Time to ditch your 'Batman' clients
Joel Barolsky
Professional services strategy adviser, facilitator and keynote speaker | Principal Edge International | AFR opinion writer | Senior Fellow University of Melbourne Law School
The full text of my opinion piece first published in the Australian Financial Review on 12 December 2021.
“Hello Batman!”
That’s how a top three client of a particular firm insisted that his calls be answered on his dedicated phone line and handset. Unlike the mild-mannered caped crusader, his tone in the conversation that followed was usually aggressive and demeaning.
Little was done to address Batman’s behaviour for several years because he was a very important client. When a new managing partner was appointed, the firm finally plucked up the courage to stop doing his work.
While this is an extreme example, most law firms continue to serve clients who are “wrong” for them.
There has never been a better time to deal with the wrong clients in your firm.
The?latest Australian Financial Review Law Partnership Survey ?points to a year ahead where demand will outstrip supply.?The risks of not replacing any lost revenue are much lower than usual, and the opportunity costs of continuing to deal with these clients are much higher.
Wrong clients
There are four broad categories of wrong clients, or sometimes referred to as the four ‘uns’:
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The task of classifying clients into one or more of the four categories can be a difficult exercise within a law firm partnership. There is often a lot of defensiveness and protection when it comes to labelling a client as ‘wrong’.
In some cases, the source of this resistance is emotional - the classification risks disrupting personal friendships and/or the legacy of long-term relationships.
In other cases, partners see a major risk to their personal practice. Any intervention to make a wrong client right risks a drop in earnings, progression or status if things don’t go to plan.
Taking action
Assuming one can get over the resistance, the next step is to decide on the preferred outcome of the relationship reset for each client. These outcomes usually range from terminal at the one end of a continuum to tweak at the other.?
Tweaking outcomes may include negotiating new commercial terms or seeking a substantive shift in behaviour, or simply taking away Batphones.
In some instances, the firm may elect to take unilateral action like notifying a change in pricing levels or changing the service team or refining scope and terms.?In the case of a terminal outcome, the firm may suggest alternative firms the client could consider with an offer to transfer old files and other records.
For more important strategic clients, a 360-degree relationship review might be a gentler way to address the issues. These reviews involve asking all the stakeholders to provide comments on the relationship as a whole, as well as their views on others’ performance and their own. Feedback can be sought on a range of factors like communication, value, trust and quality. This feedback is then shared between the parties and collective action agreed upon.?
The power shift from buyers to sellers in 2022 offers a unique opportunity to reset some poor relationships.
Notwithstanding any financial or other strategic benefits, the impact on staff morale from dealing with fewer Batman clients will be significant.
Insurance Law Partner @ Colin Biggers & Paisley | Resolving Complex Disputes
2 年You start to outline what's possibly a 5th as well don't you Joel Barolsky? Wrong doesn't have to mean bad: it might simply mean not a good fit. That could just be between a client and their contact at the firm, or it could be between the client and the firm. In the case of the former, hopefully a firm's performance metrics and culture would create the space for someone else stepping in (ego aside!). The latter's a whole other level of confidence to action, but who amongst us can't think of examples of feeling better for a client landing with someone who speaks their language - why force something that doesn't work?
Executive Director
2 年A timely reminder for all Joel Barolsky, excellent advice. I wonder how many will listen...and potentially act?
Professional Services Strategy | Business Development | Innovation
2 年A sound suggestion (as always), Joel Barolsky, applicable across professional service firms. "Who do we serve?" and "Does it continue to be profitable?" are sometimes awkward internal questions for leaders who may have built their own progression to the top table based on these clients. However, the most salient point for me is your final line - the impact on staff morale of dealing with problematic clients for no obvious commercial reason cannot be overstated. Thanks for another great piece.