How to build an effective referral network

New lead generation through client testimonials and referrals should be actively encouraged says Romey Ghadially. Here, he offers some practical advice and tactics, which can be used to secure them.

Are referral networks something that should just be left to chance? They certainly rely on a lawyer doing a good job for someone, then that person’s opinion being sought by another needing similar expertise. And, yes, that person who is being asked to refer has to be happy to do so.

Whilst it is definitely true that you have to do a good or excellent job if you want referrals, a lawyer does not necessarily have to leave it to chance to get them. They can build and manage networks that bring in a steady flow of good quality leads.

Create a plan
So why not consider your current business referrers? How many leads do they typically give you in a given time period? And what’s the quality of this work like? What sort of personality does each have and what motivates them? What reward or recognition do they seek from you in return?

Now look to the future. What would be the ideal volume and quality of leads you would like to generate from your network? What type of projects would these typically result in? Where there is a gap between what you receive now and the future, try and plot the following:

Who in your current contact base will refer such work?
Are the profiles of your most effective referrers recognisable in other contacts who operate in your market?
Which of your contacts know people who fit these profiles?
What associations or groups in your clients’ markets could offer similar individuals?

You now have the embryo of a referral network plan. It highlights the key people who will be central to achieving the referral targets and the potential new referrers that you need to cultivate.

Putting the plan into action
Some of your referrers know you very well; others know some of your capabilities. Your potential referrers probably know very little about you. Ideally, you want to motivate all of them to want to enter into a dialogue with you in order to uncover potential opportunities.

One way to motivate referrers to want to talk is through targeted campaigns—ones that address their interests and motivations (remember the profiles you defined). We have seen great campaigns that feed referrers with articles, news clippings, books and publications on topics that interest them.

Having sent several communications to them over several weeks, you can suggest a meeting. In this, avoid spending the whole time extolling the virtues of your firm. Your focus should really be on getting to know the referrer. This knowledge will enable you to explore a suitable way forward, one, which they are comfortable with. As Stephen Covey recommends in The 7 Habits of Highly Effective People: "seek to understand before you seek to be understood".

How to encourage referrals
Human nature in many lawyers often makes them bashful when it comes to encouraging referrals. They do not want to appear pushy, hungry or desperate for work. These are all very legitimate concerns and being any of these will be off-putting to a referrer. However, if your firm has done a great job, or has helped a client in a difficult or challenging situation, or has saved a client lots of hassle or money, why not extend that help and expertise to others?

Doing an excellent job
Once a referrer brings you a piece of business, it’s crucial that you do an excellent job. They will be watching you closely (albeit from the sidelines) to see that you do not damage their reputation or relationship with that client or contact.

Understandably, referrers are nervous when an adviser undertakes the first piece of work for one of their clients or contacts. The more effective lawyers help allay this by keeping them ‘in the loop’ and communicating to them as well as their client (content as appropriate) during the project’s progress. It is wise to double-check with your referrer (and also the client) in advance, whether they are happy with this, as some may not be.

Reciprocity?
There will be some referrers to whom just a "thank you" for the leads they pass on will be enough, however these will be few and far between. Those referrers who continue to bring a steady flow of good quality work will do so because they gain something out of the experience. It might not necessarily be because you give them leads in return. The type of reward the referrer wants will very much depend on who they are and what motivates them. If they are after personal fame, you can find ways within your firm’s contact base to bring them into touch with more people. If they are interested in a financial reward, you could explore a commission-based system.

Maintaining a steady flow
A referral network won’t provide a steady flow of good quality leads unless it is regularly maintained and fine-tuned. So keep in touch with the people in the network so that you are "front of mind" when an opportunity arises and your referrers are kept informed of the breadth of your capabilities.

The best referral networks are always in a state of evolution. Despite efforts to select good referrers, some do not deliver the quality or quantity of leads hoped for. It is therefore sensible to track leads, the quality of the business that they generate and how they are rewarded. It will help you to identify what improvements are needed. Over time, some of your contacts will move on to other things that prevent them from bringing you leads. Like your client portfolio, you need to replenish your referral network periodically.

Summary
Good referral networks are rarely left to chance. They are fed, managed, measured and rewarded to stimulate a steady flow of good quality leads. If you would like to exert more control over the quantity and quality of your referrals, start your plan today. You’ll soon reap the benefits of the time you invest.

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