As I understand from your screenshot, these are the relationships that you have:
Referrer-----Referral Office-----Referral Office Contact Data
Refferer::RefOfficeIDLink = Refferal Office::RefOfficeID
RefferralOffice::ContactIDLink = Referral Office Contact Data::ContactID
And all of these are one to one relationships.
I would guess that your layout is based on Referrer.
Selecting a company name in the company drop down "tries to create a new record" in what table?
When you check the drop down while in layout mode, is this a field from referrer or one of the other table occurrences?
Since these are one to one relationships, I see no compelling reason for separate Referrer and Referall Office tables. Merging them into a single table might simplify the issues that you are having here.
Referral Office to Referrer is a one to many relationship. The Contacts can be referrers and/or clients and or vendors, etc so they have seperate occurances of the Contacts Table but I wanted to have basic information in the Contacts Table and then specific information for Clients or Referrers or Vendors in their respective tables
A new record is created in the Contacts table (Referral Office Contact Data) when we choose a name out of the drop down. The trouble seems to be that a Referral Office is not selected when I choose the Company Name from referral Office Contact Data. Ti seems to bypass associating the records in the Child relationship.
Yep, I see the one to many now. Must have missed that the first time around., but you can establish a link between Referral office and contacts without using an additional Referrer table in between and you can still limit relationships to match only to the desired sub set of contacts.
What you describe in terms of that drop down suggests that the drop down field is based on a field from contacts (Referral Office Contact Data) instead of referrer--probably with "allow creation..." enabled in the relationship. Correctly getting a linking record in referrer between Contacts and referral office is an issue, but it's not what is creating the new record in contacts unless you have a script trigger performed script.
Go to the layout shown in your screen shot. Enter layout mode. Click on the drop down to select it. What do you see named to the left of the :: in the display data from box on the Inspector's data tab? I suspect you will see "referral office contact data" and this will be the wrong field for this.