5 Ways To Avoid Referral Mishaps

When lawyers are conflicted from working on a case, having a good referral system in place not only helps clients connect with attorneys who have the specific expertise they want, it can boost lawyers’ ability to generate more business for their firm in return.

However, referring legal work involves much more than looking up an attorney in the phone book, and if it’s not done right, lawyers who thought they were doing someone a favor could find themselves tied up in a malpractice case, according to an article in Law360.

Have a Referral Plan of Attack

A client who needs a referral can come up out of the blue, but that doesn’t mean the lawyer can’t be ready ahead of time,

“Referrals can be a random event, and what I recommend is that lawyers make it planned. Have lawyers lined up in advance, so you have had a chance to screen them, meet with them and establish a relationship. If they get work that you do, they are going to refer work back.

Do Your Homework

What you need to know is that if you send over a client, the attorney is going to treat that client as well as you would. The danger is an attorney takes the referral and it goes to the bottom of the to-do list.

Disclose Why You’re Making the Referral

Referral fees are commonly paid in litigation and are usually one-third of the amount recovered, but they can also be charged in transactional cases and tend to be one-third of the fee earned. While some states prohibit referral fees, most states permit them as long as they are disclosed to the client and the client signs a written confirmation.

Clients don’t usually care, but all they want is to know. A lawyer should pay attention to how referrals are communicated to clients so they understand they are not being shuffled off, but being specifically transferred to someone who is a specialist.

Consider Your Options

If lawyers don’t have a particular expert in mind, they can always have individuals contact the local bar association or public service referral program, according to Jane Nosbisch, staff counsel for ABA’s standing committees on lawyers’ professional liability.

“By sending an individual to a public referral program, there is no disengagement letter required, and because the lawyers have no economic interest in the program, nothing needs to be disclosed,” she said.

Courts look more favorably on referrals made to a public service network than those made to individual attorneys when examining the issue of negligent referral liability, she said.

“When a lawyer makes a referral to another attorney, the courts are more concerned over what the pecuniary interests are in making that referral,” she said. “They are concerned about the ability of the client to trust that referral.”

Keep Tabs on the Referred Case 

Lawyers who forward a case on to another attorney need to stay in touch to see how the case is proceeding.

By sending a letter to the attorney receiving the work, lawyers can make it clear that they have a right to know what is going on in the matter and can insist on getting copies of all correspondence and pleadings that are issued in the case.

It’s the ultimate insurance. You’re making a lot of work for yourself, but that’s the best way to get the job done right.


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