Sunday, May 12, 2013

Legal Urban Legend Myth Buster #3



There was a comment also made recently about how there are all these great referral cases or overflow work from experienced or established attorneys to young attorneys available just for the asking. Older, experienced attorneys with established specialty practices will typically take files on referral and may pay out a referral fee. You may also have friends in the profession that refer conflict cases or try to reciprocate referrals.

However, the "dirty little secret" of referrals to young, inexperienced attorneys is that many times the files are worthless. Chances are, if an attorney is trying to refer a case to a newly-minted attorney it's because he or she can't make money on it. An attorney once told me that the only way to make a living practicing law is to have someone you can refer your freebies and non-money makers to so you can work on files that do pay. He referred to these files as "barnacles" because they would accumulate on your practice and gunk everything up so that you couldn't move quickly to turn your files over and make money. 

For example, a typical scenario is that you get a client with a good file which you may take on contingency. Now this person has you as an Official Attorney. They try to put every other little problem in their life on your desk to solve. For example, if you are helping them get a share of an estate, then you are also probably going to get asked to sort out their back child support case, and help with the neighbor who plays loud music, and get their stuff back from their girlfriend who moved out over the weekend, and help get their child back in school who just got suspended "for no reason." 

None of those things pay but you either end up taking a bunch of calls discussing them or you need to find someone to refer them to so you can get back to work on the case the does pay. That's where knowing a young attorney willing to accept referrals in Family Law, Real Estate, Tort, and Education Law sure comes in handy.

The myth that "there are lots of great referral and overflow cases for young attorneys from established senior attorneys" is BUSTED.


  1. This is dead-on; no attorney refers a paying client to another attorney. Period. And if it's a contingency case that looks to be worth a few bucks-forget it, it won't get referred out. The market is too tight, and paying clients-and good cases-are too rare. The only matters that get referred out are the cases that just don't pay.

  2. When I first became a lawyer in 1991, I recall meeting one attorney who was wealthy but he never practiced law. He made his money by referring personal injury cases. Back in those days (pre-tort reform), a whiplash would settle for an easy $20K with the referring attorney getting a third of a third or $2,222.00. Not a bad gig to get a couple thousand just to refer a case. Then came the verbal threshold limitations on personal injury cases. That derailed the gravy train.

    In 1997, my state supreme court came out with a decision that also stopped liberal referral arrangements. The case basically held a referring attorney jointly liable for malpractice committed by the attorney who did the work. After that case came out, my malpractice insurance carrier made me sign a rider stating that I do not refer cases out. If I didn't sign the rider, my premium would be higher. So there is another reason why referrals are not practical, at least in my jurisdiction.

    The only place that refers cases is the local bar association or legal services and as was previously mentioned, those clients are like a casino slot machine, they don't pay out.

    There is some guy who posts here who says he has no problem letting a young lawyer use his office as he expects some business to come out of it. A few years ago, I knew a lawyer who was named as a defendant in a malpractice case. He didn't even know the client but apparently he let the attorney who handled the case use his office. Naturally, when the attorney screwed the case, the client went back to the office and listed every lawyer in the office directory. It was a pain in the ass to have the suit dismissed, which is why I will never let another attorney use my office. If you want to play cop without a badge and a gun, be my guest but I am lending you my shield and sidearm.

  3. There is some overflow WORK every now and then, especially from older attorneys either soloing or in two-man or three-man shops, and even then it's only when they have a rush of deadlines. That exists. Bigger firms than that, and you will never see spill-over work, because spill-over work only happens when no one that they work with in their office can cover it, and the odds of four or more attorneys not being able to make a court hearing or draft a brief in time are extremely low. The small firm will also give you the stuff they least want to do and that requires the least experience or expertise, and you will probably be paid accordingly.

    Such work can supplement a solos income, but it sure as hell isn't going to keep the lights on.

    CASES that pay do not happen except for once in a blue moon when someone calls a firm that doesn't do an area of law at all. The cases that actually pay either come from the rich or long-term corporate clients such as banks or insurers, which will never get farmed out for fear of alienating the paying client, or from consumers with really juicy cases like high-end personal injury, easy-win employment litigation, or anything else that can be done on contingency with a high rate of success. The plaintiffs in these suits know they have issue X and they'll almost always call the right place first, which will usually be a well-advertised PI mill or civil litigation specialist who will suck it in and not let go. Same with any mill-based practices like SSID, workman's comp, bankruptcy, estates, divorce law, etc.

    The woods are full of starving animals. Do you really think if go out and sit on a tree stump and chat up the animals around you, some ragged-looking raccoons are going to deliver you grilled chicken and roast beef feasts? No, dumb bunny, you're going to be starving, too.

  4. Solo lawyer making little money cannot afford to share clients.

  5. There actually is some referral work. Big law firms have conflicts. They must refer out the work if they cannot get a conflicts waiver or a matter simply requires independent legal counsel. Usually that work goes to friends in other big firms. Sometimes it goes to former associates who are now in small firms. The referral work would generally not go to a starting lawyer or someone whose work the big law firm is not familiar with. For the really small things sometimes e-mails come around with "Do you know a ___ lawyer in ___?" A number of responses may come to the person asking. It does pay to know people.

  6. I have had t refer work out to someone because of conflicts. I refer work out to someone who will hopefully return the favor one day. never will that work get referred out to a new attorney who wont have work to refer to me.