Six years ago, we decided that representing corporate defendants and billing by the hour was not for us so we started our own law firm. We had a clear vision as to what would bring us success: yellow page advertising. That was the vehicle, we assumed.
Yet there is a little known secret about yellow page advertising: in the 21st century, it does not work. Minor flaw. Not knowing this, we poured over a million dollars into yellow page advertising.
Every single year of our practice, we earned more in fees from cases referred from other lawyers than any other source. Our current yellow page budget – except for a small local community book – is now zero.
The advantages of a referral-based personal injury practice are plentiful. First, obviously, there is no significant advertising budget.
Second, the clients are actually much better and much easier to work with on their injury case. Why? Because being referred by another attorney is a hallmark of success for a personal injury lawyer and, accordingly, your client looks at you differently than he/she would if you were retained out of the yellow pages.
Third, it increases the collective self-esteem of your law office. Our five lawyers are very ambivalent about the business side of the practice because we all consider ourselves lawyers, not business people. And the honest truth is we are self-conscious of our profession. A referral-based practice enables the personal injury lawyer to avoid the more disconcerting means of attracting cases, most notably yellow page or television advertising.
I have nothing bad to say about lawyers that advertise on television. Moreover, television advertising reminds people that they do have remedies when they have been injured by the negligence of another driver or a doctor. While many might disagree, I think this is largely a good thing.
Typically, most attorneys who advertise on television get the case and then refer it out to a competent counsel who will handle a case of that size. With some exceptions, that is the system. That is an efficient system for injury victims who otherwise have no clue as to who the best lawyers are for their particular needs.
That said, there is a stigma attached to television advertising. While I would argue it should not exist, it does. Frankly, our way gets us mocked less at cocktail parties. If you don’t care about this at all, you are not a human being. I know I do.
(Random digression: We talked about doing television advertising when we started our practice, saying that we would do something low key and dignified. Eventually, we killed the idea because if low key and dignified worked, everyone would be doing that as opposed to unseemly depictions of medical malpractice and sirens blaring in the background.)
Fourth, if you are doing it right (see below), you are going to get higher quality cases. The cases that come in from advertising are like shooting darts in the blind – you are going to hit the bull’s-eye now and again but, most of the time, you are going to miss. It’s a numbers game where the odds are against you and the time you spend fielding calls in cases that you are not going to handle, or in handling small cases to their completion, is great. In contrast, if your referring lawyers are sending you good cases, you earn higher fees doing the same work because – as any experienced attorney will tell you – working up a $50,000 case is largely the same as working up a $500,000 case.
Finally, and very importantly for us, it that it allows us to increase the geographical area we cover. Clients are not going to choose someone whose office is on the other side of the state or in a different state then they live or work out of the yellow pages. But if you receive a case by way of referral, the client will see you as the one they need to have and are more likely to accept the geographical distance between you (which, in 2013, is more psychological than anything else).
How do you develop a lawyer referral based personal injury practice? We developed ours by accident, but I do have a few thoughts as to what we did successfully to build our referral practice:
1. Join and become active in your state’s trial lawyers’ association
Getting yourself known in the legal community is the first step in building a reputation. I figured that getting involved in the Maryland Trial Lawyers’ Association would be like trying to get food from a fellow shark. But we have obtained millions of dollars in verdicts and settlements from others who decided that we were better suited – economically or by experience – to handle their client’s cases. I have not gotten directly involved myself – I’m a law professor who teaches three semesters a year – but two of our lawyers are on the Board of Directors of the Maryland Trial Lawyers’ Association and I think that helps. It takes them both out of the office more often than is sometimes optimal but they improve the prestige of our firm while also working for all injury victims in Maryland (which includes our clients).
2. Develop a reputation
How do you do that? The single best way to develop a reputation as the personal injury lawyers’ lawyer is to try cases successfully. Word of big verdicts spread with a speed that shocks me to this day. It is not hard to find an insurance company who will make an unfair offer. Try those cases, get some big verdicts, and people will notice.
Another way to develop a reputation is to establish yourself as an authority on personal injury subjects by speaking to groups of lawyers or publishing in periodicals that target lawyers. My partner, Laura G. Zois, speaks in Maryland and throughout the country on personal injury issues. I have co-authored a two-volume treatise on the handling of personal injury cases.
3. Choose your cases with care
You might think that taking every case that a referring lawyer sends to you will further the relationship. I think there is nothing further from the truth. Cases that have bad outcomes never further the relationship because they are too often fraught with hand wringing from the clients which leads to stress on the referring lawyer who sent you the case. If you cannot get a successful outcome – however that is defined to you or the client – do not take the case.
4. Choose your referring lawyers with care
We were sent a car accident death case from an out-of-state attorney earlier this year with a relatively insignificant liability dispute and high insurance limits. The referring counsel proceeded to set the stage for the entire litigation game plan we would pursue. The plan was highly flawed and required the creation of work for the sake of appearing to do something. He also wanted daily conference calls on such topics as “how to handle the clients.” We immediately withdrew from this case. I mean immediately.
5. Consider your state’s fee splitting rules
There are rules governing referral practices and the sharing of fees. Most jurisdictions support the idea of fee sharing because it often leads to the most qualified lawyers handling the most serious cases. Many states have adopted the American Bar Association’s Model Rules of Professional Conduct (“Model Rules”). These rules enable us to collect co-counsel fees on cases they do not have primary responsibility for. Most states require the client be aware of the fee-splitting arrangement. (Even if your state does not, do it anyway.)
6. Let Other Lawyers Know You Handle Referrals and the Fee Splitting Basis
With one exception, every referring lawyer we have, approached us as opposed to us approaching them. We have just recently started making more of an effort to let other lawyers know that we encourage referral work. We have not systematically gotte
n this message out because most people are focusing on the cases in front of them as opposed to time consuming marketing strategies. But it is a good idea to let others know that you are taking referral cases and letting them know about the results you have achieved for other lawyers.
7. Work Your Cases
The key is results, but you have to work up your cases well. Require their experts to produce financial records, find the right vocational rehabilitation expert, make them answer interrogatories fairly and do everything you can to get your case prepared for trial. This leads to results and this leads to repeat referring lawyers.
As your network grows and your referrals expand, you will be able to increase the quality of your case load. In 2002, we accepted anything that came through the door. Now, we will not accept any referral case that is not a serious injury or death case with a few exceptions, such as past referring attorneys that have been with us from the beginning, if the referring lawyer refers all of their personal injury cases to us or the referring lawyer is from out-of-state.
8. Focus on Personal Injury Cases
Many disagree with me but I think if you are a tort lawyer, be one. Easy fees in criminal and domestic cases are tempting but they distract you from your mission of being the best personal injury lawyer that you can be and getting the most out of your cases.
Finally, with an eye towards #6, I remind every lawyer reading this to give us a call if you have a serious or fatal tort case in Maryland.