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Introduction:

Who is a Toxic Client?

As an entrepreneur and business owner you are an optimist. You see the positives and plan for the successes.

You must also be a realist. You must plan for the inevitable challenges associated with running a business. You must be aware of all the dark corners. And when it comes to darkness, one of the biggest challenges you will face is the Toxic Client.

The word ‘toxic’ is not a happy one. Any word synonymous with poison, death and pestilence represents something very serious to avoid. Our natural preferences, our multi-millennial honed instincts, are geared toward staying away from toxicity. Evolution has taught us some very powerful lessons.

But evolution has failed to weed out the toxic people among us, from our places of work and our business relationships. Indeed, with the spread of drug usage and onset of Entitlementia described in Chapters Seven and Eight, the numbers of Toxic Clients have increased. Toxic personalities, from the entitled and narcissist to the bully and manipulator, inhabit our common space. You all know that they are out there.

A Toxic Client is a person that sets you back in a significant way. More than a mere nuisance, they are a distinct detriment to you, your team and your company’s morale. In terms of time, money and effort the Toxic Client is a drain on resources and a drag on revenue. The damage wrought by a Toxic Client can be severe. These are not people who simply bother us. These are people capable of poisoning and contaminating entire organizations.

Their toxicity can be a cancer. If you allow it.

This book is about knowing and avoiding the Toxic Client. Again, you know that they are out there. If you have been in business for any length of time you have probably knowingly dealt with at least one of them. If you are to succeed in business over the long term you must know how to identify and dismiss them.

Healthy organizations survive best when not beset by toxins in the form of everyday clients. Business is tough enough with taxation, regulations, competition, price pressures and all the employee issues. To further be challenged by those you are just trying to do business with may seem inconsequential when compared to the aforementioned business risks. But the individual Toxic Client, or a set of policies which encourages multiple Toxic Clients, can more frequently and quickly shut down a business than a government audit or employee harassment claim. Owner beware.

I have sat in a great chair for viewing the Toxic Client. First, as a lawyer assisting people with corporate and asset protection strategies, I have had a few Toxic Clients over the years. Every lawyer does. The old joke that the best law practice is one without clients is based on the experience every lawyer has in their encounters with Toxic Clients.

Secondly, my view has been enriched by dealing with a very large number of entrepreneurs and investors. My practice focuses on structuring and forming corporations and LLCs. Typically, I have a conversation about how best to structure and protect their business and investments and then the paralegals do the formations. Over the years have I consulted with a large number of clients. This has been enjoyable for a number of reasons, including getting to know people from all walks and businesses from around the world. I like the positive energy of entrepreneurs and investors.

In my conversations with these many people I frequently hear about their legal challenges. I have learned that the Toxic Client is a frequent nemesis to all. One of the reasons for corporations, LLCs and asset protection is to prevent Toxic Clients from suing to get at all of your personal assets. (This issue is a whole other book I have written entitled Start Your Own Corporation.) The stories I have heard, some of which are in this book under appropriate disguise, reflect the many shapes and varieties of Toxic Clients. And from these stories I have learned how entrepreneurs and others successfully identify and dismiss such flawed customers.

To succeed in business you must learn these strategies too. It helps to learn them right from the start.

Toxic Clients appear early. In that first flush of life as business owners, we often say “yes” to anyone who wants to hire us. We think the most important thing is establishing a client base. Beggars can’t be choosers, right? As long as we’re getting hired, that’s a good thing, and it’s all that matters.

But after a while, we learn an important truth: Not every client is a good client. In fact, some of them are truly toxic—they contaminate our business environment and breed negativity about the work, they infect employees by lowering their morale, they exhaust and debilitate our energy reserves, and they drain our coffers.

Like pollution or a disease, Toxic Clients are destructive to your business and your health. And chances are you’ve worked with at least one.

Perhaps you’re already thinking about a client or two who might fit this category. Have you ever had a client who complained incessantly, either about your work or about the work others have done which you now have to “fix”? Were you ever nickel-and-dimed over your “excessively high” fees? Did a client ever conveniently stop receiving your emails or responding to your inquiries once it was time for you to be paid? Has a client ever made you feel both miserable and exhausted? Did you ever feel like you were going crazy because a client kept asking you to do one thing and then, the next day, asking you to do the opposite? Have you ever had a client whose only physical activity is jumping to conclusions, all of which they exercise against you?

If any of these situations sound familiar, or if they remind you of other clients that have driven you nuts, you’ve had a Toxic Client.

The Customer is Always Right?

Really? The Customer Is Always Right?

Are they right when they won’t pay? Are they right when they return merchandise they’ve already heavily used? Are they right when they scream and show absolutely no gratitude for your assistance?

Of course not. Despite the time worn adage, the customer is most certainly not always right.

With a good customer you are free to honor the adage. With a Toxic Client you must sometimes nullify it. Sometimes the better course is to just say no. As in ‘yes’ you are the customer but ‘no’ you are not right. We will deal with this issue further in Chapter Four on Freeloaders.

Taking on a Toxic Client is not a step forward for you. It is a step backward. You will expend twice the effort you should as you chase your tail trying to please this client. And guess what? You never will. You’ll earn half of what your time and energy are worth (if, in fact, you earn any money at all from your Toxic Client). Meanwhile, you’ll shortchange the valuable clients who are worth your time.

If your business is going to succeed you must learn to recognize Toxic Clients before it’s too late. You must understand why such clients are toxic, learn how to extract yourself from a current Toxic Client and, ultimately, avoid working with a Toxic Client ever again.

This book is designed to share these lessons with you. In the following pages, I’ve included stories from a wide range of business owners who have dealt with Toxic Clients—including myself. You’ll see that no industry is immune to difficult clients who complain, constantly change their minds, yell at you or others, make unreasonable demands, second-guess you, miss appointments, refuse to listen, or won’t pay up. And through these stories, you’ll learn to recognize the signs of a Toxic Client right from the get-go. By doing so you won’t later have to give them the heave-ho. You won’t take them in the first place, to the benefit of your staff, your company’s future and your own sanity.