When Should You Fire a Client? Some clients are more trouble than they're worth. The revenue and profit margin on the account does not justify the time, energy and resources that the client demands, and that you and your firm put into it.
You've probably heard of the Pareto Principle by its more common name, the 80/20 Rule. It says that 80% of the effects (profits) come from 20% of the causes (clients).
Have you heard, though, of the salesperson's 80/20/30 Corollary? It says that 80% of the aggravation and misery comes from the bottom 30% of your clients.
If you have a client you suspect might not be worth it, ask yourself this question: Would it bother you to let the competition have the client? If you'd rather have your competition spend the time and energy on the client, let it go.
(Of course, this is all predicated on the fact that you are out in the market, actively pursuing more attractive clients. If not, you're stuck with whatever you have.)
Does This Client Make Sense for Me?
Some years ago I had lunch with the VP of Sales at a large East Coast securities brokerage firm, who wanted to discuss my training their new brokers. I was flattered to be approached by such a prestigious firm, but once I quieted my ego I realized that this deal made no sense. The brokers were at early stages of their careers. They'd have limited opportunities to sell to significant buyers, so it would be hard for me to deliver victories with sufficient economic value for dramatic success. Also, I would have to learn a whole new industry, culture, language, sales process and ethical rules, etc.
There was no way I could charge the securities firm enough to offset the cost of that learning curve. Unless I intended to market to other securities brokerage businesses (in which case I could amortize the learning curve cost across an entire market) this deal just didn't make sense. To avoid saying, "No, I can't help you," I offered them a one-day educational seminar that wouldn't require major modifications to my existing methodology, and I was relieved when they declined.
Just because business becomes available doesn't mean it makes sense for you. Remember to make a conscious "Go/No Go" decision on each alleged opportunity. (This is especially important in hot markets where there's a lot of activity.)
RainmakerVT is interactive virtual business development training based on processes by which lawyers like you consistently acquired enough great clients to let the problem clients become someone else's problem.