Learn to Say No to Money and Yes to Success

Not every prospective client is a good client for your business strategy. When evaluating your business think about your clients as your “book of business”, like you would your investment portfolio. It must be balanced and reviewed often. Many solo attorneys take the view that “I need the retainer”. Rather take the view that you need to balance your book of business to focus on the good clients you have and not take a retainer from prospective clients who do not help your goals. One-time clients should make up the smallest percentage of your book, 10% to 15%. Transactional or repeat clients should make up 75% to 80% of your book. The remainder can be left to your community service and development activities. If your client portfolio consists of more one-time clients you are going to find yourself in a time sink hole with very little reward seen in your business strategy. You can’t afford to be a one trick pony. Even, for example, Estate Planners, who by the nature of their area a law have large numbers of one time clients, should review their portfolio of business and figure out how to augment their core business with transactional (repeat) clients. This may include adding additional practice areas to achieve the best balance.

The most productive strategy for new business is harvesting it from your current clients. The only time to avoid a current client as a source for new business is when the revenue gleaned from that client exceeds 7% of your total revenue stream. You can’t risk your business on how well your client is earning their money. (7% is a rule of thumb I use that has worked well, your number my vary but it is important to have a risk tolerance number in your head)

A good client today is not always a good client tomorrow. As a business owner you need to be prepared to “upgrade” your book of business. You need to be willing to put the time and effort into culling out the bottom 10% (again a rule of thumb number that has proven useful the most important thing is to be watching) of your clients on an annual basis. Actively disengage from them at the appropriate time and make it your business strategy to replace them in the coming year with new “upgraded” clients that fits your strategy. Risk the loss of the weak revenue stream in order to free up your time to pursue stronger revenue streams. It’s important to learn to say no.

Written By: Jonathan On January 3, 2016 02:57 PM

Jack -

A few more comments about this post.

First, you have these seemingly arbitrary numbers. Where do they come from? Why should one time clients be 10 to 15 percent of my business? Mine happen to be about 80 percent of my business. Repeat clients in my field, personal injury, usually turn into bad clients simply because with each new accident the insurance companies are going to pay less money. Your statements are too broad.

Second, why should I upgrade my clients? The bottom 10%, which seems random, may be great people. Heck, I dont even know how to define the bottom 10% of my clients. Is it based on revenue? Is it based on the person? What is it based on? If I could figure it out, it would probably be the people who need me the most. Why should I dump them? Because they are bad for the bottom line? I would argue that these people are not only good for the bottom line, but good for my karmic influence in the world. Go read about any one of a number of companies that took care of the people who needed it and are now worldwide congolmerates.

Written By: Jack Casey On January 3, 2016 05:48 PM


Of course there is a practice area mix and client mix considerations in balancing your book of business. I used the example of Estate Planning not being one trick pony as that was the shortest route to my point but I can see, as I wrote you before, that I need to spend more time rounding out my topics and worry less about the length of the post. None the less, without more information (which I am sure there would be) on the face of it I would still recommend an overweight on a repeat client base. In your case that would probably mean the introduction of a new practice area, mostly likely by the addition of an attorney to your business. That is if the goal was to create a true business and not something that would end when you retire.

The “bottom” refers to any number of issues you may have. Yes, they could be financial, personality, latent area of law you are transitioning from, risk/reward imbalance, and the most important to clear the way so that ethical conflicts don’t preclude you from taking advantage of a new direction for the sake of an old entanglement. The best way to prospect for new opportunities is with your current client base unless it is not well balanced.

As for your karmic integrity I am all for it. I encouraged it in the post and believe there is not enough work done to help our social fabric. I did end the post with a revenue comment and that must have swamped the encouragement to leave substantial time for socially beneficial work. Again I will refine my writing style. However, the title of the blog is to run your firm like a business. You should balance your book of clients. It is natural, prudent and healthy for the business. The criteria you use are part of your well planned business strategy.