Focused - 17: Stop Digging

Episode Date: March 21, 2017

Not all clients are good clients. If you don't manage the herd, you could lose the farm. This is why it's important to consider the right time, and right way, to fire a client. We discuss fireable offenses both obvious and subtle, and the best approach to take when firing a client.

David Sparks and Jason Snell spent their careers working for the establishment. Then one day, they'd had enough. Now, they are independent workers, learning what it takes to succeed in the 21st century. They are free agents. Welcome back to Free Agents, a podcast about being an independent worker in a digital age. I'm David Sparks, and I'm joined by my fellow host, Mr. Jason Snell. Hello, Jason. Hi, David. How's it going? Excellent. Excellent. Today, we get to talk about swinging the axe.

Yeah, you know, I'm not going to get political, but I will just point out that if you make a name for yourself saying you're fired, who knows how far you'll go. I feel like so much of being a free agent is about psychology and fear and paranoia. It's like, am I going to have enough clients to keep this thing going? And I know not everybody listening to the show needs clients. A lot of people, like if you sell a product to the public, it doesn't work the same. But I know a lot of folks that listen to the show do have clients. A lot of people, like if you sell a product to the public, it doesn't work the same. But I know a lot of folks that listen to the show do have clients. And I've gone through these things. I mean, when I first started, I didn't want to say no to any client because this is an addictive lifestyle. I do not want to have to go back to a business and be an employee. So I need these clients to keep going. But sometimes they are more trouble than they're

worth. And I thought it'd be worth doing even just a little short show about how do you make those decisions and how do you go about dealing with the trouble clients? Yeah. And for me, you know, I don't have clients generally in the same way that you do, but I have some things that are similar to, I would say like I have ad networks that are similar to, I would say, like, I have ad networks that sell ads for me in various places, other relationships like that. And it goes for those two, anything where you've got a relationship, ongoing relationship with a, another business or person that isn't working out. And, you know, it comes to the breakup, right? It's not you, it's me, or sometimes it's them.

Yeah. Well, I just, I thought I'd start with, it's me. Or sometimes it's them. Yeah. I thought I'd start with a little war story. I had a client referred to me by an old friend. And so this person kind of came kind of like as a friends and family recommendation. So I wanted to take good care of this person for the sake of the person who referred her to me. And the first call I had, they were trying to get me to reduce prices for things that I was doing that I knew were going to take a significant amount of time. I made the mistake and the alarm bells were going off right away. When you start hearing that, when people are already not happy with pricing before you even do any work for them. And I went ahead and did it anyway.

And then when I did the work, I was very careful about making sure it was economical and within the budget that we discussed. And then after I sent the bill, they wanted a further reduction. And I got a little upset. And then I realized that the shame was on me, not the other person, because all the signs were there. I should have realized that the shame was on me, not the other person, because I, all the signs

were there. I should have known from the beginning and I actually ended up losing money doing work for this person because, you know, by the time you take into account all the nonsense and price reductions, uh, you, you actually ended up losing money. And it was just a reminder for me that, you know, as free agents, this stuff is really important. You know, failure to manage these clients or failure to manage the herd means you can lose the farm. You know, you take too many people that are going to be that kind of trouble for you, and you're going to be polishing your resume before you know it. So I thought we should talk a little bit about that. Yeah, it's subtly different from the art of saying no, but it is the art of saying not again. And again, sometimes we're talking about this in the context of having the luxury of having enough work that you can turn away bad work.

But I'll throw in the issue of not having availability, too, that if you take on – you're like oh well i don't i'm not maxed out i i have room in my schedule and then you take them on what you're what you're doing is turning away potentially somebody who's going to be a much better client who will come along and then you'll be full up so um again sometimes you take questionable clients because you feel like the work is some work is better than no, but you need to have a realistic view of what your time is worth and what your costs are worth because to your point, what you don't want to end up is basically saying,

I would have been better off not working than having done that work. And that is a situation you get to. Yeah, I used to have a standard statement. I fortunately have not needed it since I went independent, but when I was in the firm, you know, they took a lot more legal clients on because they had a lot more overhead to cover. Right. And occasionally you'd have somebody just didn't want to pay. And I used to, my standard speech was, look, I could either be with my kids or I could be working for you for free. Which one do you think

I want to do? You know, and, and I think you've got to kind of take that attitude whenever you get working with somebody that is taking advantage of you. And that's what's happening. And as a free agent, you're way more vulnerable. You're way more exposed because there isn't other people working at the firm to help cover the loss of that one. You can't place bets on 10 different clients figuring that 80% of them will pay, which is something that a firm could do, right? A firm could do that and be like, it's okay. We're managing the risk here. But as a free agent, you really can't do that. You don't have enough bandwidth to place all those bets, really. Yeah. So I think part of firing clients is not

taking on bad clients from the beginning and being aware of what are the warning signs for you. And I think every industry will be different, but if you're listening to the show, you do know where the troubles lie. So tell me, David, what are the fireable offenses? What are the things that will or should cause you to say, I don't think we should work together anymore? Well, I think't think we should work together anymore? Well, I think there's two different sets. There's the one at the beginning, and then there's before

you start the relationship. And I think that shouldn't be understated. I mean, when you're first, your first contact with a new client, there's a couple pieces of advice I'd give. The first is make clear that that interview is two ways. When someone comes to meet me and they're like, well, let's see if you'll be a good lawyer for me. I'm like, yeah, and I want to see if you'll be a good client for me. And I say that. I want them to understand that if I have the right to refuse your business as much as you have the right not to take mine. And I think that's helpful. And then just be very aware of the language that they use and the ideas. Like I said, this one that I just had recently,

the warning was there right from the beginning that they were going to be very frugal and not value what I was doing. They weren't putting the value on what I was doing that I think it was worth. And that's where I made the mistake. I should have said, oh, wait a second. I'm too expensive for you. Yeah. You know, you should go get somebody else and I wish you the best. And then everybody would have been happy. And I didn't do that.

The kind of work that I'm doing, this is a reasonable thing to charge. And if that's too much for you, then you should find somebody who you're going to be happy with. That's that turning around the negativity and viewing it from the other side, which is this isn't, oh God, you don't want to pay me. I don't want to work for you. It is, I'm, I'm not gonna, you're not going to be happy working with me because the way I work and what I charge, you're going to be, you know, you're going to think it's too much. And so we should not work together. Yeah. And even just like, I'm just saying like, I can't afford to do this at that value. Yeah.

I'm, you know, and, and just explain to them, you know, it's not nothing personal. Right. So that's one thing that people look at.

The other thing they're looking at is for attitudes. Like if you, no matter what service business you're in, if you've got somebody who says, yeah, I've hired four graphic designers and they were all idiots. I need you to come in and fix it for me. And guess what?

There are going to be five idiots and you're going to be the fifth. So get an idea of their history because if somebody is unhappy with every other vendor that's done this for them, they're ultimately going to be unhappy with you as well. It's that famous saying that if you're in a room, uh, and you don't know who the sucker is, it's you. It's a little bit like that where it's like, look, if, if, if every, if every designer or lawyer or whatever is the problem for this person, the answer is this person is the problem. Yeah. And another piece I would do is I would ask for, um, what are their, what's their, the term I use is end zone. You know, what is your end zone? If you're hiring me,

what do you consider a touchdown? You know, what, what do I have to do to give you what you want? Because even though I'm providing legal services to people or screencast or whatever, um, I, my idea of what a victory is may not be the same as yours. And frankly, the way you determine victory may determine whether or not I want to work with you. Years ago, when I was in the firm, I had someone referred to me and it was a business dispute. I did a lot of those where companies, partners were fighting each other. And those were like divorces. Everybody's so angry, right? And this guy, so he meets me and I tell him I'm interviewing him, he's interviewing me,

and I'm getting really weird vibes from the whole meeting. And at the end, I say, so what is your end zone? What do you consider a victory? He says, well, I want to beat the other guy so bad that his kids can't go to college. I said, okay, thank you. And let me find someone to refer you to because I don't want this guy in my life. And I had a friend who was just getting started as a solo attorney, and I referred the case

to him. I said, but hey, before I send you this case, I want you to know what he said to this question. And then my friend called me a couple years later and said, Dave, that son of a, you know what, you send me, now he's suing me for malpractice. And I'm like, well, you know, you should have known. I warned you. Yeah. So, so I think you look at attitudes, you look at their idea about cost and value.

I don't even want to say cost. I want to say whether they value the work you do and, and their history. And those are three good things to look at when determining whether you take them. And, and so you can fire them before you hire them, I guess is my point. All right. No, that's good, right? Stop it before it starts, before you make the mistake, right, is the number one. Preventative measures should be number one.

So you don't ever have to fire a client. Yeah, yeah. Okay, so the second thing is, as you asked earlier, what happens after you take them on and what is the fireable of places? The first one is non-payment, right? Nobody wants to work for free. That seems to be the easiest one, right? And it's also maybe the most common one, which is a failure to pay. Sometimes it could be you could put slow paying in here, too.

Sometimes you will get paid, but it'll take forever or you'll need to remind them many times. And it becomes this ongoing process of extracting payment from somebody who doesn't want to pay you. So it's not even like that they didn't pay. Sometimes it's like they paid, but they paid really late. And I had to talk to them like five times to get them to do it. And so in the end, was it really worth it? But non-payment is a, is a really common one. And you know, that's, that's, that's pretty easy. And, uh, you also get the, uh, they, they will often come to you with more work and with a promise of paying you. And it's just like once, once people are not paying you or making their payment conditional on more work. You should not work for them.

Just forget it. Yeah, that it's just like my dad from Missouri told me when I was a little kid. He says, what do you do when you're in a hole? You stop digging. That's right. I mean, I would say if somebody if somebody you have a payment problem with somebody and they come back to you, the you probably should just say, sorry, I'm not interested in that. You should pay me. So you probably should just say, sorry, I'm not interested in that.

You should pay me. The only other thing I could say is if you really want to give it another go is that's when you start demanding payment up front from that client. Like, you didn't pay me. So now, sure, I'll do this new job for you, but you got to pay me now before I start work. Because you can't do work that you're not going to get compensated for. You can't afford it. Yeah, get paid what they owe you and get paid up front on the new stuff. And then decide if you want to deal with them. Yeah.

Another one is just dishonesty. I mean, these are relationships. They need to be based on fairness and honesty if you find that they're not telling you the truth. And this doesn't just apply to the legal context. It applies to really any business. If they're not giving you straight information then um you know they're trouble for you and ultimately they're going to be a lot more trouble than they're worth yeah you get those making promises that they can't

keep oh no no no we really value you it's going to be better and then it's not better you know and whatever it is we're gonna we fix this thing it's going to be fine uh we've got something right around the corner we've got this project that we're going to work on next week and it never comes. And there are extenuating circumstances there, but you can tell, you can use your same radar that you use for other human beings to determine if the stuff that they're telling you is just to tell you what you want to hear or keep you spinning while they're considering their options. And yeah, you don't want to work for somebody who lies to you and doesn't value enough to be honest.

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Just go to freshbooks.com slash free agents and enter free agents in the how did you hear about us section so they know you came to them from the show. Thank you so much, FreshBooks, for supporting this show and all of RelayFM. There's subtle reasons, though, as well. Sometimes, you know, it's not as simple as they're not paying you. Last year, right before we started recording this show, I talked about it in one of the first episodes, is I had a very big litigation case that ultimately I decided didn't make sense for me to continue. very big litigation case that ultimately I decided didn't make sense for me to continue. It would have been very lucrative for me, but it would have required me to expand the size of the business beyond what I wanted. And I didn't feel like it made sense for me or the client. So ultimately I gave up the work and, you know, the client is still a client. I still do their

corporate work, but I'm now supervising someone who's running the litigation. And it was really good. The client was very happy with what we did and why. But sometimes there's reasons to fire a client that have nothing to do with the client being a jerk. It's a little harder to decide, but they're there. And if you're paying attention to your business and trying to figure out what your overall goals are and your plans, it may make sense to get rid of some of your best clients. Yeah, I think when we talk about diversity of income, too, in the income streams episode that goes there where you could have a client who wants to really take take over your life and and being able to say, like, no, I'm not willing to. You know, my business is not to accept any work that comes along until I'm full. My business is a diverse set of things and this is going to overwhelm them and I can't do it. Also, if you're not willing to bring on more help, bring on a subcontractor, expand your business.

So now that you've got employees, unless you're, if you're not willing to do that, then that becomes that time when you say, this is not, this is beyond the scope of what I'm willing to do in my, in my place in life right now. Yeah. I mean, you could have a, let's say you've got a business where you have a hundred clients and one of them becomes super big and suddenly you have to get rid of 50 of your clients to manage that one client. That could make sense because it's, it's a lot less administrative work when you have fewer clients. But it could also not make sense because if that client leaves, you just lost half of your income. Right. And so you've got to make big boy and big girl decisions about that. But that's a very good reason to get rid of a client.

They get too big or maybe too small. Another one is that maybe you have better opportunities. You want to push your business into a different direction. And that might mean, you know, cutting out some of the work you're doing in the existing field. So you have time to push that direction. Also, it can have to do with ongoing opportunity. Like you might have somebody who you know is going to be able to pay you for a little while, but in the long run, the work is going to be over and you're going to

have to turn away other things that might run much longer that that's something that i've seen from time to time which is like oh here's a big project you could work on you're going to have to set aside most of your life for the next six months but then but you know but you'll get paid and then the project's over and that's it and And choosing not to do that and saying, I'm not going to take that on versus the stuff that's going to, I want to keep all of my other work going. Yeah, you don't want to be in a desert in six months with no work.

It is great to have a client who wants to give you more work, right? I mean, it is a great thing in general, but some of the stuff that they may demand of you is, and it doesn't mean you fire them from everything, but it means you're turning down work from them. And they may, or it may be that their needs have expanded beyond where you're, you're willing to go and saying that to them, because they may not be thinking that they may like working with you. And you may need to be the one to say, no, what you're looking for is more than I can give you.

And I think all this work, maybe it's, I think all the work you're giving to me at this point has gotten so big that you need to, you need to hire somebody to do it. You need to find somebody dedicated to do it, but I can't give you what you want. Yeah. I think the real ninja move out of all of this is you don't just fire people because they don't pay you. You should be looking at all your clients really at all times with at least a thought as to does it still make sense for me to service this person right they call that that 80 20 rule i actually tried to find on the internet who came up with that first and i couldn't but the um the idea is if you spend 80 of your time on 20 of your clients um then that 20 probably needs to go. And it's hard, right? It's hard to say no. And as an independent person,

it's hard to turn away work, even if it's not the best work, because it is work and you're going to have to replace that work. But we've all had those, I think, those experiences where it's like, this person is not worth the effort for what I get out of it.

And I mean, in business, although it's probably true this person is not worth the effort for what i get out of it and i i mean in business although it's probably true in life too the idea like you know just because would i take this on now if it came to knocking on my door and if the answer is no then probably you should end that relationship and not just keep it going because it's around, even if it's not very good. Yeah, I have got a lot better at this in the last few years, especially since going out on my own, because I realized this is a survival thing. It just takes a couple bad people to really impact my life. So I've got to be super vigilant about it. So if you decide somebody needs to go, how do you do it? There's a couple ways, I think. There's the gentle and the not-so-gentle approach.

Pete Just teach me, ninja master of firing people. You know, I think part of it becomes, because I was a trial lawyer so long, and I've been around a lot of people who are very much angry in disputes, and lawyers who, frankly, adopt those personalities, and they always burn out. They never last long. I think one of the reasons I was able to do it so long is that it just, I'm able to separate the emotion from it all. And you can be very friendly about it and just say, look, you know, this isn't working out. The easy one is like, you're not paying me. I could be with my kids or I could be working for free. That just doesn't make sense to me. You know, definitely use the F word fairness and say, it's not fair. This relationship

is no longer fair. We can't do this. Um, I, I try, I would try to recommend anytime you separate from someone that you don't, you know, you don't do it with fire and brimstone, but you do it nice and peacefully if you can. Um, the, uh, it, it, it's something that can be arranged. I mean, you can talk to people. When I had that thing last year where I moved out of litigation, I set up a meeting with the client. I went and explained everything because I was firing someone who I very much liked in essence. And it went really well because I handled it well. I think that you have to give some thought to this. I think as an independent worker, it's very difficult for you to have that conversation for a lot of people,

but you need to do it. I would even recommend practicing with your spouse or your significant other or in front of the mirror. There's no reason why you can't work out getting the words over your lips because even though you've got them in your brain, getting them through your lips sometimes is hard and you're going to be stressed when you have that conversation, but, but try and be the adult about it and be gentle with it. If someone becomes angry with you or, um, or, you know, abusive, don't become angry or abusive back. Just, just pull back and say, you know, this isn't going to work and, uh, and get out of it as best as you can. I don't think firing a client by, uh, yelling this isn't going to work and get out of it as best as you can. I don't think firing a client by yelling and screaming is going to be something you're going to be proud of later or something you'd want other clients to be aware of.

So try not to. Yeah. I mean, this is very similar to our discussion of how you tell your employer that you're leaving. Yeah. Which is. When you fire them, I guess. Yeah.

Yeah. Which is. When you fire them, I guess. Yeah. It's advice for life in general, which is, you know, don't make it, don't bring your frustration with you. Keep it to the facts. more, you know, make it about, make it about how it's mutually beneficial, make it about how, you know, you're not going to be able to serve them well, and they need to find somebody who's a better fit. That's all good, all good approaches.

I think a very disarming word in the English language is the word fair. I think people have a hard time arguing with fair and say, look, I can't continue to do this. If you're not paying me, I can't work for you. I, you know, this is costing me too much money. You know, I, I have to stop and you have to give me some kind of payment plan. We have to figure out how to solve this problem. You know, when you bring that into it, it usually disarms the other person because people don't want to be first. People don't want to be perceived as, as unfair and people don people generally don't want to be unfair. So it'll be harder for them

to argue with you. And if they do make a big deal about it, then you really got a bad one, and you need to get away from that person anyway. We had a couple of stories from some of the free agents in the Facebook group. I really liked Steve's comment. He says, during my career, I've fired several clients. In each instance, these comment. He says, during my career, I've fired several clients. In each instance, these were people that my experience, my gut told me I should not have taken to begin with, either for money or because I let them talk me into it. It turned out badly. So I think that's kind of reaffirmed what we were talking about earlier. You need to develop a gut in these things because this is a survival thing for your business.

It is – if you have to fire somebody because they haven't paid you, that means you've worked for free when you could have been working for money. Maybe the best bit of advice from this whole show is figure out that screening process and don't ignore it. Yeah, I mean how many times is that the the story which is i knew i shouldn't have done it yep it's very rarely a surprise right it it happens but it is it is very rarely a surprise what it is is you override your gut instinct your initial reaction and rationalize a reason why you should do it and then in practice you discover that your initial, look, we all humans would not have survived if we didn't have survival instinct. If we didn't have the ability to determine this is something that I shouldn't do, this is somebody I shouldn't interact with, that's a real feeling that comes from information that you may not be able to process on a conscious level, but that your brain is processing.

And listening to it is hard, but it absolutely happens. Well, there you have it. Don't be afraid to fire a client. It's okay. In fact, it may be the way that you get to stay a free agent. That's right. In the end, your relationship with a client is not the reason you're doing what you're doing.

It's to make a living and to be paid and to do the work that you want to do. And don't, you know, don't sacrifice all of that because of a relationship with a client. And, you know, and that sounds ridiculous. But in the moment, you know, you may think, oh, well, I really want to keep working with this person. I don't want to disappoint them. But if you step back and look at the big picture, you realize this is disastrous. I need to, what's most important to me? Even if it ends up going badly and it's tough and they're angry and things like that. If the alternative is that you can't afford to keep working,

then you've got to do it. All right, Jason, there you have it. That's right. We'll be back. We're going to do an interview in our next episode in a fortnight. And in the next block of episodes, we're hoping to have another feedback show. So if you've got questions for us or stories you want to tell, anything like that,

there are lots of ways that you can send your messages to us. And that would be great for us in preparing our next feedback show. So here are the ways to do it. If you go to relay.fm slash free agents, there's a contact link that will email both of us. And the email is freeagents at intertext.com. But you can find it on the Relay website. You can post in our Facebook group, facebook.com slash groups slash freeagentgroup, or you can tweet at us at freeagentsfm. I'm Jay Snell on Twitter, and David is Max Sparky on Twitter.

So many ways to reach us. We would love to get your feedback for the feedback show, and we'll be back in a fortnight with a great interview with a very interesting person but until then david it has been a pleasure as always see you in two weeks Thank you.