Back when I was practicing law, ignoring my health, and always exhausted, there were oh so many things to think about. One of them was referral fees.
Of course the Law Society has rules about referral fees, as they should. (There are a whole bunch of other things that they have rules about which they should not be involved in, but I will save my rant about that for another day.)
In our firm, we kept our rules about referral fees a whole lot simpler than the Law Society rules. We did not pay referral fees and we did not accept referral fees.
Our thinking in not accepting referral fees was as follows: Since we lived by the prime directive of always putting the interests of our clients before our own, if we had to refer a client to another professional, we would recommend the best person that we could for the job. Receiving a referral fee would cloud our judgment, and make our client question our commitment to them.
Our reasons for not paying referral fees were even simpler: we did not like dealing with the type of people who wanted referral fees, and we were cheap.
A fellow named Ivan Misner said the following wise words, “Referrals are very powerful. When I refer you, I give a little bit of my reputation away. If you do a good job, my friend that hired you is pleased. But if you do a bad job, that reflects badly on me. People forget that.”
These words support my view that lawyers should not have money on their mind when they make a referral, which is kind of ironic since Ivan Misner is the founder of an international business networking organization. I am no fan of these large networking organizations because I think that they create an environment where the members of a networking group are (pick your own verb: encouraged or pressured) to make or (pick another verb: cajoled or shamed) into making referrals to other members of their marketing group, which may or may not include the best person for the job.
Alas, nothing in law or life is quite that simple, and I will admit that I preferred making referrals to professionals who referred work to me, which is, I suppose, a form of ‘payment.’ But, hey, I am a lawyer, so I can rationalize anything.
But even if I preferred referring work to people who would refer work back to me, I did have my principles. When someone referred work to me and I did not have confidence that they would do a good job for my client, I did not refer anything back to them, even though I knew that referrals from them might eventually dry up because of my failure to reciprocate. (That being said, sometimes they did keep referring clients to me anyway, presumably because I did a good job, added value to their clients, and made them look good.)
Sometimes things are actually easier than they look. It is easy to navigate the particular minefield if you simply remember to put the client first.
This article (under a different title) was originally published by Law360 Canada, part of LexisNexis Canada Inc.