Getting mired in a contentious client relationship is like being stuck in a tar pit: No matter how you struggle, you keep sinking. Whether a hefty ego, poor communication, or a bad business plan is to blame, ridding yourself of a nightmare client can be a delicate operation.

If you’re not careful, you could make enemies, lose business, or invite legal problems. Yet if you don’t end the relationship, you’re wasting precious resources and prolonging your agony.

We asked two IT pros—Judith Kallos and Dave Hecker—how they extricated themselves from awful contracts and how to avoid falling into this type of situation. Kallos owns The Istudio, in Gurnee, IL, where she offers e-business and marketing coaching and Web development services. Hecker is a software technology consultant and President of RevMedia, Inc., a software-consulting group in the Los Angeles area. Both shared their stories with TechRepublic and offered strategies for avoiding troublesome clients and breaking free from a bad situation.

First of two parts

Look for the second installment in this series to find out one VP’s three-step approach to salvaging a bad client relationship and a sample “out clause” to include in your contracts.

Screen out potentially annoying clients
Kallos said that due to the get-rich-quick mentality prevalent in the early days of the dot-com boom, many of her earliest clients had poor business plans, no business savvy, and too much ego. The trend continues even now, because most of her clients are in the beginning stages of launching a new e-business. Many don’t have a full picture of the information they’ll have to bring to the Web development table, so an essential part of Kallos’ screening process is a project review request form on her Web site. The form asks potential clients questions like these:

  • How do you plan to commercially gain (profit) from this venture?
  • Is your business a full or part-time venture?
  • What is the legal structure of your company?
  • Why are you putting your business online?

Kallos said she’ll “speak to anyone who completes this form” and hopes that the process of filling it out will help potential clients form a more complete picture of what she offers, as well as what she expects of her clients. Clients who understand their level of responsibility in the development of their Web site tend to be more receptive to her expert advice, she’s found.

Red flags: Early warnings of a difficult client
Kallos said that one of the biggest red flags she sees is a client who has an inflated ego and a lack of respect for her expertise. Also, if a client starts using lots of Web development lingo or seems uncomfortable when she asks questions that force them to admit their lack of knowledge, she knows their insecurity will cause problems in the consultant-client relationship.

For example, she had one client who thought of her as “one of his girls” and expected her to follow his directions instead of using her expertise to efficiently develop his site, which cost him more money. After failing to read some documentation she had provided, he became angry and called her to complain. When she tried to carefully explain that he had some “incorrect perceptions,” he fired her. She said that she had felt “in her gut” that he wasn’t going to be an easy client to deal with, but she was hungry for business at the time.

“Your gut is never wrong,” she said. “Whenever I’ve ended up with a nightmare client, it’s because I didn’t listen to my instinct and I went for the zeroes.”

Likewise, Hecker said his worst client relationships have been directly related to the client’s lack of trust in his skills.

“Part of what makes a nightmare client so bad is that they don’t listen to their consultants…and they paint themselves into a corner; then they blame the provider. It’s a classic cycle,” he said.

He described a recent client who was adamant about making project changes that Hecker told him would be impossible or, at best, counterproductive. The client responded with comments like, “Just make it happen” or “My nephew said it should be easy to change the database structure,” ignoring Hecker’s advice.

“When you have a client like that, you can assume that they will blame you for everything and eventually indulge their fantasy that someone else could do it better,” Hecker said.

Giving time-draining clients the heave-ho
Being fired or having your client leave in a huff are obviously not the best ways to disentangle yourself from a frustrating, time-draining project or client. Kallos has developed a method for effectively communicating that she’s serious about ending a relationship. She takes three aggressive steps:

  • She speaks to the client by phone and explains that she’d like to exercise her right to terminate the relationship as outlined in the contract or letter of agreement.
  • She repeats the sentiment in a certified letter.
  • She returns all materials that belong to the client. She usually includes a Zip disk of the client’s Web site, including any scripts, documents, or passwords she’s created for their benefit, with the certified letter.

Kallos said four of the five clients she’s had to release have come back to her asking for a renewal of the relationship.

“I tell them that unfortunately my production schedule doesn’t allow me to take on new clients at this time,” she said. “To take them back would be to get myself right back in the situation.”

Hecker takes a more subtle approach. He said he recently “retired” a client by inserting a milestone into the project plan that required the client to provide a comprehensive inventory of its products, complete with pictures. Then, Hecker’s company would provide a mock-up of the client’s desired online store and receive a large lump payment.

“This worked like a charm,” Hecker said. “I knew that this client would hate every design we submitted and that they were totally unprepared to submit their inventory to me. Thus, I created a situation where we could ‘mutually’ part ways within 45 days.”

In another insufferable situation, Hecker sent his client increasingly frightening project risk reports. The reports were accurate, not exaggerated, but “spun to scare the client a little bit,” he said. Hecker included statements like, “Ongoing changes to project requirements pose risk to launch date,” and “Lack of client deliverables leads development team to standstill, resulting in risk to launch date.”

Eventually, the client decided he’d be taking less of a risk by working with another consultant, Hecker said.

Hecker said he doesn’t believe that his tactics have crossed any ethical lines or violated any consulting standards. He contends that he has “saved the clients from themselves,” because most of them are trying to take dangerous shortcuts in the business development process.

What do you think?

What techniques have you used to end a contract prematurely? Have you ever done anything unethical to rid yourself of a troublesome client? Send us an e-mail and tell us your story or post your comments below.