Gale Crosley
Crosley + Associates
Atlanta, GA

Once in a while I cannot help playing contrarian. But I only do so when going against the grain is my conviction, not just for the sake of taking the other side! In my consulting practice, clients’ frequently express a desire to “fire their C clients.” I, on the contrary, suggest another approach.

Fundamentally, I agree with the premise that “upleveling” the quality of a firm’s clients “uplevels” overall margin. I question, however, whether getting rid of lesser performing clients is a means to that end. In fact, I suggest that properly managing them can have the opposite effect.

Often, C clients are systematically pruned from a partner’s book of business to free firm principals to develop more remunerative clients. This scenario assumes that partners have the tools and motivation to successfully pursue new opportunities. Getting rid of the lesser clients relieves partners of the frustration that they cannot seek new business because they lack the time. But some partners worry that turning away any client could begin to erode one’s entire book of business. Both positions have merit.

I contend that partners intent on business building have no reason to give up C clients. Rather, with the right strategy, they can turn them into valuable assets.

Instead of giving up clients, reassign them. If your partner group agrees, establish a selection process that includes objective criteria and also considers your subjective viewpoint. Each partner reviews her or his own list, with a strategic eye to which clients might be offered to trusted managers and seniors in the firm.

Relax. You’re not turning these clients over with the expectation that relationships and revenue will magically ensue. You are entrusting your subordinates with stewardship. As well as clearing the way for you to pursue other, high-value clients, this exercise also creates an in-house training ground. That’s one of its biggest advantages. Once your seniors and managers cut their teeth on the problem clients, they are in a position to take on more relationship management responsibility with more valued clients.

As you know, creating rainmakers is a difficult business. Many managers complain that they dutifully attend seminars on business-building, but rarely get the chance to practice what they’ve learned. By transferring C clients, you set up an environment where valuable learning can take place with relatively low risk. But keep in mind that this learning will not occur without your input. Your mentoring and monitoring are required for success.

Once per quarter, or as often as you deem necessary, sit with the client and the manager to whom you’ve given the account to review progress and anticipate challenges. Relationship management should be one of your strengths, and it’s one of the most valuable lessons you can teach.

How do you communicate this changing of the guard to the affected clients? One approach is to explain to the client that your firm has adopted a team approach, under which the associate will become more heavily involved. If appropriate, suggest that, upon your retirement, the associate may one day have full responsibility for the client. If you get significant “pushback,” you may need to reconsider the wisdom of giving up this particular client.

Finally, what do you do if your designee leaves the firm? Your first step is to get on the phone or in front of the clients you have transferred in order to get them back before Joe carries them off to his new firm. But think carefully about this. If you were once willing to “toss out” this client anyway, carefully consider how much you want it back. Also, remember that by controlling the number of clients you transfer, you can help control any possible erosion if your associate leaves.

Among partners in CPA firms, a perennial question is “Should I do the work myself or delegate?” The more you learn about what can be delegated, and the various benefits that can accrue, the more leadership and leverage you develop. And that’s what business development is all about.
Copyright ® 2003 by Crosley + Company

Gale Crosley, CPA, is founder and principal of Crosley + Company, providing revenue growth consulting and coaching to CPA firms. She brings more than 30 years of experience, featuring a unique combination as a practicing CPA in two national accounting firms, along with significant experience in business development in the cutting edge technology environment, with such firms as IBM and MCI. For more information, contact her at [email protected].

Gale Crosley
John Borrowman