Manage Your Time Better by Selecting Clients Wisely: Clean Up Your Caseload

Selecting clients wisely helps protect against malpractice, and saves a lot of time. It also boosts morale, and restore peace in a crisis-driven practice.

 By Mark Powers & Shawn McNalis 

“I’ve got to get out,” a litigation attorney said to us recently in a shaky voice. “If you can’t help me figure out a way to sell my practice, I’ll close the doors and walk away. I’m not kidding — I can’t take it much longer.” On the edge of a nervous breakdown, this attorney had come to us seeking a way out of what had become an unbearable situation. He felt ground down by the unrelenting demands of his practice. Now in his mid-fifties, this attorney had a little money set aside and not surprisingly, he wanted out.

His is an extreme example, but it is safe to say the number of attorneys who feel seriously stressed and unable to manage their time is reaching near epidemic proportions. In fact, according to a study done by Johns Hopkins, fifty-one percent of attorneys experience stress at rates significantly higher than the ‘normal’ population.[i]

Selecting Clients Wisely: Stress, Anxiety and Pessimism

Is it natural that attorneys across the board are afflicted with such anxiety? Or is there something about the make-up of attorneys that predisposes them to higher rates of stress? Perhaps there is. Another John Hopkins study of all types of graduate school programs done in 1990 came to the conclusion that graduate students who are optimists outperform pessimists by a wide margin, with one exception: students in law school.2

Pessimism is rewarded in law school. And further reinforced when an attorney goes into practice.

This is not news to many of you who have observed this phenomenon in either yourself or your peers. Pessimists anticipate the worst which is a valuable trait when working with troubled clients. Those who anticipate the worst tend to plan for it and are better prepared than those attorneys who expect a rosy outcome. Pessimists aren’t quick to believe everything they are told and maintain a certain amount of skepticism – very important when questioning a witness or listening to their own clients. Success favors the pessimist in the legal profession.

Unfortunately, the traits that make a good attorney don’t always make a good businessperson. The attorney who is not buoyed by the natural sense of optimism which supports and sustains most other professionals lives in constant fear that their practice may not survive. Driven by this sense of impending doom, and underscored by the lack of true business training attorneys receive, they tend to make poor business decisions.

Among the worst is their failure to effectively screen new clients.  Unfortunately, practicing “threshold law” (working with anyone who crosses your threshold) often feels like the right thing to do but invariably leads to further distress because of the many problematic (non-paying and uncooperative) clients who get in the door. If you want to effectively manage your time, start with the cases you accept.

Selecting Clients Wisely: The Smallest, but Most Significant Segment

If you were to apply Pareto’s Principle, also known as the 80/20 Rule, to your client base, you would probably discover that 80 % of your income comes from only 20% of your clients.  Hidden in your client list, this 20% are the smallest, but most significant segment, of your client base because they generate the largest share of your revenues — but take up only 20% to 40% of your time.  This is worth repeating: your best clients, the top 20% whom we’ll call your A and B level clients, take up only 20% to 40% of your time yet are responsible for 80% of your revenues.

Think of this in terms of how you spend most of your time. The remaining 80% of your clients take up a great deal of time and generate only 20% of your income. Why? These are the problematic clients who will agree to pay you — but after taking up a great deal of your time, often neglect to do so. Their poor payment habits are significant because not being paid not only adds to the stress you feel, it means that you spend an inordinate amount of time working on C and D level cases for which you won’t be fully paid.

Take a look at the following checklist of symptoms signaling an overload of problematic clients. If you check off even one of these symptoms, it’s time to reengineer your new client screening process because the effects of practicing threshold law have already disrupted your practice — and will only get worse. 

Symptoms of a Practice with Many C and D Level Clients

• High outstanding receivables – doing quite a bit of work that you or your team will not be paid for
• Clients who leave prematurely or often threaten to seek the services of another attorney
• Clients who often fail to show for scheduled appointments

• Clients who often fail to bring requested documents or to follow directions
• Staff who feel abused by clients who misdirect their anger and scream at them or act unreasonably
• Experiencing a constant sense of crisis and tension that is attributable to specific clients and/or specific opposing counsel
• Staff and attorneys who dread going to work and dealing with certain clients
• Staff and attorneys who often feel they can’t meet the high expectations of some clients
• Staff and attorneys who never hear “thank you” or any acknowledgement for their efforts – even when major victories occur for certain clients

If you check off more than one of these symptoms, it’s time to take control of the situation you may have unwittingly created by not screening for clients who will pay you, cooperate with you and appreciate your efforts. Experience in working with hundreds of attorneys over the years has shown us that you owe it to yourself, your team and your firm’s bottom line to raise your standards. Start now by being more selective in choosing who you will work with and in part 2 of this article we will discuss the steps you can take to systematically clean up your caseload.

Manage Your Time Better By Selecting Clients Wisely 

In part one of this article, we addressed an insidious problem experienced by most attorneys at some point in their career: the failure to be selective in choosing which clients to work with and which to turn away. We call the problem insidious because it may start out innocently enough: you see someone who needs help and you try to provide it.  But when things do not go well, you end up with collections problems, a beleaguered staff and tremendous personal stress. The impact of working with C and D level clients affects your ability to manage your time profitably in a big way.

If you suspect you are too lax in your standards and are suffering these consequences, you can follow the steps listed here to clean up your caseload. You’ll be surprised at how energizing it is to take control of your practice in this way.

• Step One: Go through your case list and rank your current clients A, B, C or D.  Note the A and B clients (these will rank highest in terms of bringing you the type of work you prefer to do, their ability to cooperate, their ability to take direction, and their ability and willingness to pay. Each type of practice will have their own criteria, but these are the basic requirements). Using this system, determine which clients qualify as A and B level, then identify the lower level C and D clients.

• Step Two: If you think any of your borderline C clients can be “rehabilitated” and upgraded to a B level, sit down and have a very straight conversation with them about what they are doing that is a problem (need to bring payments current, need to start producing documentation that is needed, need to stop canceling meetings, etc.).  Some will respond positively to this approach; some will not.
  Take the rest of your C clients and refer them to another attorney if their issues are personality-based, not payment-based.  Avoid sending clients who won’t pay to another attorney.

• Step Three:  Take your D clients and let them go.  You can let them know in person or you can phone them and follow-up with a letter.  Check your local rules to be sure you follow the proper protocol. Your bar association usually has sample disengagement letters that you can use.  Disengagement and non-engagement letters are especially critical when a lawyer decides not to continue past a specific stage in the case.

If you decide to let the client go in a face-to-face exchange, you need to have a plan. 3 Review and follow the steps below (your local bar rules will supersede any advice given here, so be sure to check them in advance), remembering to document the conversation after the meeting.

1. Set an appointment with the client and plan to have a witness in the room with you if you feel the client is irrational or likely to accuse you of misconduct later on. Document your meeting by summarizing the discussion in a letter and sending a copy to the client.  Put a copy in your own file to protect yourself in case of a complaint). Try to set the client up for the firing conversation and begin to limit their reaction by saying, “You may not like what I am going to tell you, but I feel I can no longer represent you (or work with you) due to…”
2. Give the client the context for your decision so they will not think it is arbitrary.  Link your decision to their attitudes and/or behaviors. Give specific examples of where the communication broke-down, where they were uncooperative, where they were rude or abusive to you or your staff or where they failed to pay.
3. Explain why the behaviors and/or attitudes expressed by the client make it uncomfortable, unethical or inappropriate for you to continue representing them.  Be factual and objective.
4. Give the client an opportunity to respond, ask questions or express their anger.  Resist being pulled into a discussion that escalates into a fight. Stay in control of the conversation by managing your own emotions.
5. If appropriate, act as a resource for the client and make recommendations as to how they should proceed. You may recommend counseling, a legal service agency or the names of other attorneys. (Remember to be very careful when referring unstable personalities and non-paying clients to your colleagues).  Call and discuss the situation beforehand to be certain the attorney wants to take them on.

 The Quality of Your Practice = the Quality of Your Clients

We maintain that the quality of your practice is determined largely by the quality of your clients.  Imagine how different your stress level would be if you worked with nothing but A and B level clients and the pro bono clients of your choosing (instead of clients who become pro bono cases by default). You might actually look forward to going into the office in the morning!  Just keep in mind that these A and B level clients tend to get lost in the shuffle as you scramble to handle the constant demands of your C and D clients.  For every negative characteristic you can attach to a client, you can be sure that you spend more time with that client persuading them to trust you, calming them down or trying to get paid.

Carefully selecting the clients you work with not only helps protect you against malpractice problems, it has the added benefit of saving you a lot of time, improving office morale, minimizing collections problems and restoring peace in an otherwise crisis-driven practice.  Believe it or not, to better manage your time, develop your client selection skills. The impact on your peace of mind will be significant.

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Mark Powers, President of Atticus, Inc., and Shawn McNalis co-authored “The Making of a Rainmaker: An Ethical Approach to Marketing for Solo and Small Firm Practitioners,” is a featured marketing writer for Lawyers, USA and a number of other publications. To learn more about the work that Atticus does with attorneys or the Atticus Rainmakers™ program, please visit www.atticusonline.com.