Wave of bankruptcies among clients? Expert reveals how the economic crisis is affecting law firm turnover and what can be done about it – Extremnews – The slightly different news

“However, they must act now to master the next challenges: This may also mean parting ways with problematic clients to make room for new ones.” The firm consultant has already been able to optimize internal processes for more than 250 tax consultants and knows how to act now. In the following article, he is happy to reveal how the economic crisis is affecting firm turnover and what can be done about it.

1. Termination of the mandate can lead to more sales

Tax consultants generally find it difficult to part ways with clients because they feel particularly committed to them. This is all the more true in times of crisis, although many tax firms are currently working at 120 percent or more capacity and have little idea how to handle all the work. In addition to the fear of letting their own clients down, there is often also the concern of potentially releasing revenue that they may need at a later date.

Experience shows, however, that there is still a lot of potential, particularly in the top mandates. However, this is only exploited in very rare cases, as the necessary time to advise clients proactively is often lacking in the day-to-day work of a law firm. This fact contributes to the fact that, contrary to general expectations, terminations of mandates in practice lead to an increase in sales rather than a decrease in sales.

2. Use excess demand

In addition, the firms do not have to fear a drop in work in the current situation, even if they should part with some difficult mandates or others should become insolvent: the majority of tax consultants are currently on a hiring freeze and can no longer accept the large number of enquiries. Unlike in the past, tax firms now have the opportunity to meet demand in a much more targeted manner. By taking on more attractive mandates, they can benefit from the general excess demand.

3. Gain time for marketing measures

Due to the legal situation, tax consultants are also used to companies having to make use of their services and coming to them of their own accord. The firms have little experience with direct acquisition, especially since this is still anything but common in the industry. However, there is also a lot of untapped potential here: many A-clients are happy to recommend them when asked – provided they receive good advice.

Anyone who takes action here and asks specifically about their clients’ needs during the evaluation increases the chances of a recommendation considerably. If time does remain, tax advisors can now also use the time particularly well to attend events or launch an initial marketing campaign. Even during the current economic crisis, there is little reason to continue to look after clients who are actually unprofitable, unreliable or have difficult behavior.

4. Clean up the client base

Last but not least, by holding on to difficult clients, firms are ultimately putting their A-mandate at risk. The latter are usually loyal and patient, but due to the noticeable workload of many tax firms, they are increasingly lacking advice and guidance for their future tax and business activities.

Anyone who artificially holds on to their entire client base just to keep the firm generating revenue will continue to neglect this proactive advice in the future – and risks having their worthwhile mandate terminated in the long term. Tax advisors should therefore now subject their client base to a critical review and separate themselves from problematic orders. This will ultimately give firms more room to provide their clients with in-depth advice so that they can continue to form the basis of a sustainable client base after the economic crisis.

Source: Kanzleibooster GmbH (ots)