Fed up after one too many stressful phone calls from unreasonably demanding clients, Trevor Choy decided to implement into his firm a strict "referral only" policy for taking on new clients.
Choy is the founder of Melbourne specialist IP and trade mark firm Choy Lawyers and he explained that the firm now only takes on new clients referred by existing clients, or through personal and professional contacts.
He said a key advantage of this policy is that incoming clients have a clear understanding of how the firm operates and the expectations of the firm and the client are properly aligned.
"When you refer someone ... you give them a bit of an introduction. That introduction is really, really valuable because it will often set the scene, so we won't get demands to do things that we aren't good at doing or don't know how to do," he explained. "So we find that when these people come through there's already some degree of rapport because of the mutual connection, and it becomes easier to deal with them. It's like dealing with a friend of a friend."
Choy said that a key reason for the policy was a desire to streamline the firm's client base so it comprised only high quality, valuable clients. At the outset, he explained, this involved analysing the firm's existing clients and cutting those that didn't fit the bill.
"There are clients you handle where you just don't want to pick up the phone call - people who don't appreciate the work, people who don't pay the bill and people who are unreasonably demanding. Every practitioner faces that and we weren't exceptions," he said. "So I sat down and categorised clients in terms of how we felt about them .... And then I wrote to the C and D clients and said 'Look, I'm sorry but we really can't act for you'."
He said paring down the client base was a nine-month process, beginning in March 2008. It involved finding the C and D-rated clients alternative advisors and transitioning them across and explaining to the remaining A and B clients the firm's new policy.
"Part of the reason for doing that was to explain [to the existing A and B clients] the benefit - that we'd have a lot more time to actually concentrate on their stuff, faster turnaround times, if appropriate, and also to lay down expectations - that this is why they remained as clients," he said. "I think if you tell someone why you value the relationship you have with them it remains in their mind... so I thought that was really important to outline."
Choy had predicted - and budgeted for - a short-term downturn in workflows as a result of downsizing the firm's client base, however he said the policy unexpectedly resulted in greater workflows from remaining clients.
"I was allowing for a decrease in revenues. I thought there would be a decrease for at least six months, and then maybe we would go back to normal," he explained. "But the funny thing was, we had a number of clients who had held off giving us all of their work ... and the moment they heard we were referral only they ended up giving us all of their work. So the workload actually didn't dip for more than two or three weeks."
Choy said he believes that introducing the policy gave existing clients concrete evidence that the firm would provide high levels of service.
"This is a very, very compelling way of explaining to someone that service level is going to be maintained at a good level, because if you're going to have fewer clients, and little to no difficult clients, then surely service has to be maintained to at least the same level - if not improved. So I think it gave them confidence," he said.
"We could go out and say 'Our service is the best, we're a client-focused firm' like every firm does. But how do you prove it? You can either demonstrate it - which is one thing we were trying to do already - or you have to give them a really, really good reason that shows them why you are the best. And this was a very obvious answer."
- Zoe Lyon
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