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Business Law: Profiles of the Top 5 Problem Clients



A key factor in getting paid by your clients is taking on the right clients to begin with. Yet, even assuming you’ve figured out your target market and what you can provide, there emerges that indispensable factor in client – and indeed all – relationships: gut instinct. What does your gut tell you when you’re dealing with potential clients?

You’ve probably had an experience in other contexts, like a holiday mixer: you’re admiring the platter of yellow-hued cheese cubes, a Chardonnay in hand, when “Jim Doakes” starts talking your ear off about his angel investments and how he sold his company for lots of money, yet when you ask questions, he gives you answers full of smoke and jargon . . . and you get “The Knot” in your stomach that tells you something isn’t quite right and that it’s time to find the friends you arrived with, the bathroom, the exit – anyplace before he asks for your number.

You don’t hesitate to extricate yourself when you sense that warning signal, so why should you hesitate in business? The Knot is a crucial tool that you can use for business use, too. The Knot is usually smothered under the weight of “I need the business” and “If I turn this client away, another one will never come to my door”, so it is hard to hear and feel. But if you listen carefully, it will help you avoid over-rationalizing the behavior of a troublemaker.

So at the “holiday mixer” of client life, who are the celebrity guests you can expect to encounter?

  1. Petula(nt) Clark. From the moment you meet Petula(nt), you sense something’s off. Maybe it’s the way her right upper lip seems to curl into a sneer. Maybe it’s the way she dispenses with the niceties of conversation and the “getting-to-know-you” process and jumps right into the numbers: what do you charge? When do you expect payment? “I need a deal”, she states. “And I don’t overpay”, she adds, her eyes narrowing. Did you see her pursed lips tighten when you mentioned your collection and stop-work policy on outstanding invoices? Be wary of Petula(nt). She can turn downright nasty when she gets your bill, demeaning your abilities and pushing you around . . . all for the sake of a price reduction. “I can’t believe you charged me s-o-o-o much just to do that little thing! Didn’t I tell you I wasn’t going to overpay?”
  2. Monty (“Let’s Make a Deal”) Hall. Monty’s always on the lookout for a deal. He’ll try every angle to reduce the cost of your services or products, demanding volume discounts and referral fees (or freebies) on other customers he sends your way. You may present him with a corporate identity “package”, for example, including market research, graphic design elements, and branding counsel. But Monty will start to chip away at the package. “That all sounds great. I love what you’ll be able to do for me. But . . . could I do the graphic design without the research? Do I absolutely have to do the branding counsel now? What would you charge if I didn’t do all three at once?” Tread carefully, here: Monty is basically asking you to bake him a cake without using sugar. Chances are, the experience could leave a bad taste in both your mouths.
  3. Sam(pler) Cooke. Sam is a smooth-talking charmer. Sam comes across as highly intelligent and knowledgeable, both in general, and about the issue that brought him to you. He makes you feel like the brightest, most competent person in your field. And Sam tells you how much faith he has in your ability to do the job right . . . unlike all those other bums who couldn’t do so and how he had to tell them how to do their job. By the time Sam gets to that tidbit of information, however, you’ve already convinced yourself what idiots the others were and how you’ll show Sam your best work . . . and dreams of sugarplums and eternally-grateful, high-paying clients dance in your head. What Sam generally won’t divulge is how he didn’t pay those “bums” . . . and how he probably won’t pay you, either.
  4. Rush (Job) Limbaugh. Rush is true to his name – always in a chronic state of “last-minute-ness”. He comes to you with a deadline. A deadline that’s big, ugly, and urgent. Possibly because he has gotten himself into a real mess. You’ll need to put in a lot of hours in a very short period of time. You’ll need to push other clients to the side. You’re happy to take on the challenge – after all, it’s an interesting, meaty assignment — and you can feel the surge of adrenaline coursing through your veins as you contemplate the work. But Rush is in such a rush that he can’t focus on what you’re telling him about your projected fees, or that, perhaps, you require an advance payment for “rush jobs”, or need him to sign off on the scope of work. You may also find that Rush often changes his mind about what he wants or needs, which could explain why he’s often up against deadlines. “Yes, yes – of course I’ll messenger the check for the fee advance”, he reassures you . . . “but you’ll start work in the meantime, yes?” Don’t be surprised if the check doesn’t arrive, or if his lack of focus at inception is yet another chronic condition.
  5. Sylvester StallOne (month before payment). Sly is a likeable sort. He likes things simple and casual. In other words, not in writing. After all, his word is his bond, and he’s always done business with you. Sly seems successful, so you figure the handshake deals must have worked for him . . . and actually, you’re both envious and curious as to how, because you’ve been burned by them in the past. You present him with your writen standard terms, to which he’ll respond, “Hey – I’m a decent guy doing business honorably. I don’t want to have to spend money on a lawyer to review this. I work honestly and straightforwardly with everyone I do business with. Let’s just make money, OK?” And you’re tempted to (or do say), “OK”. But without your understanding in writing, you’re left with a “he said/she said” situation – particularly when it comes Sly owing you money. All of a sudden, you find that this amiable guy, who seemed to be so trustworthy, is 60 days, 90 days, 120 days late in paying you.

So listen to the “The Knot”” when it whispers to you about credibility of these “cocktail party guests”. Could you have seen them coming to avoid them altogether? Sometimes you do; sometimes you don’t. Not to say you should never, ever take on these “celebrity” clients, but be aware that you may get more of a headache than you bargained for. Be sure to have your terms in writing, and make doubly sure that they have signed off on them before you start work! Or, at the very least, keep them on a short leash.

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