Referral fees in the spot light again

Not a week goes by when referral fees are not in the spot light. Jack Straw continues to bang his drum about the same and demands fixed fees be reduced in light of the savings law firms will make when they no longer have to pay for them. Yet he should be looking closer to home: It has emerged that the Labour Party are reliant on referral fees also. See

What no one acknowledges is the fact that a certain amount of work/fees have to be incurred and attributed to each case/client in order to get the client. Whilst the savvy high street practice may be able to keep this low, and be self sufficient from local trade, large business park firms with a large number of litigation executives need to be fed a large number of cases to remain profitable and hence need a large market spend. This may be by way of buying work in, or advertising. Either way, it has to be done.

Likewise, what will be the cost of patrolling and enforcing the referral fee ban? The solution is allow moderate/capped referral fees, as opposed to the £1000 some people have quoted my firm.