Business Details

BY FRANK A. STASIOWSKI, FAIA

When and How to Fire a Long-Term Client

Frank Stasiowski Every design firm has at least one client with whom it needs to part ways. For example, a first-time client that is unreasonable, litigious or doesn't pay on time (or at all!). In cases like this, the parting of ways is fairly straightforward. You do the project as well as you can, employ best efforts to collect 100 percent of your fee and then never call them again. And if they call, you offer your most sincere "thanks, but no thanks."

What about the client with whom you have a long-term relationship? What if your association with him or her transcends the typical client–designer relationship? Perhaps you attend the same place of worship or your children go to the same school, or maybe you are bridge partners or golf buddies. Saying no to these people is one of the most difficult things you have to do, but sometimes it's necessary if you want to run a profitable design firm. These people are most likely to be your biggest fans, but also the most likely to take your services — and the value you bring to their projects — for granted.

Before you make the tough call to give these people up as clients, you need to make sure that it is the right thing to do. Here are some tips on how to ascertain if your good friends are bad clients — and if they are, how to let them go in a graceful and dignified manner.

The Six Characteristics of Quality Clients

When determining if the client relationship can be saved, you must make an honest objective assessment of your client — not your friend. Ask yourself these questions:

Does this client demand, and are they willing to pay for, high-quality service?
Does this client conduct business activities at a high level of integrity?
Does this client have achievable expectations?
Does this client pay promptly?
Does this client accept reasonable contract terms?
Does this client have substantial long-term needs for your services?

In order to have any chance of running a profitable design firm, you must be able to answer "yes" to all these questions with the vast majority of your clients. If you have long-term clients that do not meet these criteria, you must explain your position and ask directly that they meet them.

It's worth noting here that an integral part of client-relationship maintenance is having frequent and honest business-related communications with your clients — always using the six characteristics as your compass. If you manage clients effectively along the way, even the most nerve-wracking discussions will be markedly easier. Your long-term clients should never feel blind-sided by anything you tell them. If they do, you need to take an honest look at your communication strategies.

What If My Plan Doesn't Work?

If you have taken the time and effort to explain your situation to your long-term client and you still can't get them to exhibit the characteristics of a quality client, you need to fire them. As said, even in the best of circumstances this is never easy, but here are some pointers on how to do it effectively:

Deliver the news in a calm and polite manner. If the process of trying to make your client a quality client has created acrimony, you need to put it behind you when ending the relationship — especially if you desire to keep your soon-to-be former client as a friend. Getting aggressive or vindictive will only make things worse.
If your client owes you money, make sure they pay you before you fire them. Once your professional ties have been severed, even friends are likely to see little reason to settle your outstanding invoices. They may have lingering animosity and be tempted to withhold payment.
If you have a contract with your client, make sure you fulfill your contractual obligations first or are aware of the consequences of terminating the contract. It would be wise to consult a lawyer beforehand. Even friends sue friends — especially if contracts are breached.
Give your client an explanation for why you are no longer able to work for them. The reasons should not come as a surprise if you have done your best to turn them into a quality client.
Refer them to another designer. Don't send bad clients to a competitor. Nothing good can come of that. If you know of a firm that might view your former client as a quality client in ways you do not, it is appropriate to suggest another firm. Never send a bad client on to another friend. You can sidestep this issue by directing the client to your local industry association, through which they can find a new designer for themselves.

Firing a client who is a friend is always a nerve-wracking experience, but there is no reason that you can't end your professional relationship on amicable terms, especially if you take positive steps to keep the business side of the relationship open and current. If you treat the situation with delicacy and professionalism, then you are likely to avoid an escalation of animosity and remain friends long-term.

Frank A. Stasiowski, FAIA, is president of PSMJ Resources, Inc. in Newton, MA. For more information, visit www.psmj.com.