Law Firm Marketing: Firing Your Toxic Clients

Given that we are still neck deep in the worst recession the U.S. has seen since the 1930's, you may think I'm a bit off the wall when you read what comes next. Drop your bad clients. Do it now. Identify them, confirm your facts and give them a nice wave goodbye. You heard me correctly; there is no better time than today for your law firm to shed clients that you should not be working with.

But John, this is not the right time for this. Look what's going on around us - stores are closing, there are unemployed lawyers out there, competition is fierce...

So what? This is completely irrelevant. More often than not, toxic clients (as defined below) cost you money - they do not make you money. Most lawyers do not realize this because they have not analyzed the numbers and mix bad clients into the batter with quality clients.

What is a toxic client? For starters, let's go with one that doesn't pay on time, or doesn't pay at all. Hey, don't get me wrong, if you have the ways and means to represent a client pro bono, by all means do some good for society. However, if a client has agreed to an hourly rate and is not paying you within a reasonable timeframe you should stop catering to this client. Not doing so will result in a different type of representation, one that an accountant I know likes to refer to as "pro bonehead."

A plaintiff's trial firm, working on contingency, can't have a bad client, right? Wrong. A bad client can be one who nags your firm incessently for the settlement check, consuming hours of resource time. If you can't set up the proper protocols to handle them, get rid of them. Having your secretary spend 3 hours on the phone discussing when the settlement check is coming is not productive).

A toxic client in this type of firm can also be one that is not financially profitable. If you handle small value personal injury law cases / no-fault and you do not have an efficient method of processing them, your firm can be losing money on this type of client. That's right - half of your law firm's cases may be covering up the bad business practices represented by the other half. You may be going through the motion on every $8,500 settlement that you think contributes to the bottom line, when the $560,000 settlement is paying a majority of your bills and costing considerably less in time and effort. Get an accountant or financial analyst type to look at your books, see which types of clients are profitable for your firm and which are not and stop taking on the ones that do not make financial sense. Adjust your marketing strategy and messaging to acquire the types of new client leads that represent profitable opportunities.

Here are a few categories of toxic law firm clients that you should consider firing when they cross the line:

- The non-payer / late payer
- The resource time waster
- The unprofitable client
- The litigious client (the reason professional liability insurance for lawyers was invented)

Now, take the extra time you have freed up and shift it to giving better service to your existing clients, networking, or strategizing on new marketing ideas. I guarantee that shedding these toxic clients will have a profound positive impact on the health of your law firm and possibly even on your general mental health.

Using Social Media to Generate New Law Firm Leads

I have a problem with most Social Media "experts" today. Despite the fact that most know the ins and outs of Facebook, Linkedin and Twitter and every technological widget associated with these services, what really baffles me is that a wide majority of them don't TRULY GET social networking as a marketing vehicle.

Social networking is not about geting 20,000 followers to make yourself look popular, only to have 97% of your network tune you out 99% of the time. Social networking is not about flagrantly promoting one's own services, under the guise of information distributor. If you are really looking to be tuned out by a large group of recipients, you already have SPAM e-mail and non customer centric e-newsletters that are equally ineffective.

Social networking is about building, or developing real and meaningful relationships with clients, colleagues, friends, or individuals of similar interests and affiliations.

Is anyone truly interested in being part of your Smith, Jones & Doe LLP Facebook group? I argue that few are. What they do care about is the photo album from Italy that their cousin posted. They also want to know which of their old college buddies saw the movie The Hangover. Comprende? While LinkedIn is more oriented to a professional community, the formula to using any social network successfully for business purposes is the same.

ONLINE SOCIAL NETWORKING = FACE TO FACE NETWORKING + EFFICIENCY

You have to do the same things you do in real networking. You cannot expect that you will plant yourself on top of a pyramid and everyone will bow to you and buy what you are selling. Listen to your network. Connect with people 1 to 1. Learn their needs, their problems, seek to solve someone's problem and you may find that your own challenge is alleviated.

Do you have a valuable service? Don't shout about it incessently. Instead, let a friend or colleague introduce you to their network as someone they trust (by now, everyone knows that a trusted testimonial is worth 100 self serving ads). Give people something of real value. If you are a lawyer, tell your friends that you will answer their colleagues' legal questions that are sent to you via a social network for free.

There are many ways to use social networks effectively that do not involve self-serving mass marketing. Always ask yourself how you can contribute to your social network, rather than how to sell those in your social network and success will come your way.