Page 59 - The Handbook - Law Firm Networks 2018
P. 59
The Handbook: Law Firm Networks
When the idea of a network is proposed, one of the first thoughts is that the network will produce referrals,
i.e., income. Many see network membership as producing in-bound referrals of clients. Others join networks
to have qualified firms to which they can refer business. They recognize that referring a good client can be
risky. Referring to a network member they know has the least risk.
An example is when a client needs advice in another country; the network can be used to locate a member
who can assist. The member retains the clients and the member in the distant location may obtain business.
Network membership allows the member to assist its clients. The client is not tempted to go to a firm that has
a number of branches. The most simplistic value is to be able to refer the client to a competent professional
for information and possible business. This is a Type 1 referral. It is simple, easily understood, and
fundamental.
These basic concepts do not do justice to the power of referrals. It would be like judging a carpenter’s
potential simply by looking at his hammer, saw, and screwdriver. The reason the general members see
referrals in these simplistic terms is because of the geographic perspective of the network. If the only
expertise you can access is based upon location, the “referral to” or “referral from” terminology and concept
apply.
Referrals are much more than then in-bound and out-bound cases; they are about using information in the
network. One piece of the information is contacts in a location. This is important but, overall, a very minor
component of the information. The access to resources, including information, is by far the most important
component of referrals.
In-bound and out-bound matters are Type 1 referrals — the hammer, saw, and screwdrivers of the
professional network. They are handled by rules in the profession. For example, in the U.S. legal profession,
no referral fees can be paid.269 The responsibility for payment by the client is defined.270 Usually the client
will be responsible directly to the firm receiving the referral. The referring firm is not liable unless there is an
agreement to the contrary.
Exchange of information is a Type 2 referral. The client needs the matter handled, but there may be many
complex issues that can easily answered by someone on location but not in a book or online. Members can
turn to the network for this information using a “free advice” policy. Today, technologically developed
networks can tap the knowledge of thousands of professionals by doing a search of the network website.
These referrals cement a long-term relationship with the clients who know that they can be fully represented
by their firm.
Creativity is required for a referral to be Type 3. They are much more complex because it requires the
members to see the network as not only a toolbox, but also a whole range of utilities that can be deployed
because of the self-interest of the other members. For example, a member could establish a team based on the
needs of clients in different states or countries. The team is actually coordinated by one of the members of
the network. Once this model is developed, the team leader could reach out to other clients they know have
businesses in different locations. Common forms could be written that allow the participating members to
reach out to their clients in a similar way. The documentation could also be shared with other members.
269 See infra Chapter 6, Marketing the Network – Creating the Brand.
270 See International Bar Association, International Code of Ethics, INT’L BAR ASS’N (1988),
www.ibanet.org/Document/Default.aspx?DocumentUid=A9AB05AA-8B69-4BF2-B52C-97E1CF774A1B: “Lawyers who engage a foreign colleague
to advise on a case or to cooperate in handling it, are responsible for the payment of the latter’s charges except where there has been express
agreement to the contrary. When lawyers direct a client to a foreign colleague they are not responsible for the payment of the latter’s charges, but
neither are they entitled to a share of the fee of this foreign colleague.”
- 46 -
When the idea of a network is proposed, one of the first thoughts is that the network will produce referrals,
i.e., income. Many see network membership as producing in-bound referrals of clients. Others join networks
to have qualified firms to which they can refer business. They recognize that referring a good client can be
risky. Referring to a network member they know has the least risk.
An example is when a client needs advice in another country; the network can be used to locate a member
who can assist. The member retains the clients and the member in the distant location may obtain business.
Network membership allows the member to assist its clients. The client is not tempted to go to a firm that has
a number of branches. The most simplistic value is to be able to refer the client to a competent professional
for information and possible business. This is a Type 1 referral. It is simple, easily understood, and
fundamental.
These basic concepts do not do justice to the power of referrals. It would be like judging a carpenter’s
potential simply by looking at his hammer, saw, and screwdriver. The reason the general members see
referrals in these simplistic terms is because of the geographic perspective of the network. If the only
expertise you can access is based upon location, the “referral to” or “referral from” terminology and concept
apply.
Referrals are much more than then in-bound and out-bound cases; they are about using information in the
network. One piece of the information is contacts in a location. This is important but, overall, a very minor
component of the information. The access to resources, including information, is by far the most important
component of referrals.
In-bound and out-bound matters are Type 1 referrals — the hammer, saw, and screwdrivers of the
professional network. They are handled by rules in the profession. For example, in the U.S. legal profession,
no referral fees can be paid.269 The responsibility for payment by the client is defined.270 Usually the client
will be responsible directly to the firm receiving the referral. The referring firm is not liable unless there is an
agreement to the contrary.
Exchange of information is a Type 2 referral. The client needs the matter handled, but there may be many
complex issues that can easily answered by someone on location but not in a book or online. Members can
turn to the network for this information using a “free advice” policy. Today, technologically developed
networks can tap the knowledge of thousands of professionals by doing a search of the network website.
These referrals cement a long-term relationship with the clients who know that they can be fully represented
by their firm.
Creativity is required for a referral to be Type 3. They are much more complex because it requires the
members to see the network as not only a toolbox, but also a whole range of utilities that can be deployed
because of the self-interest of the other members. For example, a member could establish a team based on the
needs of clients in different states or countries. The team is actually coordinated by one of the members of
the network. Once this model is developed, the team leader could reach out to other clients they know have
businesses in different locations. Common forms could be written that allow the participating members to
reach out to their clients in a similar way. The documentation could also be shared with other members.
269 See infra Chapter 6, Marketing the Network – Creating the Brand.
270 See International Bar Association, International Code of Ethics, INT’L BAR ASS’N (1988),
www.ibanet.org/Document/Default.aspx?DocumentUid=A9AB05AA-8B69-4BF2-B52C-97E1CF774A1B: “Lawyers who engage a foreign colleague
to advise on a case or to cooperate in handling it, are responsible for the payment of the latter’s charges except where there has been express
agreement to the contrary. When lawyers direct a client to a foreign colleague they are not responsible for the payment of the latter’s charges, but
neither are they entitled to a share of the fee of this foreign colleague.”
- 46 -
