By that I mean, don’t have one or even two clients account for too high a percentage of your or your firm’s revenues. It could potentially set you up for disaster. A sound law firm marketing principle involves broadening and deepening your client base in order to minimize the potential of one or two clients bringing the firm down, if they choose to leave. Their departure could be based on any number of reasons, ranging from dissatisfaction to merging with a larger company, whose existing law firm would likely end up doing all the legal work.
LeBeouf Lamb Greene & MacRae, an international firm of 700 lawyers and 18 offices worldwide, may well have wished they heeded that advice, at least for their Pittsburgh office, which closed February 1st, according to a story that appeared in Small Firm Business and The Legal Intelligencer. The demise of the firm’s Pittsburgh office was due apparently to a too big a reliance on one client, Alcoa, Inc.
In response to the question of what percentage of a firm’s revenue from a single client should start raising serious questions within the firm, “the most common answer was 10 to 15 percent” among legal industry experts and lawyers themselves, according to the story. I tell clients they should shoot for 5%.
Obviously, the event for a firm the size of LeBeouf Lamb is not devastating. But, how about your firm? If you have a client or two or three that account for a percentage of revenue you are not comfortable with, then you really need to give serious thought to expanding your legal marketing and business development efforts to ensure you have a broader client base.