Tax Practice Pointer: Selecting the Right Client

Gray Reed
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Gray Reed

Clients come from many sources.  Most of our practices deal with clients who are having problems with the IRS.  These problems can range from a simple audit to serious criminal problems.  The first two things that come to mind are 1) who do we want for our clients and 2) how do we select clients who will follow our advice?

If you do not have good clients, you will have a slow, boring and ultimately unprofitable practice.  When you have the right clients, the practice of tax law is exciting, invigorating and profitable.

Referral Networks

While many clients come from referral sources, some also come from other places.  When a potential client calls, you should ask, “Did someone refer you to us?”  You want to know if this person comes from a good referral source.  If the person is not from a referral, then you should ask how the person got your name.  Some potential just clients search the internet.  The best source is a referral. Referred clients also mean that they have been pre-screened as to their history of paying their bills.

Every professional has a marketing plan.  “Word of mouth” or referrals should be placed at the very top, meaning that this results in the highest level of client and the most interesting type of case.  Do good work and you will get more referrals.

Asking for referrals is a good way to get new clients.  Let others know about your practice and what you do.  Do not be afraid of letting people know about you and your practice.  Say thank you.  Everyone appreciates a simple thank you note or letter for a referral.  Talk to the referral source.  Often, if they referred the client, they want to know that the transition is done properly.

It is also important for you to develop your own body of referrals.  Sooner or later, you will be conflicted.  You will have cases that you do not have time for, or that you know someone else can handle better.  Refer those cases.  Do not hang on to them.

New Client Considerations

First, we want to conduct a high-quality practice and be compensated for our work.  There are many clients who would like for us to work for free.  Know the type of person you want for a client.  If, for example, you specialize in tax controversy matters, you want clients who are having problems with the IRS.  Do not take a matter outside of your expertise.  Here is how to handle a potential new client:

  1. Screen all potential clients by telephone.
  2. Determine how the potential client got your name.
  3. Determine if the potential client has a tax problem.
  4. Do not give advice to persons who are not clients.
  5. Advise the client how you work with new clients.
  6. Schedule an appointment.
  7. Have the client fill out the New Client Information Sheet. There are several matters that you should go over with the client during the initial interview:
    • Name of your CPA or accountant.
    • Who Referred You to Us.  It is almost always best to decline a client that has changed professionals often.  It is also always best to walk away from a client with unfulfillable expectations.
    • List Other Attorneys or Persons You Have Consulted Concerning This Matter. When a potential client comes in for the initial client meeting, it presents a situation of not only whether the potential client wants to retain us, but also more importantly, whether we want this person as a client.
    • Briefly Describe the Legal Matter About Which You Are Consulting Us.
    • Explain What Result You Want and Expect If We Represent You.  Knowing what the client expects is essential.  If the client expects a result that is unreasonable, then this is probably not the client for you.
    • Get a retainer for the work you are going to perform.  A client who is not willing to give you a retainer either cannot pay or most likely will not pay in the future.

The main thing to look out for with new clients is your initial reaction to them from the first phone call and when you have your initial meeting.  If you do not have a good feeling about the client, then it is best to decline representation.

REMEMBER:  It is not the clients you get rid of that will hurt you, it is the bad ones you keep.

If a client tries to negotiate the fee, other than questioning hourly versus one-time fee, it is usually better to walk away.

Communicate with the client.  The number one complaint about professionals is that we do not communicate.

The first rule of accepting new clients is that it is sometimes best not to take certain new clients.  Remember that a vast majority of problems in your practice can come from very few clients.  In many cases, the clients you do not take could be the best clients you never had.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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