Mark Lee follows up his recent piece about threatening clients with a look at how such situations might be avoided.
Hindsight is a wonderful tool. So is your gut. How often have you had to deal with a troublesome client out of the blue? I’d bet that in most cases there were warning signs and that your instinct or gut picked up on these. But, nevertheless, you chose to take on the new client or to continue working for them.
A recent article on AccountingWEB was titled: What to do when a client threatens you? The advice it contained and many of the follow up comments related to real-life cases involving members of AccountingWEB. This article will be too late for many who have been threatened by clients. But I hope it will also attract comments as to what others have done when faced with potentially troublesome clients.
I don’t know when your gut starts to respond to potential problems. Perhaps it depends on previous client experiences. Or perhaps it’s simply a function of the difficult people you have encountered in life. Maybe it’s a combination of the two.
If you have limited client experience you may feel that your brain knows better than your gut. You want to be logical and rational. In the absence of overt evidence you have no reason to turn down a prospective client just because something doesn’t feel right. When you have more experience you will probably find this easier to do. You will be less concerned about missing out on some fees and more keen to avoid the hassle and frustration of resolving problems. Your instinct or gut may well be responding to stimuli of which you are not consciously aware.
Equally there will be times when what someone says or how they behave makes it all too easy to anticipate that a prospective client will become troublesome.
Factors to consider
The more of the following ‘PACK’ points that are exhibited when you first speak or meet with a prospective client, the more likely you will want to avoid taking them on:
- Past experiences: They tell you they have made negligence claims against more than one previous accountant; or they reference fee disputes with or poor performance by previous accountants
- Attitude: Are they rude, angry and disrespectful of your time and expertise? Are they edgy when you reference the anti-money laundering regulations; do they tell stories as to how they have cheated the system or otherwise undermine their own integrity and honesty
- Cash flow issues: Are they unwilling to pay anything upfront or to accept your normal terms? Do they have an excessive number of creditors in their business accounts?
- Know-all: They make clear they don’t want any advice. They claim to understand all salient tax rules so just want you to do exactly what they say with their information and expenses
There will also be occasions when it is after your first meeting or conversation that you realise someone is likely to become a troublesome client. They may not keep their word regarding making a payment on account; they may resist returning your formal engagement letter; or they may be unwilling to supply sufficient verification of their identity.
Once again, none of these by themselves is evidence that someone will be a problem. But if your gut puts two and two together and gets to five then you know what you should do.
Depending on the type of practice you are building you may want to avoid taking on anyone who exhibits any of the PACK qualities. Equally there is merit in taking on as clients those people who need help to get back on their feet. Their past experiences and cash flow issues may be a consequence of their behaviour or they may simply have been very unlucky.
If possible you want to remain objective so that you don’t get conned and only sympathise with those who deserve your support, not those who are to blame for their own misfortune. Of course it’s not easy to distinguish these issues, which is why I suggested the PACK acronym. The more boxes someone ticks, the more likely they are to become troublesome. If you reach this conclusion you are entitled to resist taking them on as clients.
Free initial meeting
Most accountants offer a free initial meeting. Some call it a consultation and some imply that they will give free actionable advice during this meet. I believe that’s a mistake. It’s just a meeting with two objectives. It should allow the prospect to decide whether they want to engage you; and, crucially it is also your opportunity to decide whether you want them as a client.
It’s a mistake to imply you will be giving free advice at this meeting, for at least two reasons:
1. It undervalues your advice. Giving free advice to someone before they become a client sends the wrong signals. Most accountants expect to be paid for advice given to clients. This becomes more difficult after you have given it away for free
2. It can lead to difficult confrontations if you are then unwilling to give the (implied) promised advice. You may have insufficient information, it may be too valuable to give away for free or you may have concluded that it would help the new client to commit an offence
So one way to avoid troublesome clients is to avoid promising to give anyone advice until after they have become clients. In this regard the anti-money laundering legislation can be your friend. You can point out that you are precluded from giving advice until you have complied with the related legislation.
The idea that we could trust our gut was poularised by Malcolm Gladwell in his book, Blink. Gladwell asserted that snap decisions could be better than decisions made slowly and with considered analysis.
Since the book was published in 2005, plenty of contrary views have been shared suggesting, for example, that only some (usually trivial) categories of decision are suited to being made without much thought. That may well be the case. But few people disagree that we have an innate ability to judge people by reference to our past experiences. For example, I have heard it said that interviews and appraisals often end up being nothing more than attempts by the interviewer to rearrange their prejudices.
There is, of course, a fundamental difference between employment-related meetings and your initial meeting with a prospective client. Your decisions in the former can be questioned by reference to employment and equality legislation. So far as I am aware however there is no law that obliges any of us to accept someone as a client if we would prefer not to do so.
Thanks but no thanks
Assuming you do not feel physically intimidated you could be honest with the person you have decided not to take on as a client.
Perhaps something like: “Thanks for calling/coming to see me but I’m not sure I will be able to do everything you need. It’s probably better that I pass on this occasion. Would you like me to recommend someone else who may be better placed to help you?”
In extreme cases you may fear for your safety if you ‘reject’ the prospective client. In such cases I would recommend you put a very high price on your services or resist saying anything likely to inflame the situation. After they have left you should then contact the police. You have the right to feel safe and no one has the right to intimidate you.
Mark Lee is consultant practice editor of AccountingWEB. He also facilitates The Inner Circle group for accountants, entertains as a conference speaker and is chairman of the Tax Advice Network of independent tax specialists providing help and support to smaller practices.
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