This drawing by Hugh Macleod (“cartoons on the back of business cards”) reminded me of the Misery Index that Steven Harper introduced last April in his excellent Belly of the Beast blog. (He’s on vacation now, so you’ll have to wait until Aug 15 for his next post.)
Setting aside the miseries that Harper associates with BigLaw’s pursuit of ever-greater PPP, most of the thousands of lawyers I coached, without regard to firm size or practice specialty, admitted to one common “hate my life” factor: Having clients that they wished they didn’t have, who
- constantly complain,
- are never satisfied,
- always want it “last week,”
- nitpick bills and
- demand write-downs, etc.
We’re all familiar with the Pareto Principle, which says that the top 20% of clients generate 80% of profits. Lesser known is the 80-20-30 corollary, which says the bottom 30% of clients are so unprofitable (or unreasonable) that they consume 50% of the profit generated by the profitable ones.
We all know the parallel personal effect, i.e., the bottom clients’ demands are so out of proportion to their strategic or economic value that they make us miserable.
So, why do so many lawyers, aware of the economic and emotional impact of bad clients, keep them, anyway? Because they aren’t confident of their ability to replace bad clients with better ones. ”Bird in the hand…” etc.
Most lawyers’ client lists are the product of some effort and a lot of serendipity. During the just-concluded 20-year boom market for legal service, clients just materialized, by means unknown. Since they did so at a fairly prodigious rate that fueled steady revenue- and profit growth, nobody had much reason to try to figure it out.
If you have no idea where this client came from, it’s hard to be confident that you know where the next one is coming from. So, you put up with bad clients that suck the economic and emotional life out of you, contributing to your personal Misery Index.
Now that you really have to hustle to get clients, stop chasing or accepting anyone who can fog a mirror. It’s worth the time and effort to decide what kind of clients you want, and pursue them in a planned, sustainable way. Before long, you’ll have grown the profitable 20% and eliminated the toxic 30%. No more hating life.
For detailed help defining and creating your ideal portfolio, go to RainmakerVT Courses and begin with Planning: Create a Marketing Plan That’s Actually Useful.
Profitability graph source: Nigel Hill, “who has been involved in customer satisfaction for 15 years, forming The Leadership Factor to specialise in the discipline in 1996. He is the author of several books including The Handbook of Customer Satisfaction & Loyalty Measurement and How to Measure Customer Satisfaction. He presents seminars and workshops on Advanced Customer Satisfaction and Loyalty Measurement in the UK, US and Australia.” Email: email@example.comTel: 01484 467002