The Risk Manager, Summer 2011

Many of the largest malpractice losses result from representing a dishonest client. At the 2010 Aon Law Firm Symposium program “Recurring Risks Posed by Dishonest or Unworthy Clients” panelists identified seven factors to consider in determining whether a client is worthy of your services.

  1. Is the client a public or private company? Unworthy clients are typically not public companies.
  2. Is the client’s business financial services or a related industry dealing with other people’s money?
  3. Has the business experienced phenomenally aggressive recent growth that could be the result of cutting corners?
  4. Is the client unusually secretive and does the client refuse to provide requested information purportedly to protect their competitive position?
  5. Does the business have a dominating CEO who runs the business with an iron hand?
  6. Does the business employ a bullying style when dealing with outside professionals?
  7. Is a foreign business client unusually secretive?

If you decide that a client is unworthy, risk manage the situation by withdrawing immediately.

Source: Conference Report: Aon Law Firm Symposium, ABA/BNA Lawyers’ Manual On Professional Conduct, Current Reports, Vol. 26, No. 22, p.657 (10/27/10).