The Real Cost of a Problem Client
When opening a solo practice, attorneys usually make two big mistakes.
One, because they are new to running a business, they minimize expenses without considering the upside of certain “unnecessary” expenses.
Two, they are so desperate for clients that they take any client and any case that walks in the door.
But the hidden costs of problem client can easily negate their fee. The sooner you understand that concept, the better.
Money is money right?
Yes and no. If you turn down a client, you have just turned down a fee. Hopefully another client will come along and replace that lost fee. But that can be a dangerous proposition, especially if you are going through a slow period, or if you are just starting out. Every experienced attorney has been there—you have to keep the lights on.
At the same time, problem clients have an amazing way of sapping your time and energy in ways that you cannot bill for. For example, you can’t bill a problem client because their case (or representation) is really stressful. You probably can’t bill a client extra for only being able to talk or meet in the evenings or the weekends. You definitely cannot bill a client extra because you have a personality conflict.
Perhaps the ultimate disaster is a problem client who then bails on a bill. Try this one on for size: problem client on retainer. Problem client stops paying. You cannot withdraw because it would cause undue prejudice to problem client. You now continue to do work with little to no hope of getting paid. That retainer you got up front suddenly doesn’t seem so great.
Usually problems get worse, rather than better
Like most attorneys, I have had a handful of clients that I would consider problem clients. Generally, they became more problematic as the representation progressed. I can only think of one client that appeared problematic and actually became very easy to work with (disclaimer: the client was before I wrote this piece).
In other words: you are doing yourself a disservice if you tell yourself “it can only get better” or “it has to get better from here.” Sure, you can cross your fingers and hope they suddenly start responding to phone calls or e-mails. Maybe the first three appointments they missed were truly emergencies. But I doubt it.
Hopefully your retainer has a provision related to these scenarios. Hopefully you are not afraid to invoke it and terminate your representation. I’m not suggesting you become cut-throat and cut loose every client that is five minutes late to a meeting. But if they no-show, or are two hours late, that is a serious red flag.
The warning signs are usually clear
There will always be clients that turn into problem clients halfway through a case, with no advance warning. Usually, in my experience, that is the result of something happening in the case that you did not, or could not, possibly foresee. You should not waste your time trying to play Nostradamus and trying to see the future.
What you should do is watch for obvious signs of trouble:
- Calls with a legal emergency, and then waits six days to return your call;
- Sends four e-mails with documents before ever talking to you;
- Makes an appointment and then no-shows or reschedules repeatedly;
- Tells you what the law is/how the law works;
- Tries to bargain on your rate or explains why you are too expensive;
- Explains they previously hired ____ but want to give you a shot;
- Tells one story over the phone and a completely different one in your office.
That’s not an exhaustive list by any means. Those are just some of the red alerts that I have encountered. I’m also a firm believe in trusting my gut. If your gut says something is not right—something is probably amiss. That is the perfect opportunity to bounce the case off another attorney and get some feedback.
But never try and convince yourself that a client is a client. It’s not that simple.