Erik Mazzone over at Law Practice Matters has an excellent post on developing & quantifying a lawyer’s referral network needs.

The entire post is worth reading, but check out Erik’s rough methodology for calculating those needs:

Here’s the math for Hypothetical Larry the Lawyer:

1) Larry’s average case (divorce lawyer) is worth $5,000.

2) Larry’s best referral source refers 2 cases per year to Larry.

3) A good referral source for Larry is worth $10,000 (per year).

4) Larry’s annual revenue goal is $150,000. $150,000 revenues/$10,000 referral source = Larry needs 15 very good referral sources to a completely referral based practice.

Simple, but not by any means easy. If you don’t have enough data to complete the calculation, just start tracking it now.

Tracking, of course, is the basic foundation. Everything from the yellow page ads, to web marketing, to industry association memberships & speaking engagements should be evaluated. ROI isn’t the only part of the equation when it comes to evaluating marketing efforts, but it better be in there somewhere.

As I commented on Erik’s post, the preferred placement for this kind of tracking is within your accounting software. Even some rough standardized categories for referral sources, combined with the knowledge of client & matter billing history, can provide enormous value to tracking your marketing investments.

Either that, or you can consider Erik’s rationale for the answer being “10″. It’s pretty compelling… :)