The Pareto Principle, or the 80/20 rule, states that 80 percent of any given outcome derives from 20 percent of the causes. Stated more simply, what the Pareto Principle means is that, as a general rule, 20 percent of your clients account for 80 percent of your aggravation, 20 percent for 80 percent of your profits, and so on down the line (of course, it's possible for these percentages to overlap—a client can be aggravating and profitable at the same time!)
You Can Use the Pareto Principle to Identify Burdensome Clients
If you find yourself working longer and longer hours for your clients, and only just breaking even, it's time for you to apply the Pareto Principle and identify the clients that are causing you the most trouble and giving you the least return for your effort. For example, you can nail down that 20 percent of your clients who:
- Are habitually late paying their bills.
- Repeatedly haggle with you about trifling details over the phone or via email, cutting into your billing time.
- Refuse to follow the strategies you recommend, wasting their time and your own without any prospect of a financial payoff.
- Bring you “penny-ante” cases that require an inordinate amount of work.
- Are simply difficult to deal with, and cause you more frustration and aggravation than they're worth.
What do you do if an especially aggravating client is also one of your most profitable? That's a decision that you have to make—and it won't be easy!
The 80/20 Rule Can Increase Your Practice's Profitability
At Great Legal Marketing, we know that regularly applying the Pareto Principle can trim your client base to your advantage: you'll lose the annoying clients, and retain those that pay the bills.