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CPA Advisory Services

Let it go – When firms must fire clients

Jason Blumer  Blumer & Associates, CPAs

Jason Blumer  Blumer & Associates, CPAs

This is article is about the part of firm leadership we all dread: the inevitable need to fire clients or release them to go be successful elsewhere. Though this is difficult for us, it is a part of our work as leaders of firms. Leaders who are proactive about firing clients or releasing clients to go be successful elsewhere are caring about their clients and making their firms better at the same time. How so?

  1. It is an ultimate act of caring when we want what is best for our clients – even if we’ve realized that they can be more successful in another firm. This makes us feel awful, like we’ve failed these clients in some way. When, in reality, no firm is ever meant to be all things to every client.
  2. It’s also good for a leader to take clients out of the firm who are not using the firm’s resources and value to its fullest potential. Your firm and team’s capacity are limited, and wise leaders will recognize this truth and guard that capacity and their team fiercely from clients who are unable or unwilling to absorb the amazing value you are creating.

We have a client right now that is seemingly not a good fit for our firm. We’ve put it off and tried to serve them well. Each year that we renew we are fooling ourselves thinking they are right for our firm. It’s not all them. The way we serve means we seek to produce a lot of value for the price the client is paying us. But we’ve learned that the value we produce is higher than the amount of value this client can consume.

This is a truth in firm capacity management = value produced must equal the value consumed by the client.

If this is consistently out of balance, then the client relationship will erode over time. And the firm will become frustrated. In our example, we’ve attempted to teach, share, and give more and more value each year (for more money) to this client. But year after year, the client doesn’t understand us, won’t do what we say, and truly needs someone else to explain financial things to them in ways we just can’t seem to get across. There is an inevitable parting of ways coming.

As I mentioned, it could be the client who is not able to understand and realize what we are teaching them, or it could be that we are not the best firm for that client. Each firm has its own personality and is right for just the right client. There is a special match (called alignment) that firms should always be seeking with their clients. We aren’t just looking for clients, we’re looking for aligned clients. When you find them, you can tell. The relationship clicks and everyone is extremely happy to receive value in the exact way that the firm wants to give it. Watch out for relationships where your clients can’t (won’t) consume the value your firm consistently produces. And look at yourself as a firm – how do you produce value? Who are you best for? What is your ideal client profile?

This leads me to discuss the doors in your firm. There is a front door and a back door to your firm. The front door is the most strategic door, whereas the back door is not strategic at all. The front door is where you set up a relationship for maximum impact on both sides of the service, while the back door is used only because you have to. Few firms recognize the doors in their firms, and therefore they don’t use them well. The front door should remain closed at all times, and the firm leaders should be the ones opening the front door, asking questions about who wants to come in to the firm, and potentially stopping people from coming in. Many firms leave their front door wide open for any client to wander in. This puts the client in charge – a poor way to begin an expert service relationship. It is a sign of firm wisdom for leaders to chain the front door, peek out and ask “who is it?” when a potential client knocks. Leaders who are good at the assessment of a ‘right’ client and keeping the wrong clients out of the firm build exciting valuable fun firms to work in and lead!

The back door on the other hand is used when it’s time to end a relationship or fire clients. As painful as this can be, this door must be used from time to time because none of us are perfect at assessing a right client fit (or a right team fit for that matter). We will get that wrong at times, and the back door must be used so that the client can be released to go be successful elsewhere. Assisting a client out the back door is a recognition that it is hard for a client to leave your firm. Changing accounting/tax firms is difficult to do for a client. They have such intimate things in your firm – it’s hard on them and you must help them when they are being resistant to going elsewhere to receive better service. But you can help by gently having the right conversations that force them to realize the value they are receiving or are not receiving. Bold wise leaders end relationships with care and assist a client to their next great adventure… without us.

It’s time to step up our leadership in firms all over the world, and choose to end relationships with clients for their good, and not only for us. Money isn’t everything, it’s just an indicator of our value. And when our service gets out of balance with the wrong client, our revenue becomes unwise revenue. There is so much more to our value in service to clients than just money – the joy of a team that loves their work and wants to grow as people, servant assistance to clients willing and able to grow into different people, and organizations that become loving places of accountability and safe transparent places of care. Let’s commit to that type of new world. Don’t stay in relationships that hurt you and your clients. Fire clients to go be served better elsewhere when necessary.

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