Practice Management

Client Onboarding

Onboarding clients is a critical task. This is a process that enables practitioners to mitigate risks and set client expectations. The author shares his views on the importance of client onboarding.

While the experience of a new client or matter can be enthralling, practitioners should consider utilizing a formal, comprehensive client onboarding process to mitigate risk. Accepting a client or matter that does not align with you and your organization’s business goals can be a deflating experience for a professional and his/her team. Professional organizations have created standards for which their members should ascribe to and serve as the basis for any practice. In addition to these standards, professionals in practice need to consider quality control and risk mitigation processes and controls within their own operating processes to ensure standards and objectives are met with purpose and quality.

Client onboarding processes should identify risks that can have adverse impacts to a project (e.g., assignment, matter, etc.) and design procedures to identify and mitigate those risks. The following are a list of risks practitioners offering forensic accounting, business valuation, and/or litigation support services should consider when designing or modifying their existing client onboarding processes. Additionally, suggested mitigation activities are provided to help practitioners consider alternative risk mitigation strategies.

1. Know Your Client (“Reputation Risk”)—Ever heard the term, “perception is reality”? Well, who you associate with and do work with will impact you and your reputation. This goes for the client and counsel you work with. During the onboarding process, identify client expectations (scope, timing, price, etc.). Also, identify the attorney’s role in facilitation of client expectations along with the attorney’s own expectations. Addressing these upfront can identify potential risk and help assess the compatibility of working with this client and attorney. Make sure expectations align with your professional standards and objectives.
2. Know Your Service (“Credit Risk”)—Far too often practitioners fall into the “trap” of providing services, at the request of client/counsel, at a feverish pace as deadlines approach. While you may have been hired to perform a business valuation the day prior to mediation you are being requested to provide an income analysis. This is problematic two-fold. These unanticipated services disrupt your practice’s project timeline (remember, you have other clients and responsibilities too) as well as create a situation for fees to be incurred that were unanticipated. Thus, not allowing the practitioner to address retainers and avoid “funding litigation”. At the beginning of an engagement, clearly articulate the service and deliverables. I suggest avoiding the use of vague scope language such as “forensic accounting and valuation services”, “financial litigation support services”, etc. While we want to help solve issues, we need to be cognizant of our time and service responsibilities.
3. Delivery (“Credibility”)—If the first two risks went undetected, you are most likely facing a multitude of issues as this point. You are being asked to do more work than anticipated without payment of fees upfront, your timeline and demands for other items have been left ignored, and the increased stress has left your ability to provide quality, sound work-product hindered with the stress. Thus, causing you to “cut corners” or rush to get something out the door with the fear of not “meeting client and attorney demands”. And, while you may have “delivered” a product, it ends up doing more harm than good. Your deliverable is the item that cannot leave the door without a sound quality control review.

These articulate just some of the risks and scenarios working in forensic accounting, business valuation, and litigation support can run into. The excitement and pace of our profession is what drives some practitioners. However, emotions must be kept in check to ensure risk mitigation for yourself professionally and the practice. Having run my own practice for several years, I have faced these and other risks. Below is one example of a step we added to our onboarding process that I have found to improve our ability to service as well as identify potential risks.

1. Client Intake Form—Prior to meetings or signing of an engagement letter, we request either the client or attorney to fill out an intake form. The form includes personal information for billing purposes (setting billing responsibility with client or counsel), important dates (deadlines), and spaces for issues to be articulated. This allows us to get some semblance of the client scope, potential issues regarding timing, etc. More importantly, it sets clear boundaries of professionalism and quality control. Right at the start. If we cannot get an intake form, this may indicate future risks (obtaining documents and obtaining them timely and organized, communications, misinterpretations, etc.). The intake form is the precursor for planning and allows for review of expected issues and uncovering of others. This has allowed us to streamline service deliveries and provide customers with a proper estimate to ensure credit risk is mitigated.

Running a practice is one of the most challenging and rewarding experiences practitioners can take on. Be cognizant of the potential risks to make sure you run the practice you want and not run the practice how customers want you to!

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Joshua Shilts, ASA, CPA, ABV, CFF, CGMA, CFE, is president of Shilts CPA, PLLC. Mr. Shilts’ practice is focused on assisting attorneys, individuals and businesses with complex financial matters and disputes. He has held roles with international consulting and public accounting firms in Miami and New York City as well as positions with large public organizations. Mr. Shilts is a frequent lecturer on a variety of forensic accounting matters. He has been involved with hundreds of forensic investigations dealing with a variety of matters involving personal and business disputes as well as the identification and mitigation of fraudulent activities. Clients have sought Mr. Shilts’ advice and services because of his unique industry experience and knowledge.

Mr. Shilts has provided expert testimony in commercial and family matters surrounding business valuation, economic damages, fraud and other applicable disciplines surrounding economic and accounting issues. He has been qualified as an expert and testified in State and Federal courts.

Mr. Shilts can be contacted at (844) 850-6166 ext. 101 or by e-mail to josh@shiltscpa.com.