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August 29, 2006

More on Bad Clients--Who's "Bad", Anyway?

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.

Posted by JD Hull at August 29, 2006 11:30 PM

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