Marketing a Law Firm | Creating a Referral Network

Before I get started on today's topic - creating a referral network, I wanted to thank all of you so far who have submitted your starting a law firm stories. So far they have all been great, I'm looking forward to posting them, and I appreciate your generosity. Keep them coming!http://www.blogger.com/img/blank.gif

Now, the topic of the day - creating the referral network, or, in a nutshell, how to market a small law firm. A lot of this information was created during a discussion I had today with a guy named Henry. Henry works for RJon Robins, who owns a business called "How to Manage a Small Law Firm. The best way to describe these guys are as business coaches. They help you get your hands around managing a law firm, marketing a law firm, and building a successful law firm. I've talked about his services before (see this post on law firm coaching), but since this information came directly as a result of that conversation, I wanted to mention them again and encourage you to check them out.

Okay, on to the meat of it - building a referral program for your business.

You don't have to be in business long to know that referrals are like gold for law firms. In most cases the people come pre-qualified to sign up with you (they already in some ways know, like, and trust you) and are excited to gets some help. They typically pay on time and in full (they don't want you running to their referral source and chewing them out) and are happy to have your help.

But referrals don't grow on trees. They have to be cultivated. To maximize your referral base, just like everything else, you need to have a system in place to make sure you are cultivating all of those wonderful resources. Here's one system that I've discovered (though I have yet to implement - that was the point of the call) that makes a lot of sense.

To start, you're going to need to make a list of basically everyone you know. This would include former clients, current clients, attorneys, car repairmen, plumbers, family, friends, enemies, competition, everyone. Just make a huge list. Then you are going to go through each person and divide them into three groups.

Before you start dividing up I'd encourage you to put this information in some kind of a spreadsheet so you can keep track of it. The idea is, over time, to move people from one group to another. Just trust me on this - use a computer.

Group one we'll call the "Top 20." Though it doesn't necessarily have to be 20 people, and when you start out it won't be 20 people (it might not be any people), these are the people that have given you two or more referrals in the last year. At least that's what makes them top 20 in my business (and as an aside, criminal defense is one of the hardest markets to build a referral base from - the clientele are simply more limited). It may be three or more or it may just be one, depending on your line of work. Bottom line - these are your star referrers.

Group two is called the farm team. These are like the minor leaguers of your referral network. These people have tried to refer you business in the past and it hasn't work out or have referred you business but they haven't cracked into your Top 20. I wouldn't put any time limit on this for when they referred you the potential business.

Group three is simply who you know. They haven't sent you business and aren't in the Top 20. You just know them.

Once you've done that (or before if you want) you should make a list of all of the categories of people that may be potential referral sources to you. This list should be specific. For example, lawyers would not be a good category for me, but family law attorneys and personal injury attorneys probably would (a lot of access to individual clients, etc.). For me, the criminal defense lawyer, the kinds of categories that I came up with were:bar owners; bail bondsman; college students; family law attorneys; bankruptcy attorneys; small business lawyers; personal injury lawyers; union leaders; and employee assistance program managers. It took me ten minutes to come up with this list and there may be more.

Once you've got your categories, go down your list and categorize people. If they don't fall into a category, give them one that describes them well.

Don't look now but you've just put together a pretty legit referral list!

But it doesn't stop there. Now that you've got this list, you're going to want to do one thing immediately - get in touch with your Top 20 and thank them for being a part of your law firm business. Take them to lunch. Let them know you appreciate them. Then in a month or two do it again - put it on the calendar so you don't forget.

After you've done that you're going to use this list to help you market your law firm. The idea is to move the people in the "who you know" category into the "farm team" category and the "farm team" people into the "Top 20" category all the while increasing all of the categories! Sounds easy right? Well it is! You just have to do the work!

Once you've taken out the Top 20 and thanked them for their help, take a look at all of the categories you have. Now, look at the farm team. You know these people are interested in helping you - they've already sent you business. Do any of them have contacts in any of the categories of people that are good referral sources for you (or are they in one of those categories)? They do?! Great, then get an introduction and let them know how you can help them look great by being a great referral source. (Obviously you should do this with the Top 20 too, and for that matter the "who you know" people). Go meet those people and include them in your list.

Believe it or not, you've just created a referral network for yourself. You're welcome.

The hardest part of this, like with everything in life, is getting started and getting it going. It's going to throw you out of your comfort zone a little, but that's okay. That's actually amazing. Give it some effort and the returns will be ridiculously high.

Now, for one final thought, the last thing we talked about in our conversation, and something to think about when you are marketing a law firm, are the 6 strategies for successful marketing of a service business, in order of importance:

1. Contact and follow up with past, current, and prospective clients;

2. Network and referral building;

3. Public speaking (live, webinars, podcasts, etc.);

4. Writing and publicity;

5. Promotional events (sponsoring stuff); and

6. Advertising.

As you might expect, absent some very special circumstances, the return on investment drops off dramatically after number 3.

Hope you enjoyed the post and learned a little bit about law firm management. I'll put up someone's story tomorrow and comment. See you tomorrow!

Starting a Law Firm | Three Important Lessons

I had a happy with a guy last week. I'd met him through a friend. When I first met him he had just finished his LLM in tax and was in the job hunt - and it was a tough job hunt. I, of course, told him he should think about going out on his own. "The money is better, the work is better, and you'll be happier," I told him. He wasn't buying it.

Fast forward to last week, probably a year since we last met and talked. He was out on his own, doing okay but not great. He gets pretty much all of his business from referrals, worries about charging too much money, and is scared to death of flat fees. But he must be doing something right, because he is making some money.

After talking with him for a while I realized I needed to write this post. I'm pretty sure I've talked about these things in the past, but it never hurts to hear them again. These three lessons are extremely important to starting a successful law firm. Seriously. If you can get these lesson through your thick skull (I never said they were easy lessons) you will increase your chances of success by one hundred fold. So let's get to it.

1. You're Either In or You're Out

I understand that some people just don't want to run their own business. I'm okay with that. And I understand that the economy is tough and that jobs are hard to find. That's simply going to be the reality moving forward. These two truths make finding a job tough, and when people need to eat, they'll do things for money that take them out of their comfort zone (not too far out of their comfort zone mind you - for all you with a less than biblical mind). This means, for some going out on their own.

But here's the thing. You can't have one foot in the job search pool and one foot in the starting a law firm pool. It simply doesn't work. If you find yourself going out on your own the best way to do it is to jump in headfirst and swim.

People can tell when you aren't committed to doing something. And when that something is running a business that is supposed to be designed to help them, they get nervous. Nervous people don't hire. Trusting people hire.

In a nutshell, lesson number one is this - if you can't find a job and decide to go out on your own make a commitment to really go after it for a year. Just one year. Stop submitting resumes. Stop telling people you are looking around. Start telling people you are the owner of XYZ Law Firm. Start telling people how you can help them solve their problems. Do a little marketing. You might be surprised by what happens.

2. You Have to Spend a Little Money to Make a Little Money

This one sounds obvious, but for me, at least, it was really hard to put into practice. Part of our training as lawyers taught us to look at all the angles, see all the faults, document all the possible ways a project could go wrong. That's great when you are working for a client and assessing risk, but it's terrible when you are trying to make business decisions.

For example, I was talking to my buddy at this happy hour. We were talking about setting up a website. I told him it was a must (and it is). He asked me where I hosted my site. I told him I had no idea - I use the host my web guy uses for all of his sites because he likes them. He asked me how much it was. I said it was like $10 a month. He looked at me, dead in the eye, and said "I found one that works okay that's free."

Great! Free! Works okay! That's amazing! Okay probably means 80% of the time. What a way to evoke potential client confidence.

Spend the $10 a week to have reliable service.

I know if you are starting a law firm you are probably doing it on a shoe string budget to start. I get that. But at some point you are going to have to start spending a little bit of money. The question you need to ask yourself is if the expenditure is going to make you money, and you make money in two ways.

First, if something frees up your time so you can spend it making more money, that is worth the money. Great examples of this are assistants and any technology that makes you life easier. My assistant, for example, is great. She does a whole bunch of stuff that I could probably do if I wanted to but eats up a bunch of time I could be spending doing other, more productive things (like writing this blog).

Second, if something brings in more money, it's worth spending money on (and most of the time it's worth experimenting with). This, in a nutshell, is advertising and marketing. There are a ton of free things you can do to market your law firm, which maybe I'll talk about on Friday, but there are other paid things you can do that can really help.

I know what you are saying right now, "how do I know if these things will work?" Bottom line is, you won't until you try. But the key here is to try with a reason. You need to be asking yourself one question at the end of the day - does what I'm paying for bring in more money than I'm spending? If it does, then it's probably worth holding onto for a while.

Here's an example from my practice. As most of you know, I'm a DUI defense and criminal defense attorney. Most of my business comes from the (free) internet and from referrals. From time to time I will be persuaded to try a paid service that generates leads for my businesses. (As an aside, I haven't found one yet that works, but I keep on trying). This time the service I tried was myduiattorney.org. People go to their site, ask for a consultation, and my phone rings. They've got great search engine placement, so I thought I'd give them a try, even though I was skeptical that the only people that ask for consultations on sites like those are by definition bad leads. So I signed, up. But here is the important part. I made sure I did two things.

1. I made sure to sign up for a long enough term to see if it was producing but short enough not to lose my shirt if they sucked; and

2. I made sure to TRACK ALL LEADS coming from them to see how they turned out.

As I suspected, the leads were not the kind I was looking for. So at the end of the trial period, I cancelled.

But here's the important lesson - I spent the money to check it out. I didn't dismiss it simply because it cost money. I didn't want to lose out on a potential opportunity so I checked it out. If it made money I would have stuck with it. It didn't, so I dropped it and moved on, attributing it to the cost of running a law firm.

Don't think of things in terms of what they cost - think of them in terms of what you will gain. If it's worth it, pull the trigger.

3. Don't Try. Do.

I've got two stories to get this lesson started, but before I tell them, I want to let you all in on a little secret. I don't know everything. Yep. That's right. I make mistakes. I have fears. I have limitations. But I'm working to get over them. Which leads me to my first story.

I credit a lot of the success of my law firm to the owner of the first firm I rented space from. He didn't have a lot to teach me as a lawyer, but he was an astute businessman. And while he didn't spend a lot of time with me one on one talking business (though he did do that a couple of times), I was able to pick up a lot (both things I thought were good and bad) from seeing the way his firm functioned.

One of the things I'll probably remember forever is a time he got after one of his employees a little bit. He'd asked him to do something and he hadn't gotten it done. He asked the guy what he was going to do about it and he said "I'll try to..." and that's about as far as he got. Once those words came out of his mouth the owner said "do me a favor. Come over here and sit in this chair. (he sat) Now try to get up. No, don't get up, try to get up. Stop trying and start doing." Seemed like a harsh lesson at the time, and I probably wouldn't have taught the lesson in that way, but it makes a lot of sense. No trying. Only doing. (I'm pretty sure that lesson was taught in Karate Kid too, but that's for another discussion).

That story leads me to my second story, and this third lesson. I was talking to this guy at happy hour and we were talking about all of the ways he could ramp up his business. This discussion included things like start a blog (which you should all do), raise fees, ask for more money, etc. Every time we started talking about something he'd say something like "I'll try to do that" or "I'll think about it." Finally after one of these times I just said, "no you're not. Do you even want to talk about this stuff? We can talk about something else if you want. But I can see it in your eyes that you aren't going to do any of this stuff, so why waste our time." It shocked him, but it was the truth.

Bottom line, you need to get started today. Stop making lists and thinking about things and researching and discussing and planning. Start. The great thing about it just being you (or a couple people) is that if you make a mistake you can just change course until you get on the right course. Starting a law firm is all about experimenting, tracking, and analyzing the results to see if you are on the right course. If you are on the wrong course, try something else. But I can guarantee you you will never be able to plan a perfect anything the first time - there are variable out there that you don't even know exist yet.

I hope these lessons help you. I know for me, just writing about them, reminds me of some of the things I need to do stay on a successful path. As always, comments, questions, concerns about this stuff, just let me know. I'd love to chat.

And, if you've made it this far, then I can tell you really care about starting your law firm. Because of that I'm going to give you a chance to get your story out there and get some Google love. If you've started a firm recently I want to hear about it. Send me a post, at least three hundred words long. I want to know about why you started, how it's been going, and what your next steps are. Let me know what you practice, with a geographical location, and what your website or blog is, and I'll include a link with the post. Good luck!

Marketing a Law Firm | The Dangers of Outsourcing Your Marketing

I've written in the past about marketing your law firm and outsourcing your marketing efforts to third parties, and to summarize, I'm generally against it, particularly when it comes to online marketing. There's just too much opportunity for you to get in trouble (don't believe me, here's a great example of what can happen when you outsource law firm marketing). I hadn't written or thought about it much until this week, when I got an interesting fax.

I'm not going to tell you who the fax was from, because I don't want to promote them in any way, shape, or form. But I will tell you what was in the fax. Here's what it said:

Having too few reviews or want to boost your online presence?

We can improve your online reputation by posting positive reviews on major review sites. People go there when they want to find good, reliable services in which they can trust.

Having positive reviews on those sites will drive more people to choose your business and will make your name stand up from all of the other competitors.

Our services include:
- Improving your reputation by posting good reviews and other links;
- Suppressing negative reviews or other links that might damage your reputation, with positive ones which you can control;
- Increasing your online popularity by creating websites and offering SEO (Search Engine Optimization) services.

Find out more about how we can help by visiting our website at ...

Thank you for according us your time and understanding.

Hopefully you can already see all of the things that are wrong with this, but I wanted to talk about two in particular.

First, and foremost, don't do this. Ever. Not only is it just bad for business (you should have a system set up for asking for reviews from your clients that makes it easy for them to do so) but if you get caught you are going to face the wrath of a lot of your colleagues, and they will make sure anytime anyone looks for you they'll find out you've been using fake reviews (see the link above to see what I'm talking about).

It's not hard to build up a good reputation, on and off line, but it's really easy to destroy it. If it sounds easy and too good to be true, it probably is.

Second, and more importantly for me as a consumer, I wonder how much of this is going on. This can't be the only company offering these services. What good is a review if you can't be certain it came from a real person with a real experience? There are plenty of people out there who would love to review your services. All you have to do is ask.

Starting a law firm is hard. Marketing a law firm is harder. Make a plan, put it to work. Clients will come. Don't take shortcuts. They may help in the short term, but they could blow up your firm in the long term.

Starting a Law Firm | Plugging the Leaks

I read several blogs about business, law, criminal law, real estate, and some other stuff. One of them I read the other day was talking about productivity, which for me, lately, has been an area of focus. In the context I'm thinking, productivity simply means getting the most you can out of every day. By taking a couple of minutes it's pretty easy to think of some ways to increase productivity - outsourcing work you don't need to to, creating standard operating procedures to systematize what can be systematized, and on and on. But there's another way to increase productivity, and it's something I refer to as plugging the leaks.

Oh, and before I get too far, I didn't come up with the term "plugging the leaks." I read it on a blog somewhere (can't remember where) and that's what they called it. I think it describes perfectly what goes on, so I adopted it too.

The idea behind this concept is that we all have leaks, those things that hold us back from being as productive as we can. For some it's facebook, for others it's the latest edition of Us Weekly, for others it's politics. Whatever it is, we all have these things that hold us back from doing the things that we should be doing. Most leaks are self-created, meaning we simply choose to allow the leak, rather than it choosing us.

After reading this blog post I identified precisely with what the guy was talking about. I've got several leaks, some related to starting a law firm, some not. As with any problem, I think the first step is identifying those leaks and coming up with ways to plug the leaks, to prevent them from affecting you.

Anyone that knows me could probably list off most of my personal leaks - television, reading, golf, sports. These things get in the way of accomplishing what I need to do on a daily basis. For example, I often mean to work from home, but with the television on, I just get sucked in, even if the show is terrible. So I need to come up with some ways to get away from the television. And for me, out of sighhttp://www.blogger.com/img/blank.gift out of mind works pretty well, so it may be as simple as taking myself somewhere that the TV isn't.

But I know you all don't care about my personal leaks. You want to know about my professional leaks. The things that keep me from having the best law firm I can have. Well, here are just a couple.

First, I tend to over think things a bit, particularly when it comes to the design of my law office, law firm marketing, and things of that nature. I talk about doing things and write them down on my to-do list and then I read a lot about what I should be doing, think a lot about what I should be doing, instead of just doing it. For example, I've been thinking about what rug to get for my law office entry for three days now. I know at the end of the day it really doesn't matter that much, but I want everything to fit so perfectly that it slows me down.

Second, I let myself get easily distracted. I always mean to turn off my email and work on something continuously for a bit. But it's really tough for me to do. And, by the way, notice I said "let" myself get distracted. It's completely my decision.

So, moving forward, the plan is to start plugging the leaks. I know it's going to take a lot of willpower, and it's likely going to be a long process. But I'm going to get there. And it's going to start today. I'm pulling the trigger on the rug.

What are your leaks and what are you doing to plug them?

P.S. - we have a new law firm mascot - meet Piper!