What do you count as a bad client?

I regularly encourage accountants to ditch their bad clients. There are two primary reasons for this.

– Following the Pareto (80/20) principle, you can be sure that your worst clients (however small the number) cause the bulk of the problems and hassle that you suffer. Conversely, 80% of your profits are probably generated by the top 20% of your clients.  I first commented on this concept last October.

– The complaints from and problems caused by your worst clients are more likely, than your best clients,  to end up as professional negligence claims or reports to your professional body for unprofessional conduct.

What counts as a bad client?

Let’s see if we can create a definitive list.  I’ll start with the examples I share during my talks for accountants.  Readers are encouraged to add their own  suggestions as comments.

On my list would go clients who display 2 or more of the following tendencies:

Before they become clients

  • Evidently expect free advice on the phone;
  • Reluctantly attend a meeting and seek further free advice;
  • Challenge elements of your standard terms and conditions;
  • Resist producing suitable identity verification evidence;
  • Delay signing your engagement letter whilst expecting you to start work;
  • Mentions that they have sued or reported one or more of your predecessors;
  • Resist making any form of up front payment (where this is part of your terms)

After being engaged:

  • Seeks further advice but is unwilling to accept that this will increase your fees;
  • Changes the scope of your work;
  • Resists any increase in your fee to reflect additional work they have requested [nb: I’m assuming that you would notify them of the increase before starting the extra work] ;
  • Appears not to value your time;
  • Insists on ‘gut feel’ advice rather than fully researched advice;
  • Uses buzz words and terms that they evidently don’t really understand;
  • Regularly needs to be chased up to provide information or other responses to your enquiries;
  • Delays production of key documents until the last minute;
  • Does not pay your fees in accordance with your payment terms.
by

Become a rainmaker for your practice

The term ‘rainmaker’ means different things to different people. In professional service firms it tends to be used to refer to a partner who brings in lots of fees. In some firms the rainmaker has no other repsonsibilities. This is increasingly unusual however.

In my role as the Accountants’ Business Coach I have often used the description ‘finder’ rather than ‘rainmaker’. I have distinguished 12 key business skills as falling under the headings of:

  • Finders – who go out and find the new work
  • Minders – who look after the relationship with the clients
  • Binders – who keep the team working well together
  • Grinders – who do the work [this requires technical skills rather than business skills as such]

The point being that to be a good ‘finder’ you need at least 4 of the 12 key business skills.

Finding

  • Networking – meeting new people and generating work through those you meet;
  • Speaking in public – being confident and clear whether talking to small or large gatherings;
  • Pitching – asking for work or responding to invitations to tender;
  • Closing – gaining new work on acceptable terms;

Of course there are plenty of good rainmakers who never have to make a formal presentation to large groups of people. With that exception any good rainmaker will be confident across all four of those key skills.

To complete a piece of research I have been undertaking recently I’m asking readers of this blog:

  • Is it important that someone in your practice is a good rainmaker?
  • Do you relate to that concept better than that of being a ‘finder’? and
  • Are there any other skills or talents that you feel a good rainmaker needs to possess?

Please post your comments below. If you would like to see how you fare against the full checklist of a dozen key business skills, please let me know and I’ll gladly send you a copy.

by

Lady McCartney 'set to sue divorce lawyers' – what did she get for her money?

I was intrigued by a piece in the paper today about Heather Mills being sued by her divorce lawyers for non-payment of her legal fees and that she may launch a counter-suit. According to a ‘source’:

“There is a possibility of Heather Mills counter-suing. Whatever she owes [the lawyers] – whether it’s  £1 million or £2 million – one would have expected her to get something for it.  There has been no divorce settlement and no outcome over all this time.”

This got me thinking. How much can professionals charge for giving advice that does not secure the desired result?

It’s not as easy as that of course. In litigation, for example, only one of the parties can win but both sides will have to pay their lawyers.  Negotiations with HMRC will not always result in them going away empty handed. Not all tax planning will achieve the hoped for outcome.  And of course the terms of one’s engagement will normally make clear that fees are payable on the agreed basis regardless of the outcome of the adviser’s efforts.

But there are also plenty of occasions where a professional adviser’s fees are dependent upon the outcome of the work undertaken.  Corporate financiers for example will often only get paid if their efforts to secure finance or a listing are successful – if not all their fees are at risk, certainly a large proportion will be.  If they are successful they will effectively benefit from a success fee – to compensate for the number of occasions that they are unsuccessful.

Is this comparable with the salesman at John Lewis who spends time helping all prospective purchasers even though  John Lewis only generates cash (to pay salaries) if a sale is actually made?

What do your clients get for their money? Is this apparent even when the final outcome of your work is perhaps not what they might have wanted?  Or are you in danger of being counter-sued by an unhappy client if you sue for non-payment of your fees?  Setting expectations at the outset is critical of course – oh, and be wary of celebrities!

by

Lady McCartney ‘set to sue divorce lawyers’ – what did she get for her money?

I was intrigued by a piece in the paper today about Heather Mills being sued by her divorce lawyers for non-payment of her legal fees and that she may launch a counter-suit. According to a ‘source’:

“There is a possibility of Heather Mills counter-suing. Whatever she owes [the lawyers] – whether it’s  £1 million or £2 million – one would have expected her to get something for it.  There has been no divorce settlement and no outcome over all this time.”

This got me thinking. How much can professionals charge for giving advice that does not secure the desired result?

It’s not as easy as that of course. In litigation, for example, only one of the parties can win but both sides will have to pay their lawyers.  Negotiations with HMRC will not always result in them going away empty handed. Not all tax planning will achieve the hoped for outcome.  And of course the terms of one’s engagement will normally make clear that fees are payable on the agreed basis regardless of the outcome of the adviser’s efforts.

But there are also plenty of occasions where a professional adviser’s fees are dependent upon the outcome of the work undertaken.  Corporate financiers for example will often only get paid if their efforts to secure finance or a listing are successful – if not all their fees are at risk, certainly a large proportion will be.  If they are successful they will effectively benefit from a success fee – to compensate for the number of occasions that they are unsuccessful.

Is this comparable with the salesman at John Lewis who spends time helping all prospective purchasers even though  John Lewis only generates cash (to pay salaries) if a sale is actually made?

What do your clients get for their money? Is this apparent even when the final outcome of your work is perhaps not what they might have wanted?  Or are you in danger of being counter-sued by an unhappy client if you sue for non-payment of your fees?  Setting expectations at the outset is critical of course – oh, and be wary of celebrities!

by