Turning Business Away: A Long-Term Strategy

By on March 26, 2012 in Client Intake, Practice Management, Reputation Management

We talk a lot on Lawyernomics about how to optimize your practice and grow your business. Doing so is obviously of critical importance for anyone trying to get a practice off the ground. But what about a longer-term strategy: turning business away. Yes, that’s right–turning business away. Making the decision to not seek certain types of business, and showing it the door even when it has cold hard cash to spend on your services. Here’s why:

•    Specialization Matters, Big Time. Too many lawyers try to offer anything-to-everyone types of practices. But in a crowded legal marketplace, it’s really hard to differentiate your practice when you’ll work on any legal problem that walks in the door. Plus, you’re not going to be as good at any given practice area as an attorney who specializes in it. On the other hand, a lawyer with a specialized or niche practice will get really good at that practice area–which means they can charge premium rates. Furthermore, specialization allows you to get a much higher return on your marketing expenses, as your marketing will be highly targeted at only those potential clients looking for help in your specialty.

You’d think specialization would be a no-brainer, but it’s all too common to see solos and small firms with practices covering a dog’s breakfast of practice areas. Specialization requires a willingness to close off options, and perhaps not grow your business as quickly as you’d like in the early days. But the internet and social media have enabled all sorts of niche practices to flourish. The short-term work to get your practice focused pays major dividends down the road.

•    Some Clients Stink. A commonplace across all industries is that 20% of the clients cause 80% of the work. And by “work” I don’t mean billable work, but the kind of work that taxes and saps your practice: payment problems, administrative hassles, armchair quarterbacking, neediness, etc. Besides being less profitable than your good clients (and oftentimes unprofitable), these bad clients suck your reservoir of good cheer and creativity. They make it harder to delight your good clients. Let this continue unchecked, and you become a bitter, cynical attorney with a stable of crappy clients.  And who needs that?  Every practice must ruthlessly focus on cutting loose the bad clients and devoting more time and energy to serving the good ones. And if you can identify the problems coming in–and not let them hire you in the first place –so much the better. Many attorneys have developed systems for flagging potential problem clients during the intake process.  This needn’t be difficult or extensive, but it does require a willingness to let some paying business walk. Trust me, you’ll be better off for it.

•    Not Everyone Deserves Their Day in Court. You’re not in law school anymore. “Potential liability” doesn’t matter; what matters is the odds of winning, the ability to collect and the peripheral effects that flow from filing a lawsuit, or even threatening to do so. Just because a potential client is a) angry and b) can write a check doesn’t mean you should indulge their desire to file a frivolous or ill-considered lawsuit. Many clients are served best by advising them to move on with life. And should they persist, you must consider the impact of having your name on that demand letter or lawsuit. Your reputation is critical, and–particularly if you specialize–you want to have a reputation as someone possessed of considered judgment, who guides his or her clients to the best outcome, even when it doesn’t involve the courthouse. Do you really want to be a trademark bully, copyright abuser or the guy who sued the internet?

Yes, it can hurt to turn away business. And there may be patches in every practice where you have to extend yourself and work on a matter outside of your niche, or for a suboptimal client. The goal, however, should always be to get to a point–as quickly as possible–where you are only doing the focused work that you are expert at, for clients you like, on matters that matter.

Josh King

About 

Josh King is General Counsel & Vice President of Business Development at Avvo. He is responsible for Avvo's legal, business development, business operations, customer service, finance and human resources functions. He is also a frequent writer and speaker on interactive media and professional ethics issues. Prior to joining Avvo in 2007, Josh spent over a decade in the wireless industry, in a mix of legal and non-legal roles: Vice President, Corporate Development at AT&T Wireless, Director of Business Development for Clearwire, and General Counsel for Cellular One of San Francisco. Josh started his legal career as a litigator in the San Francisco Bay Area.

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Comments (1)

 

  1. Lalita Haran says:

    Building a specialized law practice involves total focus on that area and this means one cannot meddle with any other areas of practice. This does mean referring out clients who need services other than your area of practice but it is the best thing one can do for the client and self.

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