Stop Costly Clients at the Door

12/1/2016 - By Zachary Farrington

For most attorneys, turning away business is a hard call to make. But the truth is that not all clients are worth having. Unreasonable and over-demanding clients can be costly — they detract from your profitability, productivity and peace of mind.

With a well-thought-out intake procedure, you can possibly avoid the stress of a difficult client while also minimizing problems with fee collections or write-offs. Make sure your client intake process covers these essential areas:

Expectations — Avoid clients with unrealistic expectations or demands — especially those who come to you in a crisis mode days before action must be taken. Ditto for clients who cannot clearly articulate what they want to achieve.

Credit — You’ll want to see some evidence that a prospective client can pay, so start by seeing what Dun & Bradstreet and Moody’s have to say. Other online sources of credit information include CRIBIS, Experian and Equifax.

Previous firms — Beware of a client who has burned through a number of law firms.
A major red flag should go up if prospective clients refuse to name the firms they have worked with.

Prospective relationship — Will you be able to develop a rewarding lawyer-client relationship? Or is this someone who thinks they know the law themselves and just wants the attorney to do the front-end legwork work for them?

Fees — Be leery of clients who will not sign a fee agreement or balk at paying a retainer. They may be subtly broadcasting their intent to dispute your fees. Equally troubling are those who ask for a special reduced rate or payment terms up front.

Also pay attention to your gut feelings. Learn to say “no” to prospects whom your gut tells you could be trouble.

Qualify Your Prospects

It pays to invest the time and money to train staff and establish protocols to properly qualify prospects. Develop an intake checklist for the attorney, secretary or paralegal to use when doing telephone screening. The checklist should prompt you to collect all the essential information to determine whether a legal matter is of the type you handle, as well as conduct a preliminary check for any potential conflicts.

By the way, personally answering unscheduled phone calls from prospects is generally not an efficient use of an attorney’s time. Instead, consider training another employee to qualify callers and then schedule appointments for qualified prospects with an attorney. An added benefit is that this helps establish the value of your time and counsel in the eyes of prospective clients.

Say “No” the Right Way
Ultimately, your time is too valuable to spend working with costly clients. You’ll be happier and more profitable focusing on clients you enjoy working with and doing the type of work you want to do.

At the same time, you should exercise prudence when turning down a client or matter. Handle the matter professionally and in a respectful and tactful manner to avoid tarnishing your reputation in the eyes of prospective clients.

SIDEBAR:

Problem Client Profiles

Problem clients come in all shapes and sizes. Here are just a few problem client personas that may darken your door:

The Delayer—There are some clients who just can’t seem to get the engagement letter signed or the retainer check in the mail.

The Nonpayer— When a client needs your legal services to keep out of harm’s way, you hold the power in the billing relationship. If you continue to do work without payment, though, the power transfers to the client.

The Crank — These are the clients who just don’t appreciate what you do for them. They exact a mental and emotional toll by constantly challenging your advice or telling you how to practice law. They may be rude to your associates and support staff and they frequently complain about price or demand discounts.

The Dishonest Client — This is the client who misrepresents facts or even lies to you.

The Bad Match — This client just doesn’t fit into your core business or targeted legal service sectors.

The Time-waster — This type of client doesn’t listen to your advice and/or takes up too much of your time unjustifiably.