Running the firm
The client you should have let go two years ago
Every principal has one. The cost of keeping them is real, spread out, and almost entirely invisible on the revenue line.
Published
The three kinds
The unprofitable one, where the work exceeds the fee by a wide margin. The unpleasant one, who is rude to staff. And the misaligned one, who wants something you do not do and is quietly disappointed by everything you do instead.
The third is the most damaging, because both parties believe the other is at fault.
Why it gets postponed
Revenue is concrete and the cost is diffuse. The hours, the anxiety before the meetings, the effect on staff, and the attention taken from clients who are a good fit — none of that appears anywhere.
There is also the belief that it will improve. Occasionally it does.
The staff cost is the real one
A client who is difficult with your team damages retention. Good people leave over this and they do not always say why.
Tolerating it also tells everyone else what the standard is.
Keeping a client who abuses your staff is a decision about your staff, not about the client.
How to do it
Directly, once, in a conversation rather than a letter. Say the relationship is not the right fit and you do not think you are serving them well.
Do not list grievances. It invites a negotiation about whether each one is fair, which is not the conversation you want.
Do it properly
Give reasonable notice, offer to help with the transition, and provide what they need for the next firm. Check the advisory agreement for what it requires.
Ending a relationship badly creates a complaint. Ending it professionally almost never does.
What happens afterwards
Universally reported: relief, and surprise at how much attention it frees. The revenue is replaced faster than expected, because capacity went somewhere useful.