ARE YOU PASSING UP
THE SILVER IN YOUR MINE?

ARE YOU SQUANDERING VALUABLE ASSETS?

BUILD A REFERRAL TRACKING SYSTEM

If you were working a gold mine and came across a vein of silver, would you ignore the silver? No, you would find a way to benefit from your find. You would not allow a valuable commodity to be squandered.

If you do not have a system to refer out and track potential clients who are not the "gold" clients you seek, you are squandering your valuable assets. You are passing up an opportunity to help someone who has come to you for assistance. You are passing up an opportunity to promote one of your professional colleagues. You are passing up relatively easy income.

When one of your clients has a legal matter outside of your area of expertise, do you ignore their need and let them find assistance on their own? Does such a disregard to your clients needs expose you to losing the client to an aggressive law firm uninterested in maintaining your relationship with your client. By assisting and directing your client's search for additional expertise, are you not further assisting your client while looking out for your own interests.

Not so long ago an attorney friend of ours called me to inquire about a client he referred to us. It had been some time since the referral and he wanted to know the status of the case. In a rather self assured manner I told him, the case was still pending, otherwise I would have sent a referral fee. He told me the client's name and I immediately felt my stomach knot and my face flush with embarrassment.

The case was a high speed single vehicle roll-over accident severely injuring a passenger. The referring attorney had settled the client's claim against the driver and referred us the auto products liability portion of the case. We had settled the case against the vehicle maker months before the call. I stammered out the status of the case, apologized profusely and immediately FedExed a check to a man I hoped was still a friend and a referral source.

Vowing to never be so embarrassed again, our staff and I reviewed our procedures for the identification of referred cases, identification of the referring attorney, memorializing the promised referral fee and our procedure for paying the fee. We found holes in our system. We modified our protocols and applied the new procedures to all pending cases and cases resolved within the last year. There were some cases that were not properly identified. Luckily, there were no other unpaid referral fees. I felt relieved.

Then I began to wonder, "Are we due any referral fees? Has anyone missed paying us?" We immediately performed an audit of referral fees received within the last year. I reported the results of our audit to my partner: "The good news is, we received eight referral fee checks in the last year totaling nearly $50,000. The bad news is, we paid a referral fee to your buddy three months late and only after he brought it to my attention. Just as disturbing, we refer out nearly two cases a week and we cannot account for who the potential clients are or to whom we referred them."

Where were the other 90 referral fee checks? If the average referral was the same as the eight we received, there were a half million dollars of silver unaccounted for. I had squandered valuable assets. Our silver was being flushed out with the tailings.

Who were those clients? Where were the cases? Who is holding our $500,000 in referral fees? No one knew. We had no tracking system.

In building our system, we realized that it needed to be efficient and effective for our purposes, easy for the referred attorneys to use and limited our exposure to liability. A cumbersome system would not generate compliance from our referred attorneys. Due diligence is necessary to limit our exposure. We decided that systematic follow up would promote effectiveness.

ONE MAN'S SILVER IS ANOTHER MAN'S GOLD.

The following are the procedures I suggest that you use to build your referral tracking system, shared with you from hindsight. We were not as efficient when we initially built our system as we would have been had we followed these suggestions. It is my hope that by sharing our system with you, you will never miss a fee you are due and I'll never miss paying you one in a timely manner.

BUILDING YOUR REFERRAL LIST

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The most time consuming component of building a referral tracking system is the initial creation of your list of attorneys. You need to determine which attorneys are going to serve your needs and the potential clients' needs, the best. Your list will evolve. Building your list can be done over time as the need arises. Consider using an intern or a law clerk to initially build your list as a special project.

QUALIFYING ATTORNEYS

DEVELOP AN INTERNAL TRACKING SYSTEM

1. First Follow Up Letter:
Did the referred attorney follow up with the potential client? Was the attorney retained?

Send a letter to follow up on the status of a matter that was referred. We send the letter to all attorneys whom we have referred a client to in the previous month. They need to have time to have interacted with the client. We may have referred more than one client to the attorney during the course of a month. This letter also reminds the attorney that a particular client was referred by us.

This is the start of your tracking system. Make it easy on the referred attorney to respond in order to gain compliance. See our "Potential Client Referral Letter" and our "Outcome" form.

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2. Quarterly Follow Up Letter:
What is the status of the referred case? Has it settled? Was a referral fee paid?

Send a letter following up on all cases referred to an attorney in order to check on status. Make it easy on the referred attorney. It reminds the attorney that the client was referred by you. It also will provide you some idea of when you might be receiving your referral fee. See our "Quarterly Letter" and "Status of Referrals Sheet" below for an example.

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3. Referral Tracking List:
Who are your referred potential clients? Where did you refer them? Did they retain the referred attorney? What is the status? Have you received your referral fee?

This is your most important list. Develop and maintain this list in a three ring binder and in electronic form. Although this is your list of silver, it is worth its weight in gold, many times over.

Include:

• • Potential client's name
• • Who case was referred to
• • Case Type
• • Was the referred attorney retained?
• • Were you paid your referral fee?

In our system, in order to build compliance and efficiency, we incentivise our staff by providing them a personal investment in the success of a referral. The incentive system helps ensure that potential clients find a home, that we receive confirmation of them retaining the referred attorney and that we receive our referral fee. By rewarding our intake personnel for placing a potential client with a referred attorney we have seen a dramatic rise in the number of potential clients who have become clients of referred attorneys.

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Here is how it works. The staff maintains the Referral List. When we receive written confirmation that an attorney has been retained by our referred potential client, the staff member who initiated that referral receives a bonus. When we actually receive a referral fee both the intake person that initially referred the case out and the person from our accounting department that tracks receipt of referral fees each receive a bonus.

Now my intake personnel are very particular about whom they refer potential clients to. They are much better at matching potential clients to referred attorneys. They do not have to be reminded to follow up with the potential clients or the referred attorney. Attorneys who do not comply with our system are replaced on the Referral List. There are no lapses in the follow ups in our system. Our accounting people have no lapses in the collection of referral fees that we are due.

This entire system was developed and implemented by our staff. Once we introduced the bonus system, they developed the list of attorneys and the tracking system. We now know where those potential clients were sent, which have retained referred attorneys, the basic status of their cases and for what cases we are due a percentage of the silver we may have otherwise passed up.

We have assisted more callers than ever. A number of our colleagues have experienced an increase their case loads. Our intake and accounting personnel are making more money. I do not know if their spouses are aware of their separate bonus checks. Referral fees received are up multiple times.

I would greatly appreciate your suggestions and comments, as our systems are always a work in progress. Email address: jbisnar@bisnarchase.com

HOLDING WRONGDOERS ACCOUNTABLE FOR THE DAMAGES THEY CAUSE SINCE 1978

Bisnar | Chase 2006-2008 - Super Lawyers is a listing of outstanding lawyers from more than 60 practice areas who have attained a high degree of peer recognition and professional achievement. Bisnar | Chase has received this award for three consecutive years.