The images of Donald Trump saying, “you’re fired” have gained sufficient traction over the last few years that most of us are aware of at least ten or fifteen ways to make the statement to an under-performing employee. Despite the occasional day when you might wish you could fire a particularly difficult client the same way, doing so would be unprofessional and could tarnish your reputation and the firm’s reputation.
There are times, however, when it is appropriate to fire a client. Those times might include such situations as:
- The firm has undergone a profitability analysis and decided this client does not meet its profitability criteria
- You decide to shift more of your time to working with a particular industry
- You decide to build a micro-niche and you need to move your least profitable clients to someone else.
- You need to devote more of your time to other firm business, such as marketing, rainmaking, speaking, etc.
In any situation that makes it appropriate for you to fire one or more clients, there are three primary ways to do this:
- Transfer them to a junior person – typically, the junior person will be able to devote more time to the client or bill the work at a lower rate. This approach is particularly appropriate when you provide only basic services to the client or when the client is particularly fee-sensitive.
- Raise your prices. In this scenario, the client will become profitable or will decide to move to another firm on their own.
- Introduce the client to another firm. If your firm has made the strategic decision to build several micro-niches over the next few years, you might find it necessary to open some time by “firing” clients in industries that will not be a focus in the future. It is also an appropriate way to move out clients who use a few basic services only.
If profitability, specialization or other changes in your firm’s strategic direction warrant it, sometimes many firms find it necessary to fire clients. It is important to do it the right way and to make it clear to the client that it is for a good business reason.
— David Wolfskehl