What’s the Real Issue: Not Enough Staff or Too Many Clients?


After just emerging from yet another tough deadline, many of you may be asking yourself this question.  While I am sure that most firms would love a few more qualified and fully trained people on hand at busy times of the year, this is an extremely tall order.  That leaves you to consider the volume of clients you are serving at certain times of the year.

Most of our firms were not built to be high-volume low dollar operations.  Rather, we built our firms to deliver a higher level of service to a targeted population of people who appreciated and valued out service.  But something happened along the way – and we welcomed too many clients outside of our original scope of vision.  Or perhaps we never had a scope to begin with.  The thinking along the way was probably “all growth is good growth.”

But, with the worsening workload compression happening in our industry, our firms are literally being pushed to the breaking point at several times throughout the year.  And, it’s not the “A” clients that are bringing us to our knees, rather it is the higher volume of small clients that are usually the culprit.  Despite our best efforts at hiring temporary labor, interns, and using overtime, it seems we can barely keep the wheels on the tracks some weeks.  Nobody wants to live like this.  Not you, your partners and certainly not your staff.

If you are serious about culling your client roster, remember the 80/20 rule.  That is, 20% of your clients generate 80% of your revenue.  These 20% are the clients that you originally started your practice to serve – they welcome your ideas, buy additional services, respect your advice, pay your bills, and refer you to their friends.  They also make up the vast majority of your revenue and profitability.  But when you are pulling your hair out several times a year dealing with hundreds of $500 tax returns you simply cannot serve the “A” clients like you should be.

So, start by creating a ranking of your clients by fee – lowest first.  I realize that not all small clients are “D” clients, but this is an easy way to start the process.  Now, cross-reference the small client list by realization.  This is getting you closer to your “D” client list, but there is more to consider.  Now cross-reference this list mentally by those known to be difficult, fee sensitive, slow-pay, chronically late, and needy but unwilling to pay for it.  You may also mentally apply some other filters such as probability of referrals, circle of influence, and more that can give you pause – and in fact – keep a small client with low realization off the forced attrition list.  Start by targeting 5% forced attrition of clients as a percent of your total clients, knowing that some go as high as 10%.

Now that you have a solid list of true “D” clients, you need to decide how you will separate yourself from these clients.  Most of the time long-time relationships prohibit a simple form letter approach so you will need to be creative here – remembering that one size does not fit all.

I’ll give you a few weeks to rest, recuperate and build your list.  Then I’ll be back in early November with some advice on how to fire the clients that are most likely bringing you and your firm to its knees several times per year.

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