Biglaw

Biglaw Firm Only Wants Big $$$ Clients

Which Biglaw firm wants attorneys to "reduce the burden" of small clients... within 30 days?

By Kathryn Rubino on May 27, 2015 3:17 pm

BRYAN CAVE — MEMORANDUM — SMALL CLIENT REVIEW

Late last year and earlier this year, we conducted a preliminary review of our client population to begin a process of identifying which of our clients are profitable and present growth opportunities, and conversely which are not profitable and do not appear to present growth opportunities.  Not surprisingly, what we learned is that substantial clients have proven to be significantly more profitable to the Firm than consistently small clients. Specifically, between 2009 and 2013, approximately 75% of our new clients generated less than $20,000 per year in fees.  These new clients had overall margin averaging -29% and realization of 76%. Collectively, they represented only 2% of our total collections over a 5-year period and just 2.6% of total hours worked by the Firm.  Many of these small clients presented a variety of additional challenges, including collection challenges, some conflicts that prevented us from accepting clients with far greater revenue potential, a disproportionate burden on our administrative staff and on occasion liability risks for the Firm.

One of the outgrowths of the Strategic Plan is an expectation that we will focus more energy on our clients that present the best opportunities for growth into substantial and enduring relationships.  Our strategy is ultimately to have a greater number of substantial relationships and fewer relationships that do not present the kinds of growth opportunities we seek.  In order to accomplish our goal in this regard, and in view of the results of the small client analysis, we are asking all of our lawyers to think about and identify which of their existing smaller clients present realistic opportunities for substantial growth, and conversely, which do not.

Our goal is to eliminate from our roster those very small clients who have not grown for a 3-year period, and who appear unlikely to present opportunities consistent with our strategic objectives.  We are beginning this process with a subset of the clients identified above – those clients who have been with us for at least 3 years and who generated fees of less than $5000 in 2014 and less than $10,000 in each of 2012 and 2013.  There are 1300 such clients on the books, excluding estate planning clients, who are not being included in this exercise.

If you have small clients on this list, you will be receiving shortly an email from the Management Committee.  Please review the clients identified.  If they do not present growth opportunities consistent with our strategic objectives please take steps to terminate the client relationship.  We realize there may be small clients for whom there are growth opportunities despite falling into this category over the last three-year period.  If you believe this is the case, please send an email to Frank Wolff or Dennis Fleischmann explaining who the client is and why you think they present strategic opportunities for the Firm.

Representation of small clients who do not present growth opportunities does not improve our financial performance.   Please help us to reduce the burden presented by carrying so many small clients by following the instructions outlined above within the next 30 days.  I also hope you will begin to think at intake about whether potential new clients are presenting you and the Firm with an opportunity that will advance the goals of our strategic plan, or whether you should suggest that the matter be handled elsewhere.   If we continue to spread our efforts among so many clients, we will diminish our ability to have the impact we want on those we could genuinely grow.

Thank you in advance for your assistance.

Terry

Therese Pritchard
Chair of the Firm

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