Global Lawyer to Lawyer Referral Market 29 June 2010
Oct 20, 2014
Global Lawyer to Lawyer Referral Market
29 June 2010
Our panel
Michael Molitoris, Partner Noerr LLP (Lex Mundi member firm for Germany)
Janet Looi, PartnerSkrine (Lex Mundi member firm for Malaysia)
Daniel Del Río, Partner Basham, Ringe y Correa, S.C. (Lex Mundi member firm for Mexico)
Our moderator
Derek Benton, Operations DirectorMartindale-Hubbell International
Today’s agenda
Inbound and outbound referrals, tracking and the importance of existing relationships
Increasing referrals in the future
Q&A
Key highlights
26% of respondents believe they derive 20% of their annual revenue from referrals. Yet, many firms, (especially in the U.S.), don’t track referrals.
Receiving referral work holds greater importance outside of the U.S. in terms of volume of work and contribution to revenue.
For the majority of U.S. firms the survey highlighted that their referral work emanates from other U.S. based firms
Key highlights
Most important factors when selecting a referral partner; Likelihood of receiving something in return and strength of existing relationships.
Principal types of work being referred: Mergers & Acquisitions, General Corporate and Litigation. NB: Employment work featured more highly for U.S. respondents.
Key highlights
Majority expect to increase their marketing spend over the next financial year and are protecting or increasing referral work received by:
• Improving service capability• Developing or improving the firm’s web site• Listing the firm in International directories• At least half expect to use social media, some significantly
Research overviewIndependent researcher
Email survey, Feb / Mar 2010
61 countries
650 Law firms, (non US = mostly independent)
NB: ‘Mid-law’ = 21 to 50 fee earners, Large = 50+
18% = Managing Partners
52% = Partners
25% = Lawyers or Associates
2% = Marketing or Business Development
3% = “Other” roles
Total = 734 respondents
Asia
14%
East.
Europe
15%
Latam
19%West.
Europe
15%
U.S. Mid
Law
16%
U.S.
Large
Law
21%
Managing
Partner
18%
Partner
52%
Lawyer /
Associate
25%
Other
3%
Mktg / Bus
Dev
2%
Referral tracking & the importance of existing relationships
Inbound Referrals: Where do they come from and how are they managed and tracked?
Outbound Referrals: Who are they sent to and how are they managed and tracked?
What importance do existing mutual or exclusiverelationships play in your firm’s referral process?
Where do they receive work from?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Asia E. Europe W. Europe Latam U.S.
Asia E. Europe W. Europe Latam Middle East United States Other
94% of U.S. respondents* indicated that their referral work comes from other U.S.-based law firms. For Europe-based firms, Western Europe is the most important source of referrals, whereas Asia and Latam rely heavily on the U.S.
* Removed ‘Don’t Know’ responses
Do you refer or receive business referrals?
0%10%20%30%40%50%60%70%80%90%
100%
Equally
recipient
and
referrer
Primarily a
recipient
Primarily a
referrer
Non-US US
• Majority of firms claim that they equally receive and refer legal business from / to other law firms
• However, in the U.S. 95% of respondents claim that they equally receive and refer business vs. 58% respondents outside of the U.S.
• 38% of non-U.S. firms claimed they are primarily a recipient of referrals
What type of work do you refer?Consistency in terms of the type of work that is referred across Western and Eastern Europe, Asia and Latin America. For each jurisdiction the top 3 work types are:
• Mergers & Acquisitions• General Corporate • Litigation
Typically, followed by Intellectual property, Banking and Finance and Employment.
Likelihood of receiving something in returnWestern Europe places more importance on receiving something in return for a referral (top 2 box 36%) than any other region when selecting a referral partner. However, in the qualitative research, when asked about reciprocation we received mixed messages. On the whole, the importance of the existence of reciprocal relationships was played down.
0%
20%
40%
60%
80%
100%
Asia E. Europe Latam W. Europe U.S. Mid U.S. Large
1 - Not at all important 2 3 4 5 - Very Important
Tracking referral businessFrom the one-on-one interviews (not U.S.), the feedback on tracking was:
• The majority of firms have a fairly unsophisticated approach to the tracking of referral work. The vast majority of participants do not appear to track either the volume or value of the work referred
• Any tracking of performance is invariably undertaken via informal channels / non structured post matter discussions / anecdotal evidence
• The larger organisations (primarily Western European) have expressed a desire to become more sophisticated in this area. Examples discussed include:
• leveraging CRM systems, i.e. InterAction
• capturing of referrals through the use of mandatory fields in matter opening procedures,
• allocating individual partners to assume responsibility for specific jurisdictions / areas
Existence of mutual or exclusive relationships
0%
20%
40%
60%
80%
100%
Asia E. Europe Latam W. Europe U.S. Mid U.S. Large
1 - Not at all important 2 3 4 5 - Very Important
When selecting a referral partner, U.S. firms place the least importance on existing mutual or exclusive relationships than the other global regions whereas Eastern Europe puts more importance on them.
Increasing referrals in the future
The effect of membership in legal associations on a firm’s referral strategy
Increasing marketing spend, including international directories and social media
Considering joining an International referral network?
• 37% of total expect to take ‘some’ action
• 30% of total expect to take ‘significant action’
0 10 20 30 40 50 60
No action
Some action
Significant action
No. of responses
W.Europe
Latam
E.Europe
Asia
Increasing marketing spend
0 100 200 300 400
No Action
Some
Action
Significant
Action
Number of responses
• 20% expect to take significant action
• 56% expect to take some action to increase their marketing spend
• 24% of firms do not plan to increase their marketing spend to either protect or increase the volume of referral work received
• 47% of firms are taking significant action in developing or improving their firm’s web site
20%
24%
56%
Listing the firm in international directories
12%
49%
39%
71%
24%
5%
41%
41%
17%
0% 20% 40% 60% 80%
No Action
Some
Action
Significant
Action
Responses
Non-U.S. U.S. Mid-Law U.S. LL
• Non-U.S. firms are taking the most action in listing in international directories with 39% of those respondents stating they are taking significant action and a further 49% taking some action.
• U.S. mid-law firms are taking the least action not surprisingly since 96% of respondents indicated that they mainly receive referrals from the U.S.
• U.S. LL firms show more interest in international directories since a larger portion of their referrals are international
Leveraging social media
40%
48%
12%
0% 20% 40% 60%
No Action
Some
Action
Significant
Action
Responses
• Twelve percent (12%) of overall respondents are taking significant action to leverage social media to protect / increase their referral revenue.
• Almost 50% of respondents are considering some action around social media.
• U.S results are slightly higher with 15% and 18% of Mid-law and Large Law respectively taking significant action and with both groups, 52% are taking some action.
Thanks for your time
To continue the discussion and access the full research report & webinar replay:
‘Lex Mundi Connected’ group in Martindale-Hubbell Connected
Any questions or queries:
Rory Webber, Marketing & Community Development Manager, ([email protected] / http://www.twitter.com/MrRx
Appendix
Survey Respondents
Asia
14%
East.
Europe
15%
Latam
19%West.
Europe
15%
U.S. Mid
Law
16%
U.S.
Large
Law
21%
• A total of 734 legal professionals responded to the survey
• Asia: 104
• Eastern Europe: 113
• Latam: 139
• Western Europe: 112
• U.S. Mid Law: 115
• U.S. Large Law: 150
• Mid-law is defined at 21 to 50 fee earners and Large is 50+
Survey Respondents• 18% of respondents were
Managing Partners (25% were MPs outside of U.S.)
• 52% were Partners
• 25% were Lawyers or Associates
• 2% in Marketing or Business Development roles
• 3% considered themselves in “Other” roles
Managing
Partner
18%
Partner
52%
Lawyer /
Associate
25%
Other
3%
Mktg / Bus
Dev
2%
Proportion of revenue from referrals
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Asia E. Europe W. Europe Latam U.S. Mid Law U.S. Large
Law
0 - 10% 11 - 20% 21 - 30% 31 - 40% 41 - 50% 50%+ Don't track
Latam and Western Europe derive the highest proportion of annual revenue from referrals. Interestingly, the U.S. has the highest proportion of not tracking referrals.
% o
f an
nu
al r
even
ue
fro
m r
efer
rals
Removed non-responders – about 10%
Is referral revenue expected to change?
Probably
increase
37%
Stay the
same
49%
Definite
increase
10%
Definite
decrease
0%
Probably
decrease
4%
• Most firms expect referral revenue to increase (47% top 2 box) or stay the same (49%)
• Fortunately, no firms expected a definite decrease in referrals
• Key reasons for expecting changes are related to expectations of the economy’s improvement, changes in the firm’s marketing efforts, personal efforts to build a referral network