I need to stop relying on referrals
Most of the firm’s work comes from a handful of sources: two estate agents, an accountant, a retiring partner’s contacts, a council panel. It has worked for years and it is the reason the firm has never needed marketing. It is also the reason a single phone call could remove a third of next year’s fee income. This page is about building a second source of work before the first one changes, without doing anything to damage it.
Referrals are the best work a firm gets: pre-sold, pre-qualified and cheap. The problem is never that the firm has them. It is that it has nothing else, and that it does not know how exposed it is until the day it finds out.
Trusted by firms including
How exposed is the firm?
Most firms have never written down where their work comes from, so the exposure is a feeling rather than a number. The questions alongside take an hour with the practice management system and whoever opens new files. The answers tend to be sobering, and they are the case for everything else on this page.
The number that matters is the share of fee income that depends on sources the firm does not control. A referrer can retire, sell up, be acquired by a chain with its own panel, fall out with a partner, or simply be courted by a competitor offering something the firm never thought to. None of those is the firm’s fault, and all of them happen.
If the top two sources together account for more than a third of new matters, the firm is exposed. If either of them is a person rather than an institution, the exposure has a retirement date.
- What share of last year’s new matters came from the top three sources?
By count and by fee. The fee figure is usually worse, because the best referrers send the best work.
- Is any one source more than twenty per cent?
If yes, that source is a strategic risk and should be on the partners’ agenda as one.
- Does each top source depend on one person’s relationship?
With a partner at the firm, or a person at the referrer. Either leaving changes the number.
- What came from search, the website, or the firm’s own name in the last year?
If under ten per cent, the firm has no second engine and the exposure is total.
- When did a referrer last reduce or stop, and what happened?
Most firms have a story. The question is whether anything changed afterwards.
- What would the firm do in the month after the biggest source stopped?
If the answer is “start marketing”, the answer is eighteen months too late.
Three kinds of referral dependence, and what each one needs
The word covers very different arrangements, and the second source the firm builds depends on which kind it has.
Estate agents sending conveyancing, IFAs sending wills and trusts, accountants sending company work, a mortgage broker, a developer. Steady volume, often with an arrangement that is explicit, and vulnerable to the referrer’s own change of ownership or to a competitor’s better offer. Referral fees in these areas must be disclosed to the client under the SRA Code; personal injury referral fees are banned outright under LASPO 2012.
Needs: a search presence for the same matters, so that the firm’s name is also found by clients who did not come through the referrer, and a website the referrer’s clients will be reassured by when they check.
A founding partner’s forty years of contacts; a well-connected partner who sits on every board in the town; a former client base that keeps coming back and bringing friends. The best work the firm has, and it belongs to a person who will retire.
Needs: the firm’s visibility built alongside the partner’s, so that when the partner goes the clients find the firm. Profiles for the next generation, reviews that name them, and a search presence that does not depend on anyone’s address book.
Legal expenses insurers, union panels, lender panels, local authority frameworks, membership schemes. Volume at a price, with the price and the volume set by someone else, and the whole thing re-tendered every few years.
Needs: direct private client work in the same matters at a better margin, found through search, so the firm is not forced to accept the next panel rate. The panel becomes one source among several rather than the business.
The time to build a second source of work is while the first one is still working. A firm that starts marketing the month a referrer leaves is funding a year of building from a third less income.
Building the second engine, in order
The second source for almost every referral-dependent firm is direct enquiries from people searching for a solicitor. It is the only channel that scales without a relationship, and it is the one the firm has never needed. Built in this order, it starts producing within a quarter and stands on its own within a year.
-
The firm’s own name
Make sure the referrals already coming are not being lost
Every referred client checks the firm online before calling. A thin website, no reviews, a profile that has not been updated since 2016, and a share of the referrals quietly go elsewhere and nobody ever knows. The first job is a website and a Business Profile that confirm what the referrer said, with the people, the reviews and the fees visible. It makes the existing source more efficient before any new one is built, and it is the foundation the rest stands on.
-
Past clients
The source the firm already owns and never uses
A conveyancing client will need a will. A will client has a family. A business client has employees and a lease. The firm’s past clients are its warmest source of new work and most firms contact them never. A quarterly email that is useful rather than promotional, a letter when the law changes in a way that affects them, and a reason to come back, sent to a list that PECR allows the firm to contact. Cheap, quick, and typically the first new files of the programme.
-
Paid search
Direct enquiries from the first month
For the matters the firm wants more of, in the places it serves, a narrow paid search campaign produces enquiries within weeks from people who have never heard of the firm or its referrers. It proves to a sceptical partnership that direct work exists, it tells the firm which matters convert, and it carries the numbers while the slower channel is built. It is not the long-term answer, because every enquiry is bought, but it is the right first answer.
-
Organic search
The engine that does not need to be fed
Matter pages that answer what a client needs to know, written with the fee earners; an office page and a Business Profile that make the firm visible locally; guides that earn the firm authority in its matters; reviews that accumulate. Six to nine months to produce files, and then the cheapest files the firm will ever win, at a volume that does not depend on anyone’s goodwill. This is the second engine. Everything before it exists to buy time while it is built.
-
New referrers
More of the kind the firm already has, deliberately
Referral dependence is not solved by finding more referrers, but spreading the existing kind across more of them reduces the exposure to any one. A firm with one estate agent sending 38 per cent of its work is at risk; one with six estate agents sending six per cent each is not. The firm’s new search visibility helps here too: a referrer is more willing to recommend a firm their clients have already heard of.
Keeping the referrers while the firm stops depending on them
Referrers notice when a firm starts marketing, and some of them wonder what it means. The honest position is the right one: the firm is growing, the referrer’s work is as welcome as ever, and the growth makes the firm a safer place to send clients. Two lists: what keeps a referrer, and what loses one.
- ✓Their clients looked after visibly well, and told so
- ✓Updates on every referred matter without being asked
- ✓A named person at the firm they can call
- ✓Work sent back the other way where it fits
- ✓Being told about the firm’s growth before they read about it
- ✓Any referral arrangement documented, disclosed to the client and within the SRA Code
- ✕Slow responses to their clients, which reflect on them
- ✕Their clients marketed to for other matters without the referrer being told
- ✕The partner who held the relationship leaving, with nobody introduced in their place
- ✕A competitor offering a faster service, a better fee, or simply more attention
- ✕A referral fee arrangement that puts them or the firm on the wrong side of the rules
- ✕Being taken for granted, which is the usual one
What the partners’ meeting needs to hear
The case for this is not “we need marketing”. It is “forty per cent of our fee income depends on two relationships we do not control, and this is the plan to make that twenty per cent within two years without losing either of them”. The first framing starts an argument about cost; the second starts a conversation about risk, which is the conversation a partnership is built to have.
Bring the numbers from the exposure questions, the names of the sources with their share, the retirement date on any personal one, and the budget worked out from the files the firm would need to replace a third of its biggest source. The budget page in this section sets out that calculation. Then set the target as a share: the biggest source under twenty per cent, direct enquiries over twenty-five, reviewed every quarter with the rest of the numbers.
The measure of success is not that referrals fall. It is that they stay the same while the firm grows around them, so that the day one of them stops is a bad quarter rather than a restructuring.
- Exposure
- Top three sources, share by count and by fee
- Risk
- Which are people, which are institutions, which are re-tendered
- Target
- Largest source under 20%; direct over 25%; by when
- Plan
- The five channels above, in order, with dates
- Budget
- From the files needed to replace a third of the largest source
- Review
- Quarterly, as a share of new matters by source
Questions firms ask about reducing referral dependence
-
Our referrers would be offended if we started advertising.
In our experience they are not, provided they hear about it from the firm first and their clients keep being looked after. Most referrers would rather send clients to a firm that is visibly thriving. The ones who object to a firm having any other source of work are telling you something about the relationship.
-
Direct clients are worse than referred ones. Why would we want them?
Direct enquiries need more qualifying, and a share of them are the wrong matter or the wrong place. That is a handling problem, and it is solved with a good enquiry process. The files that result are the same files, at a margin the firm controls, from a source nobody can take away.
-
We are busy. Why build a source we do not need yet?
Because it takes a year to build and a day to need. The firm that builds the second source while it is busy chooses the pace and the budget; the firm that builds it after the referrer leaves does it in a hurry, with less money, while the fee earners are short of work.
-
Should we pay referral fees to get more referrers?
Where they are lawful, they must be disclosed to the client and must not compromise the solicitor’s independence, and in personal injury they are banned. Beyond the rules, a referrer who sends work for a fee will send it to whoever pays most, which is the dependence this page is about, with a price tag added.
-
How long until direct work is a meaningful share?
Paid search and past-client contact produce files within the first quarter. Organic search takes six to nine months to contribute and a year to carry real weight. Most firms starting from under ten per cent direct reach twenty-five to thirty within eighteen months if the plan is followed in order.
-
What is the first conversation with you about?
The exposure questions, with real numbers. We will tell you how exposed the firm is in our view, which kind of dependence it has, and what the first quarter of building a second source would involve. If the firm turns out to be less exposed than it feared, we will say so.
Talk about where the work comes from
Bring the share of matters by source, or let us help you work it out. We will come back with an honest view of the exposure, the kind of dependence the firm has, and a plan for the second source that leaves the first one exactly as it is.
- An hour on the exposure questions, with the practice management data if you have it.
- A written view: the risk, the target shares, the five channels in order, the budget.
- A quarterly number for the partners: new matters by source, and the direction it is moving.