How To Fire Clients
Something that does not happen enough in most practices, including mine, is saying good bye to clients. Actually taking affirmative steps to terminate the contractual relationship. It is difficult for many reasons, chief among them is money. Clients generate our receivables, fees and settlements. We are always seeking clients, desperately trying to lure them, paying thousands in marketing, advertising or PPC. So why would we ever want to fire them? Because sometimes the best case is the one you don’t take.
- The Fear of Losing Money
This fear, the fear of losing money or not making enough, is not unique to the practice of law. It permeates every single business, from the lemonade stand to Wal-Mart. We all have it. And we must all face it. Seriously, is there a businessman or woman anywhere that doesn’t have this fear? It is one the fears that you must get comfortable with because it will never leave you. Lawyers are constantly saying “the law business is unique” or “yeah but you don’t understand our business.” All that is complete hogwash. If you believe it, go ahead, but it will only get you to where you are already standing. Embrace the fear, do something about it and get on with it.
- Realizing it is Quality over Quantity
One of the fundamentals to saying good bye to a client is assessing the quality of that client’s case or business. It really boils down to this: Would you rather have 5 great clients who always pay their bill or 100 who you spend 30 hours a month on tracking down their accounts receivable? Would you rather have 5 serious injury cases with huge policy limits and honest clients or 100 fender benders with non-compliant clients and questionable injuries? Can you increase the recovery by $5,000 to $10,000 by doing some more discovery? Or pushing some more issues? Time you spend on the fender benders will very well be better spent on the big ones.
Quality should always rule the day. But here is the rub—everyone will say “those 100 fender benders provide cash flow to the office. I need them.” Well, stay on the hamster wheel then. Or make some tough decisions (and I mean tough), cut back, lay people off and get your practice in order. That second golfing trip in a month? Maybe you should skip it. That new lease on 2016 Audi A8? A used Cadillac is quite the deal these days—oh, and it’s still a CADILLAC. On that same point—when is the last time a client even saw your car AND based their retainment decision on it? That’s what I thought.
- Action vs. Talk
Ok, if you’ve continued to read, you’ve been mildly convinced you need to make some changes and maybe fire some clients. Thought that was the hard part, right? Nope. The hardest part for anyone in any business is actually doing. That means implementing the plans you have committed to and taking action steps to fire these clients. I have found that the best way for me to do this is use my whiteboard (and write blogs like this). I have a huge one here in the office (cost $100 at Office Depot and free delivery) and it is something I see every day. When I write something on it, I cannot miss it. So, I have started to write the drop-dead dates for clients I need to say goodbye to. It forces me to get it done. It stares me in the face every day until I do it. And it works for me because it causes me to ACT. Find something that works for you and DO IT. 
- Making the Call (and following up with a letter)
We have to implement that action step, remember. So how exactly do you fire a client? What do you say and how do you say it? Here is what I have found is the best strategy for releasing a client:
- A phone or in person meeting. When a client retains you, it is a personal choice for them. Some of these clients are truly nice people who needed help or didn’t know if they could be helped. They put their trust in you to tell them how it is and put their best interests ahead of yours. So be a professional, call them and try to arrange an in-person meeting. If that doesn’t work, schedule a call. If that doesn’t work, you should not have any doubts about getting rid of this client. AND ALWAYS FOLLOW UP WITH A CERTIFIED LETTER!!!!
- Honesty really is the best policy. At the meeting with the client, be straight with them. Tell them the truth. And the truth is almost always usually one of these—
“I cannot afford to keep you as a client. The needs for your file or case are more than the resources I have available. I cannot give your file the attention it will deserve. So I must be honest and tell you that I am terminating our contract. I strongly encourage you to speak to some other lawyers immediately. Your file is ready for your pick up or I can forward to an attorney of your choosing. I really appreciate this opportunity but you deserve more than my firm can give you at this time.”
Or
“After investigation of your claims, I do not believe there is enough of a case for my firm to continue to pursue your claims. Here are the reasons I do not believe we will be successful: reason A, B, C, D……. I cannot dedicate the time and resources your case requires and therefore I must end our representation. I strongly encourage you to speak to some other lawyers immediately. Your file is ready for your pick up or I can forward to an attorney of your choosing. I really appreciate this opportunity but you deserve more than my firm can give you at this time.”
The good people will understand. That is another factor that makes this a tough decision—you may personally really like this client. But this is about a healthy business, not a charity. Some will be upset—and may push back hard. If they are, you should be giving yourself a pat on the back for making the right decision to release this case/client. Stand your ground and commit to your decision. It is a well-reasoned and thought-out choice. Believe that. The ones who are usually most upset are the ones who have no case, never pay their bill or call you every 5 seconds for updates. You don’t need them and neither does your firm. Wish them well and move on. And follow up with a letter to them. Practice tip: Verify their address at your last meeting.
These four steps are just a start. It may or may not be a fit for you. But the legal industry is full of file cabinets with cases/clients that should not be there. The case just sits and sits and sits. And the client gets upset because nothing has been done. Be proactive and cull the herd. Maximize your profitability by minimizing your caseload. It will take some time and a leap of faith, but you will see an increase in profits, client satisfaction and, most importantly, referrals. And it will improve your case selection so this process may eventually become extinct for you.