Referral Networks

[Guest R. Daestrom]

Recently, I've been approached by several different referral/networking organizations comprised of other professionals outside of the employee benefits field. The idea seems to be that you get a group of 10-15 different professionals, say for example, an attorney, an accountant, realtor, financial agent, etc. and you all refer business to each other. There are some implied "quota's" to meet in regard to your referrals to other members of the group. There are fees involved, which have ranged for a couple hundred dollars/year to several thousand dollars/year. BNI is one of those I've talked to.

I'm curious as to if anyone else has been a part of these networks and what your experience has been. Has the new business come rolling in as a result, or is it something that sounds like a good idea on paper, but in practice there's little to be had. The skeptical side of me flashes red alert when I think about the "pay now - get tons of business later" promise that is involved.

Thanks for any comments.

[david rigby]

No such experience, but there is the school of thought that P.T. Barnum was wrong.

It's every 30 seconds.

[Theresa Lynn]

Seems like there would be inherent bar ethics problems with such a scenario, if it includes an attorney/lawyer. The referral networks and associations seem to be booming, however, for all other professions.

[Guest R. Daestrom]

I'm not sure I see where the ethics problems would come into play for an attorney (fyi, I'm not an attorney). No one is obligated to refer specific business to another organization, if they think it would be a bad fit. The idea is that in general, you would provide as many referrals as you can to the other members. There's no agreement that you would provide every referral you come across to that organization. If you aren't providing enough referrals, you (most likely) will be asked to leave.

One thing I've noticed is that the groups I've been approached by seem to involve more "individual-based" referrals, rather than "business-based" referrals, which are the type that I would be looking for.

[Guest TCW]

For attorneys, the issue is directly and indirectly compensating a non-attorney for delivering new clients, a potential "running" situation.

I participated in a local group some years back, not as a practicing attorney and not on a fee basis. The downside was most of the business referred was stuff I'd otherwise walk away from. The upside was developing a few new business advisor relationships that I've kept to this day.