Confession time. I completely stopped carrying business cards.
Not because I have anything against them. You just usually only need them in two situations.
- The more long-term relationships you have with referral sources or centers of influence, the more you need cards for THEM to pass out.
- The more you sponsor events, host booths, or attend conferences, the more you need cards for YOU to pass out.
Otherwise, you might not need them at all.
From the standpoint of a one-on-one lunch or a small networking event, I hate them. And here’s why.
If I give you my card, what are the odds you actually follow up with me?
If I do NOT have a card, then one of three things happens.
A) You were just asking to be polite, and now you’re off the hook.
B) You give me your card, and I control the follow-up.
C) We exchange information in a more two-way way, like phone numbers or social media.
Either B or C gives me the chance to actually stay in touch.
Plus, Captain Planet is my hero.
Why Referrals?
Let’s start here. Most law firms start 100 percent referral-based, right?
Referrals are cheap. I do not have to pay $1,000 for a lead like I might with ads. Instead, I attend free or low-cost events and maybe buy someone coffee.
Referrals are easy. At most, you have to learn to like other people. There are no hacks or tricks to referrals, and if someone tells you there are, I know who I’m avoiding.
Referrals are fun. At their core, they are just doing what you want to do with people you enjoy.
And the more you put the relationship first, the more cases show up organically.
My contrarian take is this. All law firms should always have a consistent stream of referrals. Better yet, all lawyers should have a group of referral partners.
I get why this feels controversial. Most people either sell you referrals or sell you other marketing tactics. And the more you split your marketing dollars, the less any one channel gets.
But let’s be honest. It is in YOUR best interest to diversify. Nothing is more diverse than 50 different people thinking of you when a legal issue comes up.
If Google changes its algorithm tomorrow, referrals still come in.
If Facebook goes down, referrals still come in.
If one referral source stops sending cases, the others are still there.
My two cents is this. Your referral stream should cover your overhead. Everything else is gravy.
For example, if your average case value is $5,000 and your monthly overhead is $50,000, you want at least 10 referred cases per month. Realistically, that might mean 15 referrals to close 10 cases.
You can still invest in SEO, billboards, social media, mailers, and events. But when your overhead is already covered, it is much easier to market well. The less desperate you are, the better your decisions become.
Over the next few weeks, we will go deeper into this. But first, we need to answer one question.
How Many Referral Sources Do You Need?
One more. Kidding. That is not a real answer.
We need to do some math. I know, you went to law school to avoid math. Unfortunately, marketing requires it.
Number of referrals x close rate x average case value = revenue
Using the example above, we need 15 referrals per month at a 66 percent close rate to land 10 cases at $5,000 each.
That is 180 referrals per year.
If the average referral source sends you 10 cases per year, you only need 18 people. That is very doable.
Five cases per year means 36 people. Still doable.
Two cases per year means 90 people. That might be pushing it.
Realistically, it usually looks something like this.
A core group of 10 people who send one case per month.
Another 10 who send one case per quarter.
Another 10 to 20 who send one case per year.
And a larger group who may send something occasionally or not at all.
No more math, I promise.
Who Is in the Core Group?
This will be different for everyone, but your core group needs to meet three criteria.
- They see your clients at the moment they need legal help.
- They already refer people they trust to professionals they like.
- They like you and trust you.
That’s it.
They See Your Clients in Their Time of Legal Need
Estate planning lawyers work well with financial advisors.
Personal injury lawyers work well with pain management doctors.
Criminal defense lawyers work well with bondsmen.
Every practice area has natural referral partners. The key question is this.
Where does my client go when they need help, other than directly to me?
For reactive law like PI or criminal defense, they must get help from someone.
For proactive law like estate planning or real estate, they may get advice before they even realize they need a lawyer.
Those are your people.
Segment your core group in a way that makes sense so you can actually support them.
For chiropractors, we break them down by geography. Clients do not want to drive 30 minutes each way three times a week.
For financial advisors, segmentation might be age, location, language, or whether they are independent or part of a large firm.
Then you need to ask yourself how many you can support in return.
At my firm, we aim for just under 50 percent of referrals from doctors and just over 50 percent from everyone else, like lawyers, clients, and business owners.
That way, referrals flow both directions, and clients still get great care even when we do not take the case.
The goal is a win for you, the referral source, and the client. Think tricycle, but without the judgment.
They Refer People Who Actually Need Help
Here is the biggest mistake I made early on. I tried to convince people who never referred anyone to start referring to me.
That was a mistake.
If they do not already refer, they do not know when to refer, how to identify a good case, or how to make a warm handoff.
This also applies when someone is a great referral source, just not for your practice area.
My financial advisor sends multiple estate planning cases every week. He has sent me two PI cases in two years. That is not a problem. I just do not do estate planning.
It is much easier to redirect someone who already refers than to teach someone how to do it from scratch.
Learn from my mistakes.
They Like and Trust You
If people do not like or trust you, that is a deeper issue. That is more of a man-in-the-mirror conversation.
At the end of the day, referrals come down to likability.
Are you funny, thoughtful, helpful, optimistic, or dependable?
Figure out your strengths and lean into them.
Next week, we will talk about how to find more referral sources and how to vet them properly.
Until then, have a wonderful week. And may your college football team win, or at least may the stadium internet go down so you get free food like Nebraska versus Northwestern.
Until Next Friday!