Beyond Biglaw: Categorizing Clients

In order to make a good decision about how to handle clients, it is important to assess their actual or potential contribution to the firm’s professional and financial bottom line.

Beyond BiglawWe are still close enough to the beginning of the year for most lawyers to have at least a vague recollection of their “year-end review,” irrespective of how formal or informal that review process was. While everyone assuredly focused on their “top-line” statistics from 2015 — such as billable hours and revenue collected – there was hopefully some consideration given to the makeup of each lawyer’s client list. Especially those clients who had an outsized impact on the year’s performance. The old maxim that 80% of your work comes from 20% of your clients is in most cases a solid one, and each lawyer has a responsibility to both themselves and their firm to understand which clients “pay the bills” — for them individually, and on a firm-wide basis.

At minimum, every lawyer in the firm should be aware of the firm’s “Big 5” — the five most important clients to the firm’s bottom line. Adjustments to that list may sometimes be necessary, particularly for firms that do a lot of one-off work, whether on the plaintiff side or in the context of certain one-time transactions. Likewise, there are occasionally certain clients of the firm whose cachet gives them an outsized importance, at least relative to their financial contribution. Each and every client of the firm is important, of course, but at the same time, certain clients can and should demand additional attention because of their strong ties to the firm, or because they are the source of critical projects delivering all-important current revenue.

Ideally, there is a consensus within the partnership of the firm as to the firm’s most important clients at any given time, because servicing those clients in a way that keeps them happy is usually the single most important contributor to the firm’s continued viability. While the list of most important clients may sometimes be in flux, it is important for at least a general awareness to exist within the firm as to which clients are worthy of the most attention at any given point. It is a given that those clients will be familiar to the lawyers working on their matters, but some consideration should also go towards making sure that key staff members are aware of which clients are at the top of the firm’s list.

Individual lawyers should also be aware of their personal “Big 5,” or the clients whose work is currently allowing them to contribute financially to the firm. This awareness is important, regardless of which career stage lawyers find themselves in. (Likewise, it is important to note changes in the makeup of your personal client “roster” over time, and the relative importance of each individual client on your list.) The reason why this information is so important is a simple one: as lawyers, with finite amounts of time to “sell,” every hour spent on one client’s work represents an opportunity cost of sorts. Accordingly, it is important to have a characterization of the relative value of each client — both to the firm, and to the lawyer personally.

The importance of categorizing clients comes into focus when analyzing whether to keep on, or bring into the firm, a “difficult” client. Because of the opportunity cost inherent in spending hours working on matters for difficult clients — irrespective of whether they are “difficult” in terms of payment, demands, or general unpleasantness to deal with — it is vital to assess the true cost of working for such clients, in relation to their general importance to one’s practice. The judgment of whether a difficult client is “worth it” is best left to the attorney responsible for that client, since only they can see the full picture of the client’s worth relative to other clients of the firm. That is not to say that the input of partners, associates, or staff should be dismissed when it comes to addressing difficult clients — only that it is the responsibility of the lawyer most invested in the relationship to honestly assess the value of the client to the firm.

Ultimately, tolerance of a difficult client should be directly proportional to the opportunity for the firm presented by that client’s matters. This calculation needs to account for how closely the work being done (or contemplated) for the difficult client hews to the firm’s core competencies, or whether the work presents a large or unique opportunity that could result in either a reputational or financial windfall for the firm. It is also important to consider where the client fits within the firm’s “risk tolerance” and whether time spent servicing the client’s matters could be better used servicing other clients or chasing new business. In short, difficult clients can be good clients, if the work being done for them is high-profile or potentially lucrative, and is within the firm’s core competency. In order to make a good decision about how to handle clients, however, it is important to categorize them first, with an honest assessment of their actual or potential contribution to the firm’s professional and financial bottom line.


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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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