If you have been practicing law for some time, perhaps you’ve dealt with “less than ideal” clients. These are clients who demand so much of your time and energy that you lose your enthusiasm for the current project. You may become resentful or angry that these clients don’t appear to value your services, which can lead to you questioning why you started your own practice in the first place.
Sometimes, you and your client just aren’t a good fit. It may not be easy to say “no” or fire your client, but it can be the best thing you do in terms of productivity, profitability and peace of mind. Life’s too short to work with difficult clients. Here are a few signs it’s time to fire your client.
- You dread contact – Whether it’s dodging their phone calls or delaying email, you find yourself trying to avoid any interaction. Maybe conversations escalate in anger. Maybe your client nitpicks, micromanages, or nickel-and-dimes you. Maybe you just don’t like them or believe in the work you are doing. Whatever your reason, consider ending the relationship for your own sanity.
- Nitpicking and micromanaging – Some clients question every line-item you bill, insist they know the legal process better than you do, or have unrealistic expectations of your time, fees, or outcome. Most of these concerns stem from your client’s fear and/or lack of trust rather than anything you may have done – and it may not be worth the effort to smooth over the relationship.
- Everything is an emergency – Maybe you know the type of client: everything should have been done last week, but they just got around to giving you the assignment today. Can you have it done tomorrow by noon? Just say no. Occasionally, it may really be an emergency, but more likely, they are testing you to see if you cave to their whims. Look for clients who can adequately plan and prepare their projects.
- No follow-through – You assign your client specific tasks, such as to fill out documents or bring in paperwork, but nothing seems to progress. Your client drags their feet – maybe with signing your retainer agreement or with the work required to file the lawsuit – until you wonder if this project will ever get off-the-ground.
- Money issues – Everyone wants the most bang-for-their-buck, but some clients can’t afford your fee. In an ideal world, everyone would pay on time, but as many small-business owners quickly realize – payments are late, excuses are made, the check is in the mail. If possible, get a portion of your fee upfront and schedule regular payment options so you can manage your cash flow.
- No loyalty – Your client has a string of lawyers they previously worked with, but none worked out long-term and their problem has never been solved. Take that as a red flag.
- No expertise – If your client needs legal services outside your normal practice areas, consider referring out the business rather than taking on case work you have little or no expertise in.
It may sound counter-intuitive or just a “pipe dream” but to grow your ideal practice, weed out the less-than-ideal clients and focus your time and attention on those who are a better fit.
Increase Your Firm’s Profitability By Firing Poor Clients
One way to evaluate your current client base is to assign letter grades (As, Bs, Cs and Ds). There is an element of subjectivity to grading clients, but you can also develop objective criteria. For instance:
- “A” Clients – These clients have reasonable expectations, value your services, follow-through on assignments, and treat you and your staff with professionalism. They understand your fees, pay their bills on time, and offer ongoing legal work you find interesting and/or meaningful.
- “B” Clients – These clients are average/ above average, but they don’t meet all the criteria for “A” clients.
- “C” Clients – These clients are average/ below average, but they aren’t absolutely terrible.
- “D” Clients – Your worst clients, they are the opposite of “A” clients in most ways.
Perhaps you’ve heard of the 80-20 rule? 80% of your time and efforts are spent on 20% of your client base (usually the least profitable and most difficult to work with, your “C” and “D” clients). On the other hand, 20% of your client base makes up 80% of your profits, meaning your “A” clients are usually the most profitable. These percentages are generalizations – sometimes it’s 90-10, other times 70-30 but the ratio is useful to demonstrate that if you fire your “D” clients, you will free up resources to focus on your better, more profitable clients. The more time you spend with “A” and “B” clients, the greater the likelihood they will be more satisfied with your services and refer business to you.
To successfully build a law practice of only “A” and “B” clients requires specializing for 1-2 niche practice areas (maybe one more if the firm has several partners) that are, ideally, related so you can cross-sell services. Start with your most lucrative practice area, build that up, then add others as you grow.