Firing Clients the Right Way

Source: CPA Practice Management Forum

Most firms have clients that they'd be better off without. The cost of keeping these clients – in terms of money, resources, and stress – doesn't justify the benefits. According to consultant Hugh Duffy, the three main reasons to fire a client are:

1. The client consumes too much nonbillable time.
2. The client withholds information or asks you to do something unethical.
3. The client doesn't want your help.

Whatever the reason, if you decide to fire a client, it's important to keep a cool head and consider the process carefully. Duffy offers several tips, including:

• Meet with the client face-to-face – don't do it via email. If a letter is required for legal reasons, meet in person first, if permissible.
• Keep the conversation professional and explain the reasons for severing the relationship. It's important to treat the client with respect, particularly if it's someone you like or will see in social settings. Assure the client that you'll keep the matter confidential. Follow up with a letter.
• If the client posts negative comments on social media sites, resist the temptation to reciprocate. If necessary, ease the concerns of your colleagues or other clients privately via email or a letter, and consult an attorney for guidance.
• If you're shifting the focus of your practice – to a specialty niche, for example – consider selling the portion of the practice you're giving up, rather than severing client relationships.

For the complete article, read “How to Fire a Client.”

From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, January 2012, p. 7.