A large client can bring worthwhile work, a strong relationship, and a familiar way of operating. The business question is what happens if that client's instructions slow down. A concentration review helps a law firm make that dependence visible before it becomes an urgent staffing or growth problem.
Start with the distribution of work and fees, then add what the partners know about the relationships. A percentage can identify something to investigate. It cannot tell you whether a client will stay, whether a large matter will repeat, or how quickly the firm could replace the work.
Why diversification deserves a measured approach
BDC identifies dependence on a single client, location, or sector as a business risk in its guidance on diversification. That is a useful starting point for a law firm, although the guidance addresses businesses broadly rather than establishing a legal-sector benchmark. Read BDC's discussion of concentration risks.
Expansion also has costs. In BDC's June and July 2025 survey of 545 business owners and decision-makers, half cited overextending financial or human resources as a concern with diversification. The finding is a caution about implementation, not evidence that a particular growth strategy will succeed for a law firm. See the survey discussion.
Define the measure before calculating the share
For a first review, choose one measure, one currency, and one period. For example, you could examine each client's share of net billed fees over a completed year using a reconciled report. Calculate the share as that client's amount divided by the firm's total on the same basis.
Do not mix a client's cash receipts with a denominator based on issued invoices. Also check whether the source includes taxes, disbursements, credits, or only certain types of fees. Keep the definition beside the result so a later review can reproduce it.
Identify the largest client and the combined share of a small group of leading clients. Then inspect the underlying matters. One substantial file ending normally has a different explanation from a recurring stream of instructions falling away. A shorter comparison period may help reveal the change, but can also exaggerate the importance of a single invoice.
Check whether different names represent shared exposure
A client list may contain separate companies whose purchasing decisions depend on the same corporate group. Review those relationships in a separate management worksheet where appropriate, documenting the grouping assumptions. Do not change source client identities merely to make a chart simpler.
Consider other connections as well. Several otherwise independent clients may operate in the same industry or rely on the same local economic conditions. That does not make them one client, but it raises a different question about what could affect their demand at the same time.
Keep client concentration separate from referral-source concentration. Ten clients introduced by one referrer are ten client relationships, while dependence on that referrer concerns the future flow of introductions. Use a separate record to investigate that question rather than inferring it from billing data.
Run a slowdown scenario, not a prediction
Hypothetical example: a firm bills $600,000 in annual net fees, with $180,000 attributable to its largest client. That client represents 30% of the total. If its fees were 25% lower in a comparable future period and all other client fees stayed unchanged, the firm's total would be $45,000 lower, a 7.5% reduction from the baseline.
This arithmetic does not estimate the likelihood of losing work, the effect on profit, or the timing of cash receipts. Use it to start a practical discussion: which assignments would reduce, what capacity would become available, and which commitments would remain? Build any cost or cash scenario separately with the firm's accounting information.
Avoid adopting a supposed safe concentration threshold without considering the firm's situation. A new practice, a specialist boutique, and an established general practice can have very different client mixes. The review should produce a decision about resilience, not just a coloured indicator.
Use Clio data to locate the relationships worth reviewing
For Clio Manage users, Keeney Analytics Client Analytics provides views of top clients and concentration, plus client financial detail and associated matter and invoice activity. Use these views to locate the relationships that need closer attention.
Read the displayed measure before comparing its percentages with your management worksheet. A concentration view based on a particular billing measure should not automatically be treated as the firm's complete accounting revenue. Confirm the period, coverage, and source associations, and investigate missing or unexpected amounts.
Keeney Analytics describes concentration in the synced records; it does not predict client retention or future instructions. The relationship partner still needs to explain the matters behind the figures and any known changes in expected work.
Choose one growth action that fits the firm
The response need not be to reduce service to a valuable client. It might be a focused effort to develop suitable relationships elsewhere, make an existing service easier to discover, or improve continuity within a major relationship so knowledge does not sit with only one person.
Give the chosen action an owner, a manageable allocation of time, and a review date. Track both the effort and what it produces, such as qualified inquiries or suitable new matters. Check delivery capacity before adding commitments that could weaken service to existing clients.
At the next review, compare the same measure and period basis. Ask whether dependence changed because the wider practice grew, because a major project ended, or because records changed. That explanation is what turns a client-share calculation into a useful growth decision.