Difficult Clients – Don’t Let Them Ruin Your Practice
Difficult clients. We have all had them or encountered them. They are not always apparent from initial contact or the first meeting but they generally make themselves known fairly early into the relationship.
At first, the red flag might be subtle; the client has a question regarding your invoice. Harmless enough… next it is a question regarding case strategy which you thought had been clearly understood and agreed to months earlier… then an adverse decision comes out and everything you have done on the case is in question!!! YIKES!!! What should you do?? Call ALPS??? Yes, but there are practical solutions you can implement today, in your everyday practice to help you and your firm to avoid this scenario. Today is your lucky day.
The easiest way to avoid difficult clients is early at CLIENT INTAKE. I would estimate that 75% or more of difficult clients will present warning signs or red flags when they walk in for your first meeting or by the end of your initial consultation. What are they:
- You are not the first lawyer on their case. You are #2, #3 , even #4. Yes, of course, there can be reasons why the first lawyer legitimately resigned or was fired but typically it is because the client is difficult to work with, does not have a realistic valuation of their case, or has not paid their attorney, (liens already filed by the first attorney- ie you are not likely to be paid). Consider talking to the first lawyer before accepting the case, especially if the client says it was mutual or the client fired the first attorney.
- Statute of Limitation is about to run/another critical deadline is about to expire. Exactly why did the client wait until the last minute to come to you? They will almost certainly have a good explanation (just fired their prior attorney) and attorneys are natural problem solvers. We want to help and we think we can be the white night, coming in to save the day! We feel bad their last attorney was such an idiot/jerk/bad human who did not understand what they were going through… but we can certainly get this on track! We are super attorneys!! We are going to crush this!! Just stop for a minute and think before you charge full speed ahead. Do you really want to take a client with a statute of limitations that is about to run, without having appropriate time to review the file, or evaluate the case? Is this truly about helping the client or are you afraid of turning away a potential paying client even if your gut is telling you this is a huge mistake? If you do accept the case, will you be able to withdraw from representation if the case does not develop as initially anticipated? What if you lose contact with your client? I get so many calls that start with the phrase, “I knew I should not have taken this case”… so don’t! Trust your gut.
- The client cannot afford you. Having clear communications about the cost of your services is critical. A great client can quickly become a difficult client if they feel misled about the cost of a matter- particularly when the desired result is not achieved. It is amazing how clients and attorneys have such different memories of past events as soon as things start to get rocky. Be upfront and straightforward about your fees and the likely cost of the matter whether it is estate planning, litigation, or a domestic relations dispute. If your potential client is extremely concerned about your $400/hour fee and asks a lot of questions at your initial meeting about how long this will take and how quickly can this be accomplished, you should recognize you have a cost-conscious client. You may not be the right fit if there are other competent attorneys in your area who charge less and you would be comfortable referring them; consider referring them to 3 other attorneys or firms who might be a better fit. It might sound crazy to refer out a “paying client” but it does not do either of you any good for you to work hard and achieve a great result, only to have the client be upset because they have no way to pay you the $50,000 in fees they now owe you when they had an expectation, (right or wrong) that the most this matter would cost is $30,000. This will not end well for anyone. Better to be upfront right away, set clear expectations, and ask for a substantial retainer or refer out.
The second way to avoid difficult clients is through CONSISTENT COMMUNICATION AND BILLING. It is critical that you maintain regular communication with your client throughout the life of the case/matter; not just at the intake and the end. You may not believe you have time to do this but in reality, you cannot afford not to take the time. Your client should be involved in all major decisions. Every critical decision should be documented in writing, why it was critical, why the decision was made, and if it was against your advice. Clients do not remember conversations the same way we do when they receive an adverse outcome!
Document any limited scope of representation, such as that you do not provide tax advice or you do not file tax returns. If your client refuses to pay for an expert that you believe is necessary for the case — be sure to document that in the file, in writing. If the case does not go as expected, and your client says, “well if you had told me that this expert was crucial to winning our case, of course, I would have authorized this expense” – you do not have to rely on your word against your clients. You have a written record in your file documenting that you advised the client to retain this expert, you believed the expert was necessary and why, and the client made an informed decision and took the risk of proceeding to trial without the expert. For example, the client chose to take the stand and testify on the value of the home instead of hiring an expert appraiser to appraise the property and testify at trial. Documenting all critical decisions and why they were made at the time they are made can avoid future headaches and allow ALPS to defend you if your client makes a claim against you!
Disputes over fees are very common. It is not only about affordability but also clear and consistent billing. Send monthly invoices even if they are small. Your client will know you have been working on their case. By not sending bills, you might think the client will be happy because you are not “charging them”- yeah! But again, if there is an adverse outcome, the client may say, “My attorney did nothing on my case until the last minute before trial! No wonder we lost!” Sending monthly billing allows the client to appreciate you are working for them. Also, consider putting “no charge” for a phone call here and there… clients do not love seeing “.1” phone call- no answer… repeatedly on an invoice. Put yourself in the client’s shoes as you look at your pre-bill. How would you feel if you received this bill? Happy, because your attorney is working hard on your case, or annoyed because it appears nothing was accomplished this month but you still owe $500? Would a phone call to the client help explain why this work was necessary and things will be moving along soon? Talk to your client before undertaking a large research project/memorandum to get their buy-in to the case strategy. This consistent and respectful communication and billing will go a long way with your client.
The third way to avoid or handle difficult clients is to PREPARE AND ACT ACCORDINGLY. Some clients are just difficult. If you know that going into the relationship, and want to proceed anyway, document, document, document. Use a detailed retainer agreement that clearly identifies what is and is not within your scope of representation.
Obtain a large retainer upfront to avoid letting the client get behind on paying fees and require the replenishment of the retainer. Be prepared to withdraw if it is not replenished and act promptly. Alternatively, be prepared to waive the outstanding fees owed, because in the event of an adverse outcome, the outstanding fees will not be paid. Contrary to popular belief, outstanding fees are not good leverage to use against your client if they file a future malpractice claim.
Let’s face it, any client can become difficult under the right circumstances, particularly if the case does not proceed as anticipated. Today’s society always wants to blame someone whenever the desired result is not achieved but attorneys do not guarantee success for our clients. We do our best with the law and facts we are given.
By recognizing the early warning signs at the initial client meeting, using good client screening and intake procedures, clear and consistent communication/billing, solid file documentation, and withdrawing promptly when necessary, you can feel confident and not let a difficult client ruin your day and certainly not your practice. Have a great day!
Authored by: Kobi L Gibbs Senior Claims Attorney
Kobi L. Gibbs is a Senior Claims Attorney with ALPS Property & Casualty Insurance Company responsible for managing complex high exposure legal malpractice claims, coverage litigation, cyber and employment liability claims. Kobi has been with ALPS for 14 years and has conducted extensive risk management visits at law firms around the country. Kobi routinely presents to attorneys on professional liability risk management. Before joining ALPS, Kobi worked in private practice focusing on tax and estate planning and at the Yellowstone County Public Defender’s Office in Billings, Montana, where she tried felony criminal cases. Kobi received her Bachelor of Science in Economics with Honors from Montana State University in Bozeman, Montana and her Juris Doctorate and Certificate in Alternative Dispute Resolution from Willamette University College of Law in Salem, Oregon.