plus, since it frees you from having to give a lot of thought to content.

Phone call. It’s a personal touch, it saves time and trees, and it will give you the chance to do some additional business or set up a lunch.

Gift. It’s safe to assume that other professionals have a rough idea of the fee potential of the matter they’re sending you, so be sure that whatever you give them is commensurate with the worth of the referral. Try to personalize the gift. Getting to know your referral sources well enough to recognize what they like and don’t like isn’t just good business, it also saves you from giving opera tickets to someone who thinks La Traviata is a car. (I know, the ethics rules say you can't give a referral source anything of monetary value, so make sure your thank-you gifts are worthless. Safe harbors include Firestone tires, Arizona Cardinals tickets, or a weekend getaway to Fresno.)

Thank them even if the referral doesn’t pan out. At the moment he or she referred a potential client to you, the referral source’s job was done. It’s not his or her fault if you and the referral don’t hit it off. Unless it was a worthless matter that a competitor sent your way just to waste your time, find some way to show your thanks.

Refer someone to them. Soon. They may be just as intent on keeping score as you are.

Finally, keep in touch

Create and maintain a database of your referral sources so that you can call them once in a while, mail them your firm newsletter, invite them to seminars and other firm events, send them Christmas cards and tickle them for entertainment or other follow-up. That’s the kind of nurturing that can turn a one-time referral into an extended and profitable relationship.