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Make Money Mondays: Diversify Your Client Portfolio

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If you’re not making the money you’d like, the most obvious solution is to find more clients. But before you start spending thousands of dollars on SEO, first take some time to think about what kinds of clients you need to find to create a sustainable practice.  This article by Morra Adams-Mele in Entrepreneur  breaks down five types of clients that are common to many service industries, including law.  They include:

  • Vanity clients – These are big name clients or cases that you can brag about and which give your firm credibility and lead to valuable referrals;
  • Long-term clients – The regulars who are either on a long-term retainer or come back year after year for annual tasks like corporate filings or IP audits – and if regular enough, can serve as a bread-and-butter stream of revenue for your firm;
  • High-margin clients – These clients who need work done NOW and pay well for the quick turn around;
  • Just-for-the-love clients. These are the so-called “passion project” clients – the ones who you represent because they have no other options or because their matter enables you to change the law or simply because they’re decent people.  The point is that you can use your law degree to help people who can’t afford it or to change the world and still remain sustainable so long as you build these passion projects into your business model.
  • Short-term clients.  These clients are the least desirable as they take time to onboard, pay for a small matter and aren’t heard from again. Still, for many firms, particularly those that advertise on line, short-term client revenue is too significant to ignore. And in a best case scenario, short-term clients can eventually become long term revenue sources either because they come back with new business or refer you to their friends.

It’s important to take the time to assess which of these baskets your clients fall into so that you can focus your marketing efforts on bringing in clients who will diversify your firm’s portfolio. For example, if 95 percent of your clients are short-term clients, an SEO campaign will simply deliver more of the same — when it’s probably wiser to balance those short timers with repeat business. Below are some different approaches to diversifying your business to make it more sustainable and fulfilling:

  • If you enjoy the quick turnaround that high-margin clients provided, you might change your marketing pitch to emphasize your ability to handle matters quickly. Or you could reach out to referral sources and invite them to send those types of cases to you if they don’t have time to handle them.
  • Too many short-term clients? Why not consider some of these ideas that can help your clients stick around longer?
  • Did you go overboard in biting off more pro bono matters than you can handle? Consider whether these options for helping clients find money to fund their cases can help you get paid. Or if a client is seeking legislative or regulatory reform, why not look to see if there are other similar clients who might get behind the cause and fund it, or if other law firms could help shoulder the work.

 

Illustration courtesy of Shutterstock

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