It’s post-tax season and like most businesses, lawyers are reviewing the bottom line from the previous year – some more enthusiastically than others.

Businesses must reflect on what worked and what didn’t, what to keep doing and those practices which may need to be discontinued.

Part 1- Choosing Clients

In any service business, your bottom line is dependent on clients and client behavior. This is particularly true for lawyers, whose sole business is serving clients.  Choosing clients is the lawyers equivalent to getting customers, and like customers, there are good ones and bad ones. While most product driven businesses have the disadvantage of not always being able to choose its customers, service oriented businesses can. As attorneys, solos and small firms, we should take great care in this process. Bad clients make for bad business and negatively impact the bottom line in ways that cost more than just your money- though that’s more than enough.

I recently read an article about ‘types’ of clients. The discussion centered around personality types of potential clients, and why some characteristics make for good or bad clients. Over the years, I have found that there is no one set of qualities that makes a client good or bad for your business, but there are some things the savvy solo should try to avoid.

Upon starting any service business, finding your best demographic is key. With lawyers, the beginning is where most mistakes will be made with regards to choosing clients, because the focus is on bringing in work, making money to stay afloat and building the brand. Unfortunately, these goals inherently force solo’s to weigh their best judgment against paying the bills. New lawyers and solo’s often overlook the slow paying client, the promises to pay later, and the client that pays but is a nightmare to work with without recognizing that these clients eat into their bottom line more than not having clients at all.

When I first started years ago, I was given some really good advice on avoiding clients that are more trouble than they are worth, and it has served me well since then.  Along the way, I have picked up a few others – some through experience; others from fellow attorney’s who cared enough to share.  I have found that anything I’ve already heard bears repeating:

You do NOT want every client.

It is acceptable to turn away a client that does not fit the personality of your firm. It is difficult to define this client, but your gut will tell you who they are.

Avoid co-counsel clients.

These are the people that know more than you do about the law. They would have been lawyers and are fully capable of litigating their own case or negotiating their own deals… but for the fact they have no degree or license to practice law. These clients will eat up your time sending you things they found on the internet, or calling you about what their sister’s best friends’ boyfriend heard from his dad, who happens to be a lawyer. These clients are not only stressful, but no matter the outcome of their case, they could have done a better job. Let them!

Try to meet face to face before signing on.

It is true that you can tell a lot about a person during face to face meetings. The old sayings about ‘reading’ a person hold true most of the time if one is paying attention. Body language speaks volumes.

Ask the right questions.

When deciding whether to accept a client, you are interviewing them as much as they are you. At least, you should be. While, finding out about the case matter and the intricacies thereof, also ask questions that help you learn about the persons character, expectations, and overall mindset. Do they blame attorney’s or other people for their problems, or bad-mouth prior counsel? Do they have an overall negative view of society and the legal system? Do they have a practice of not paying when they don’t get the outcome they want? Do they have unrealistic expectations of the legal system, or people in general? Does this client have prior cases in which they were a litigant (are they constantly suing people or being sued)? These are all signs of a potentially difficult client.

Determine level of intellect.

While this may seem insulting, there is a direct correlation between a clients level of intellect and their behavior with their attorney, and thus, your ability to get paid. Many people have never had to retain the services of an attorney and, worse, don’t fully understand their own legal situation. Though the law is not necessarily easy to understand, even for the best of us, a person who cannot understand basic concepts will be difficult to work for. Your time will be spent explaining and re-explaining things over and again and such clients are not inclined to compensate you for the numerous call and emails required to do so. At the other end of the spectrum, are those mentioned in Section 2, who inundate you with their take on how to practice the law, but who don’t want to pay you to ‘tell them what they already know.’

Avoid testers.

These are the clients who want you to ‘prove yourself’ before they hire you. This is typically a sham to get free legal work. People do not go to a doctor and say ‘heal me’ so I can decide if I’m going to work with you or pay you. The same holds true for any other service provider. It should not be expected of you, and sensible people do not. If a client wishes to see if your work fits their needs, refer them to references or other cases you’ve handled (public record of course), or invite them to watch you in court. It’s more likely this ‘trial period’ is designed to get legal work for free.

Avoid clients with several prior attorneys on the same matter.

These clients have, and will continue to find something wrong with any attorney they hire. They generally pay slow or not at all, and complain about everything. The client has already decided what the outcome of the matter is to be and will hop from lawyer to lawyer until they get it, even if its not reasonable. Chances are the client’s expectations are unrealistic and trying to meet their demands will cost more time and money than the case is worth. If the case is just so exciting you want to take it anyway, talk to the prior attorney and get some idea of what you’ll be dealing with. Remind your clients you have hands, not wands.

Refer out friends and family.

As tempted as you are to want to help relatives and friends with their legal woes, this is rarely a good idea. These people will certainly phone you because you are their family or friend. With that relationship comes the inherent belief that they should be treated differently than your other clients. If you must take on such clients, charge them similarly to your other clients, make them call your office about legal matters, and set expectations for working with you. After all, they will be getting the same level of service as everyone else. Deviations from this result in calls at home about their case, family disputes, broken friendships and ‘word getting’ out that ‘my friend/brother will handle your case for free!’ Worse, it will be difficult, if not impossible, to be paid for your services. This is not what you want.

Check references.

In almost every other high end service business a reference check is done to determine a person’s ability to pay. Lawyers are not banks, but essentially we are extending a line of credit to our clients (in some cases). Many attorneys charge fees up-front and place the money in the attorney’s trust account to bill services from. However, there are a great many who do not. Further, in many instances trust funds run out and must be replenished before a matter is resolved and the client must be subsequently billed. Just because a client has a genuine legal matter and needs counsel, does not mean they can afford it. Ford does not finance cars to people who cannot afford to purchase them, and neither should you extend services to those persons. Bigger firms certainly do!

Do you have any more to add?  Please do so in the comments.