LAWYER REFERRAL NETWORKS: How Can They Benefit Your Clients?

• Author: Ritzer, Heather

For business-to-business organizations like law firms, a solid network of referral sources is an important part of business development. Organized referral network organizations are designed to facilitate and formalize the development of collaborative relationships between law firms and other professional services organizations. Being able to generate solid business leads and pass along referrals for work that you are unable to take on either as a result of a conflict, lack of the requisite specialized expertise or a jurisdictional issue, among other potential reasons, can allow you to maintain relationships with both the prospective or established client and other law firms/professional service organizations.

International law firm referral networks claim they can provide a way of expanding a firm's footprint without making a merger or international presence necessary. They ostensibly provide the reach and range of practice areas required to serve their clients without issues such as political infighting, which can be destructive to establishing collaborative working environments.

But are these benefits also reaped by the law firm's clients? In other words, do referral networks only benefit the people who pay to join them or do the benefits also trickle down to the clients who are paying the law firms?

We spoke with representatives at major lawyer referral networks to examine their perspectives on the issue. These networks provided key considerations law firms should bear in mind and approaches to take to ensure clients are able to benefit from these networks.

The Importance of Gatekeeping

Recently, referral networks came under fire when Dentons announced a new--and free--service it claims addresses one of the main problems in established referral networks. The problem with other referral networks, according to the firm's press release, is that because they require payment to enter, "you do not get the right firm for the client's particular need, just the firm willing to pay to be part of the referral network."

Certainly this critique points to the core strength of what law firm referral networks purport to offer: What makes or breaks a lawyer referral network is the rigor of its membership quality control. As in most business relationships, trust is the most valuable currency and knowing that the sources referred by a network will produce good work is vital. According to Robert Falvey, global ambassador and chairman emeritus at World...