Developing Good Client Selection and Declination Procedures

Not All Business Is Good Business

By: Whittney Dunn, Risk Manager, The Bar Plan

An initial consultation with a client is the opportunity to make a positive first impression and win a new client. After all, it is during this initial meeting that potential clients will draw their conclusions regarding an attorney’s strengths, weaknesses, and abilities to assist with their goals. But some attorneys never consider that the initial consultation is also a good time to look back across the desk at potential clients and the strengths and weaknesses of those clients’ cases with an equally discerning eye. Having law firm procedures in place to identify clients your firm does want and clients your firm doesn’t want prior to representation is an important step to protecting your firm from unpaid fees, malpractice claims, and other business risks.

In order to determine what types of clients and cases you do and don’t want, first rank your clients and cases (both current and future) to determine what types of clients and what mix of client types you want for your practice. Once you’ve determined what types of attributes your most and least desirable clients possess, you can utilize that information to determine the clients and cases you will and won’t take going forward. For example, do you find that the majority of your best clients are business owners? If so, it might benefit your practice to seek out more business owners as clients. Or perhaps clients who own their own businesses are your biggest headaches. Only you can analyze your current and potential client base to determine what types of clients work best for your firm.

While it is true that most potential clients are going to have problems of some sort, there are some types of clients and cases that possess certain “Red Flags.” It is up to your office to determine which Red Flag clients and cases are worth the potential risk and which ones are not. The below list of possible Red Flag client and case types is based upon common causes of malpractice claims and fee disputes and should not be considered exhaustive.

Red Flag Clients and Cases

• The case was rejected by a previous firm.
• The case has an unavoidable sense of urgency.
• The case requires more work input than you will receive in income.
• The case is outside your area of expertise.
• The case has an actual or potential conflict of interest.
• The case is a contingency case with considerable costs.
• The case exceeds your staffing ability.
• The client is changing attorneys.
• The client’s expectations exceed your evaluation of the case.
• The client says, “It’s not the money, it’s the principle.”
• The client has performed a considerable amount of research on his or her case.
• The client makes you feel uncomfortable.
• The client does not seem to be truthful.
• The client protests your projected fee budget.

Best Clients and Cases

Once you have settles on which types of clients you are not willing to accept, you should also determine what types of clients are most desirable for the professional and financial goals you have set for your firm. While your ideal client may vary slightly, we have found that the best clients and cases meet all of the following criteria:

• The case is in your area of expertise.
• The case has good facts.
• The case is profitable.
• The client is respectful, cooperative, and truthful.
• The case fulfills your personal and professional goals.

It may be difficult to find a client who meets each of these requirements; therefore, it is up to your firm to determine how many of these criteria a potential client or case must meet to be worthwhile. A potential client or case that lacks any of these characteristics may not be a positive use of your firm’s time or resources. It is also possible that a client or case could have one or more of these positive attributes, but the representation would still be undesirable due to one or more Red Flags.

Client Intake Forms

Utilizing these two lists, your firm should institute procedures to dig into a potential case and determine which Red Flags or positive criteria are present. Your firm’s client intake forms or client questionnaires should incorporate fields that will expose whether or not the client or case has any Red Flags. For example, the form should include a question regarding whether or not the potential client has spoken to any other attorneys about his or her case and a request for additional information if the answer to that inquiry is “Yes.”

Once your office has developed procedures to spot and turn away potential problem clients, these procedures should be fully incorporated into your intake and declination process. This may require staff and attorney training to ensure the procedures are followed. Your firm should also take care to always send a non-engagement letter to any potential client the firm will not be representing.

If you or your firm has any questions about risk management issues, you should contact the appropriate ethics authority in your state and reach out to The Bar Plan Risk Management Department at 1-800-843-2277 x171.