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The power of the almighty attorney referral shows no signs of letting up anytime soon. Even with the rise of digital marketing in the legal profession, referrals remain the most frequent source of new business for attorneys.
Because referrals are so important, it is common practice for attorneys to create informal "referral networks" by connecting with other attorneys and business professionals with complementary legal practices or businesses. An example is the real estate attorney who builds relationships with realtors in her town because of the potential overlap between their client bases. Another example is the trusts and estates attorney who connects with life insurance brokers for that very same reason.
Most referral networks solo and small firm attorneys join are likely to be informal, relatively local and comprised of people the attorneys know personally. But for attorneys seeking to expand their networks beyond their own area codes, there are large, formal law firm networks that connect attorneys from across the globe to enable them to better serve their clients. For some lawyers and firms, joining one of these networks could be a boon to their business. For others, joining could be a waste of time and money.
Some law firm networks, such as Dentons' Nextlaw Referral Network, proudly proclaim that there are no membership fees required to join. But those networks are in the minority. Most law firm networks have a traditional dues-paying membership structure.
Attorneys contemplating joining a network that requires a membership fee will need to consider whether an investment in the network is likely to pay off. Taking into account the additional considerations we discuss below should allow an attorney to quickly determine whether joining a fee-based network is likely to be a profitable endeavor.
When contemplating joining a particular law firm network, a firm must consider whether there will be a demand within the group for its legal practice(s). Most law firm networks have member firms with the usual legal practices - corporate and M&A, employment and labor law, intellectual property, litigation and the like. Other networks specialize in a limited number of practices. For example, State Law Resources, Inc. is a law firm network made up of firms that specialize in administrative law, regulatory law and government relations counsel. A law firm network made up of 100-something firms located in 50+ countries is unlikely to need another general litigator. However, an attorney who specializes in tax issues regarding employees of multinational corporations might very much be in demand in such a global network.
Referrals are two-way streets. Referrals first and foremost benefit clients because they provide access to additional expertise and services that a referring firm is unable to provide itself. In providing referrals, attorneys are able to strengthen their client relationships by helping those clients solve their problems. In determining whether to join a particular law firm network, an attorney should consider whether his or her clients could benefit from the knowledge and resources provided by that network.
Going back to our tax attorney example, the attorney’s clients might benefit from that attorney’s membership in a global law firm network that includes law firms in countries where those clients do business. On the other hand, an attorney who represents employees in discrimination lawsuits against employers is unlikely to have clients that could benefit from the attorney’s membership in that same global network.
Even if a law firm network has the potential to be a profitable endeavor for an attorney based on the above considerations, the attorney might still be on the outside looking in. Many law firm networks provide jurisdictional, geographical or practice-specific monopolies to their members. These exclusives provide immense benefits to the attorneys or law firms that join these networks. But they also could prevent clients from getting the best expertise possible because competition within the network is artificially limited.
For some solo and small law firm attorneys, joining a law firm network may provide immense benefits to the attorneys and their clients. However, all law firm networks are not created equal. Attorneys interested in joining a law firm network should take a look at the networks themselves, as well as their own practices and clients, before determining if joining a network is right for them.