Why Size Alone Misleads And How Some Clients Are Worth More Than They Look.

By Sue-Ella Prodonovich

In professional services, revenue quality matters as much as revenue size. This guide shares 9 ways to assess the value of your client work so you can focus on a portfolio of profitable, strategic, and enjoyable relationships.

At first glance, revenue is revenue. A matter comes in, the billings look healthy, and it’s tempting to think that’s the end of the story. But in professional services, not all revenue is equal.

Some work is worth far more than the invoice amount. Other work, despite a big headline number, may cost more than it brings in.

The smart firms know how to tell the difference. They measure revenue quality, manage portfolios, and build ecosystems for career-long connections.

NINE factors to consider

1. Revenue

Obvious, but incomplete. Larger matters can generate significant fees but size alone can mislead. A high-billing matter that consumes resources, or carries high risk (including unreasonable work demands on professionals), or has extended payment terms may be less valuable than a smaller, repeatable, prompt-paying engagement.

2. Reference

The reputation lift the work brings. Some matters punch above their weight because they position you as an expert in a coveted space. That might mean a high-profile client, a sensitive industry, or a project that becomes a case study.

For example, acting for a mid-sized company in a precedent-setting transaction could boost your profile more than a one-off job for a global brand.

3. Referrals

Great client contacts open doors. If a client regularly recommends you to peers, their value compounds. Track where your best referrals come from…you may find that modest accounts bring the most profitable introductions.

4. Resourcing

Some work eats time and talent. Others can be delivered with lighter resources, leaving capacity for the most experienced professions to focus on more profitable matters and let emerging talent ‘cut their teeth’ and accelerate their experience. When valuing revenue, ask: What will this matter take me away from? Will this matter add to the bench strength of my team?

5. Risk

Risk comes in many forms. For example,

Complexity and context; technical or regulatory complexity increases time and cost.
Client type; some clients are less forthcoming with the information you need and more prone to disputes, delays, or non-payment.
Capacity; If your team are already pulling all stops or all-nighters to deliver on current work then the risk of adding to the pressure cooker may tip things over the edge to a position that can’t be salvaged.

Risk should be priced in or avoided.

6. Replication

Some matters are one-offs. Others create assets you can use again. If you can reapply precedents, templates, technology, or know-how, the value of that first job rises sharply.

For example, developing a compliance tool for one client becomes the foundation for similar tools across an industry.

7. Reactive vs. Repeatable

Beware work that’s purely reactive. The client never intends to invest in a relationship or use you again. Sometimes you’re a “stalking horse” to negotiate with another provider, or to justify in-house resourcing. Such work can still be worth doing for strategic reasons, but go in with eyes open.

8. Reliability

A client’s reliability can make or break profitability and reputation. Do they give clear instructions? Provide documents promptly? Treat the working relationship as a partnership?

Poor client behaviour drives up costs and erodes margins. Your Professional Indemnity insurer can give you insights into warning signs.

9. Relationship

This is both strategic and human. Relationship value can be measured in Client Lifetime Value (CLV), the total direct and indirect revenue a client is likely to generate for your practice over the course of the relationship.

It also includes something harder to quantify but one of the most important factors in a sustainable practice: how much enjoyment you get from working with them.

After all, these could be contacts from your first years of practice (when you earnestly networked your butt off at university alumni and young leader functons).

So, if your practice is a people-centric business then long-term, mutually enjoyable relationships are the oil that keeps your wheels turning and provides you a trusted ‘squad’ of professional friends to turn to when you need it.

Read more about the importance of friendships at work here “The Power Of Working With People You Like”

Putting It Into Practice

If you only measure revenue by the billable total, you miss the bigger picture.

If you ‘prune’ clients who don’t deliver a minimum required fees, but tick all the right boxes on other fronts, then you miss the impact on your value ecosystem.

Build these factors into your client intake or matter review process. Some firms score each new engagement across dimensions like these before saying “yes”. Others review their top 20 accounts annually to decide where to invest and where to quietly disengage.

Whatever your approach my 9R’s Of Revenue Value is a prompt for reflecting on a client’s value beyond billables. Indeed, sometimes one factor alone eclipses the need for form-filling or further discussion.

The goal: a portfolio of work that’s profitable, strategic, and enjoyable.

The 9R's Revenue Quality Scorecard (PDF)

Want More?

If you’d like to know more, get in touch by email sueella@prodonovich.com

or book a private consultation with Sue-Ella to brainstorm ideas at www.bd45.com.au

Sue-Ella’s 9R’s of Revenue Value: 9 Ways to Measure Client Worth Beyond Billings