I’m a lawyer. I really am. I have been for 26 plus years. I’ve always been able to attract clients and must have done a competent job for most of them since I’ve had a lot of repeat business. This doesn’t make me an expert on business development, as we call it. Honestly, I’m not sure how best to go about that. Moreover, the legal world is chock full of advice on building your practice, marketing and generating new business. It’s doubtful that I have much to add to that vast sea of information, or misinformation, as the case may be.
I once worked in a law firm that was concerned to the point of obsession about generating new business. “Origination” was the term they used. If one “originated” enough business, he or she became a “rainmaker,” the most valuable of all lawyers, regardless of legal acumen or lack thereof. The rules regarding origination credit were Byzantine and ever-changing. For example, you might think you deserved credit for a new client, only to find out that aged partner had represented an employee of the company on a DUI many years ago. Thus, he was entitled to the credit. After all, he had planted the seed decades ago. As one of my partners once noted: “The Origination rules aren’t written down. That’s understandable since they change every day.”
Although I have created my share of personal marketing plans, I claim no expertise. I’ve thought both outside and inside the box. I’ve been proactive. I’ve networked. I’ve schmoozed and small-talked. I’ve even found time to practice quite a bit of law. None of this sets me apart from other lawyers.
The one area where I believe I have something to contribute is in turning down business or knowing when existing business is turning sour. For a long time, I wasn’t good at this, much to my chagrin. Now, though, I know the red flags that warn me to stay far away from a potential client or to at least understand my situation. I’ll share a few of those with you.
1. PRIDE GOETH BEFORE A FALL
At least that’s what it says somewhere in the Bible. It doesn’t really apply here, but I like saying it. Any the who, it goes without saying that we don’t want to represent folks who will refuse to pay us. Now, this is different from a client who suddenly can’t pay. I’ve represent several clients–individuals and companies–who sunk into dire finances during my representation of them. This is a professional risk. It’s happened to some of my favorite clients.
The ones I’m talking about are the ones who won’t pay. Here’s a bad sign: You are the third lawyer they’ve hired on a particular matter. This is a person who doesn’t play well with others. Just as important, this person has had bad relationships with other lawyers. Why? It probably has something to do with money. Ask this potential client if he owes the other lawyers money. If the answer is “yes,” run! A client that will stiff one lawyer will do it to you. At least ask for an upfront deposit against your fees. If they aren’t willing to invest in their case, you shouldn’t either.
Related to this is the client who doesn’t want to discuss your bills. Oh, he or she paid you regularly for a while, then slowed a bit and finally stopped paying. You ask about it and are told that the client will be caught up soon. Don’t worry. When you hear that, worry. A lot.
Lawyers are an odd breed. We don’t like to push our clients about bills. Perhaps we are embarrassed by the amounts we bill. Maybe it’s just an uncomfortable topic. Regardless, when you don’t confront, it gets worse. It’s Business 101 that the older a bill gets, the less likely it is to ever get paid.
The question, of course, is: When is enough enough? There’s no way to state of rule of thumb here. Large law firms are able to carry large receivables for a long time. Small firms like mine can’t. Here is an exchange which should end your representation immediately (I’ve had some variation of this multiple times):
Lawyer: Carl, we need to talk about your bills. We haven’t been paid in six months, and we need to get this caught up.
Client: I know. I know. We have cash flow problems, but we’re working on it. I don’t know when we’ll be able to get caught up, but we’re good for it.
Lawyer: I appreciate that, but we can’t commit substantial time and expense without some assurance of getting paid.
Client: What do you mean? Are just going to quit on me?
Lawyer: I don’t want to do that, but I’ll have to if we can’t get paid.
Client: You’ve insulted me. If you don’t want to work on the case, that’s fine…
See what we have here? You–a business person–have addressed the most basic need of your business–income. Your client is insulted by the prospect of having to pay you. You must run from this client with all haste. If you don’t, don’t expect to ever get paid again.
2. DON’T REPRESENT CATS
Of course, it’s well-known that there are no cat herds. Cats don’t do that. They just scatter about. Some of your clients are like that. They aren’t dogs. They don’t have a leader. They are cats, scurrying about with no one in charge. These are not good clients.
The Cat Client comes in various forms–corporations, families, virtually any collective of people. No one is in charge. The point person, your “client contact,” as we call it, seems to be the boss until real decisions have to be made. Then, no one is in charge. In a corporation, you may hear from the President, the CFO, the in-house attorney or the janitor. They all have differing views on the goals to be achieved. If you need a question answered quickly, good luck.
I’ve represented several churches in my career. Each was a fine organization headed by fine people, but no one was in charge. The minister works for the church at the pleasure of the Elders or whatever group is supposed to be in charge. That group has no leader. They make decisions as a collective. Getting direction is almost impossible. You’ll end up frustrated, and so will they. Steuerberater