Firms are increasingly using formal processes and criteria to find and keep good clients, and even weed out undesirable ones. Criteria can include maturity of the client's business, growth potential, leadership, industry type, breadth of services offered, and a client's possibility of being acquired. A management analysis is also applied as part of the due diligence. Lacking "at least a de minimums approach to qualifying new clients and having a client acceptance process would be akin to bowling with a blindfold on," says Carl Alper, business development director at Windham Brannon in Atlanta. "Ultimately, not every potential client would be the right fit for Windham Brannon and vice versa. We focus on capturing those clients whose industry focus aligns well with our industry segments where we have market competitive preference, having the right team that can deliver the requisite skill sets that client needs, and determining whether they want to truly build a long-term relationship."

A Strategic Approach

"Several years ago, we formed a retention committee whose purpose is to both review existing client relationships for continuation and to approve new relationships as they are being explored for the initial acceptance," says managing partner Wayne Pinnell, of Irvine, Calif.-based Haskell & White. "Since the formation of the committee, we've also developed a list of 'ideal prospect criteria' which helps us focus our evaluation efforts on existing and potential clients. We may continue to work with or accept a client that is less than 'ideal,' but we do so with the knowledge of where we rank the client against the ideal situation. We also give consideration to availability of personnel, time of year, and other factors when taking on 'less-than-ideal' projects."

"We've made a conscious effort to improve the quality of both new clients and existing clients," says Jeffrey Weiner, managing partner, New York-based Marcum & Kliegman. "The primary goals of our client acceptance process are: ascertain that new clients of our firm are reputable and have integrity; identify business risk and determine whether such risk is acceptable; assure that our firm has the appropriate expertise in each new client's industry; determine that we have sufficient resources available to service the client and meet client expectations; and that the fee has been established at an appropriate level."

Says Bob Biehl, assurance partner with GBQ Partners in Columbus, Ohio, "A credit check is run on all new clients when they are first thought to be a prospect. We hold a weekly meeting to discuss all potential new clients. The engagement team pursuing the prospect is required to meet with the Acceptance & Retention Committee (ARC), which is made up of four of the firm's members, our controller, and accounting/credit manager. At that meeting, the engagement team will go over the mandatory completed client acceptance form and discuss the type of service we'll be providing, timing of the work, staff availability, competition for the work, client management's integrity and reputation, potential risks, independence issues, results of the credit report, the client's current accounting firm, and the budget and expected realization for the engagement," he says. "After the discussion, a vote by the committee is taken whether we should accept or reject the client."

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