The idea is that the participants will pass referrals to each other. In some groups, the number of individuals by profession are limited. In other groups, multiple or unlimited members of the same profession can join.
At the end of the day, passing referrals to others who refer back to you is a positive thing. However, joining a referral group with a fee for attending or and an attendance policy, often leads to a lot of wasted time, money, and effort.
Many in these referral groups will pass cold leads. In other words, the lead is lukewarm on hiring an attorney in the first place. Often, the leads are real but are not going to generate a lot of money.
In other words, is attending a referral group for months or years, and spending significant money, worth obtaining a few traffic tickets or simple wills? Is it worth attending a referral group only to get a personal injury case that isn’t very good in the first place? Maybe you don’t even practice in these areas? So, don’t referral groups almost encourage you to become a general practitioner if you want to make a buck?
In some circumstances, maybe a rare attorney here or there gets that home run lead from a referral group. Most of the time that just isn’t the case. Most of the time, the time, energy, and money spent would be put to better use through other avenues.
If you talk to lots of attorneys who regularly attend a referral group, the reality is most are struggling. That’s why they joined a referral group from the start. Most of the attorneys who are drowning in money and business, on the other hand, are so busy working up their cases that they don’t have time to regularly attend a referral group.
Versus spending the time and money in a referral group, it might be better to develop a coherent marketing strategy that regularly brings in the type of business you want. And instead of attending a referral group, a circle of attorneys and other professionals who do not practice in the same area might be useful as well.
But instead of showing up every Wednesday at 7 am, or noon, to meet other struggling business owners, it’s probably better to skip the meeting and spend that valuable time and money elsewhere.
While getting out and meeting people at social networking events, or informal lunch meetings, is often a good way to spend your time, structured referral groups are not.
If you have any thoughts, feel free to leave them below.