Recently, I was a guest on a radio program for entrepreneurs in a segment on how to spot and fire “bad” clients. This is a favorite subject, probably because it took 5 years for me to fully appreciate what bad clients were doing to my new firm. Rob Millard, Nathan Burke, and “WAC?” have written about bad clients: how to spot them, what they cost you and what to do about them. In this blog’s “12 rules” for better client service, bad clients fall under Rule 1: Represent Only Clients You Like and an earlier related post. Generally, you are at your best when you represent clients who share your firm’s values.
A “bad” client is not bad because it is small and/or unprofitable, questions bills, pays late or stiffs you. A bad client is one that (1) is not and probably will never be a “sophisticated user of legal services”, (2) has a dysfunctional culture and/or (3) dampens the morale of your hard-working staff. Still, bad ex-clients at our shop have typically been small, and often not sophisticated. Ideally, a desirable client at my firm is relatively large, and comes equipped with a savvy and experienced GC. However, a recent post by Tom Collins at More Partner Income, one of the best blogs out there on enlightened management of any firm, added a lot to my thinking on firing smaller and/or less profitable clients. Tom, commenting on other good recent pieces by Ed Poll and Ed Wesemann, writes that “Law Firms Should Not Fire Those Clients, Yet“. Do read Tom’s post.