Is Banning Referral Fees The Answer?

I have just returned from the Motor Accident Solicitors Society conference (MASS Training – providers of excellent Legal Training – are one of my clients). The society consists of personal injury solicitors, so obviously one of the constants at each year’s conference is the discussion about Referral Fees and whether they should be banned.

This always makes me scratch my head. Referral fees exist because solicitors are prepared to pay a referrer to supply them with a steady stream of new clients. When I say that the answer is not to ban referral fees but for the solicitors to market themselves more effectively, thereby removing the need for the claims companies at all, I am met with “Well that will cost us time and money and we cannot guarantee the exact number of new cases each month”.

No, of course you can never guarantee the exact results. What other business can do that? But most other types of business rely on generating their leads through their own marketing initiatives, from advertising to their websites, so why should it be different for solicitors?

In addition, if this is the view of many of the solicitors, and I believe it is, how is the banning of referral fees going to help, as suddenly the supply of leads will disappear?

The only way to create a legal practice that is built on solid foundations is to constantly try new marketing methods, keep the ones that work and ditch the others. If you have only one way of generating leads, add another, and then another. You cannot rely on one referrer for your business, and preferably you should rely on no referrers. Generating your own clients and your own leads is really the only way to sleep well at night.

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