Monday, February 28, 2011

Client worry vs. Client planning

Can we all agree that usually when someone needs the services of an attorney that that represents a bad day in their life?  A buddy in my church group owns a small business and received a letter from the IRS to audit him, his wife, and business for 2008.  I met him for lunch a week after and he didn’t eat a bite of his food, looked completely freaked out, and assumed the worst.

He told me that he did his taxes using software and that his records from 2008 and earlier were lost when his computer crashed.  He called a friend of a friend who does tax law.  The attorney told him that he handles audits all of the time, knows how to talk with the auditors, and that this should be resolved in a couple of weeks.  The attorney apparently didn’t ask many questions, he “had seen this a thousand times”.  Without knowing better, he went with the attorney.

3 months later the audit had expanded into the year prior and the year after and all he had was a large recurring bill to show for it.

Over the holidays, we had he and his wife over and he had lost weight and his wife said that she wanted him to see a doctor to be treated for depression.  They were all scared and he said that his attorney was a nice guy but he was falling apart. The attorney would ask for what the IRS was asking for.  He would give the information and they would keep asking for more.  The attorney had no luck “nuancing” the IRS. No plan, just death by a thousand paper cuts.  It was simply tragic.

I saw him last week and he was a changed man.  He settled on a much lower fee, about 50%, than he was billed by the attorney and terminated the relationship, changed to a tax attorney that I had placed and referred him to, and brought the audit to a close.  Paid a few bucks, but not as much as he had feared.

The difference.  A meeting with our pastor who told him it was time to, “stop worrying, and start planning.”  Where the first attorney facilitated just enough worry to keep the process going and bill for every minute of it, the second attorney asked a lot of questions and laid out a roadmap. What to expect, more likely timeline, and to get all of the information instead of little by little.  He took control of the process instead of letting the process control him.  No nuance, no games, full disclosure.

I share this for 2 reasons:

  1. The first attorney billed a lot of hours that were never collected on.  Would that time have been better spent developing clients, spending time with family, or any other thing?  Multiply that by other clients and that is a lot of wasted time and money.
  2. Attorneys tell me that 85-90% of their business comes from referrals.  People statistically will  tell 3 people of a positive experience and 11 of a negative.  Not only did the attorney lose a client and any chance of referral, they have someone that will probably actively dissuade others from using them.
Ironically, my buddy probably ended up paying the IRS the same either way.  He also paid his attorney bill, wrote a reference on the attorneys LinkedIn page, and referred a couple of other small business owners to him.

Do you facilitate worry, or do you facilitate a plan? Which one do you believe is best for your client and your bill to collection ratio?

Would you rather have several clients that you have to resell your work to and justify your billing only to get half, and no referrals, or clients that actively help you secure new business?

If you are interested in learning how other attorneys have created a repeatable process that helps facilitate a plan for their clients, increase their collection rate, and increase their referral base, feel free to contact me at:, 850-893-8984