You Must Protect Your “B.O.B.” (Book Of Business, That Is)

“Do not protect yourself by fences,
but rather by friends.”

– Czech Proverb

ACTUAL “CASE HISTORY: Valerie was the kind of person who made friends – and customers – easily. She smiled a lot, conveyed honesty, had a caring nature, was attentive to people’s needs, and followed up on every possible lead that came her way. Working from home as an independent insurance representative selling long-term care policies of several insurers, she did quite well. Her book of business – what some people call a “B.O.B.” – had grown steadily over the years.

Through mutual acquaintances, Valerie got to know the three owners of a local insurance agency. Eventually, she was asked if she would like to join their firm. The basic deal offered to her was this: “Join our team, and after two years of working together, if things go well, you will become one of four owners, without any investment on your part.” Valerie saw this as a way to move up in her industry, have back-office staff to assist her, and eventually be able to take a bit more time for herself and her family.

After papers were signed, Valerie became the firm’s “specialist” in long-term care policies. As she envisioned, the agency’s office staff supported her client relations and a younger sales representative was appointed her assistant. And, too, Valerie did take more time off to be with her family, because support staff and her sales representative assistant became known to, and trusted by, her customers.

After the first year, though, Valerie noticed she was not being invited to partner meetings, as she had been during the first year. And, too, she noticed that when she asked for sales reports, they were often not complete and never given to her promptly, as they had been during the first year. What troubled her the most, though, was that her sale representative assistant was starting to counsel her clients, and close deals with her clients, without involving her. Sometimes without even telling her.

Soon after Valerie objected, a partnership meeting was scheduled, and she was told that these were now “company clients,” and not her clients. She was told that they were now “company accounts,” not her accounts. And that these were now “company relationships,” not her relationships. She shared her view that “This was definitely not the deal.” Soon thereafter, though, she was given formal notice to leave the firm, and that she would receive a severance of three months’ of partner draws, which is what the papers provided for. That was just fine with Valerie, because if they were not going to honor the deal she believed they made – during many discussions – then she would rather be back on her own again.

But three big problems arose: (1) She was sent a formal letter reminding her that the papers she had signed had included a one-year non-compete provision that was to be effective if she was ever to leave the firm. Valerie thought her lawyer would take care of that. (2) Valerie no longer had any of her clients’ insurance files, as they had become entirely integrated into the firm’s computer network, and she had no hard copies. (3) Worst of all, many of her clients now seemed quite happy to remain clients of the firm because they had grown so close with Valerie’s Sales Representative Assistant and the firm’s support staff.

Simply put, Valerie had somehow managed to lose her “Book of Business,” her “stock in trade” developed and cultivated over many years, and had to start over again – from “scratch.”

LESSON TO LEARN: There will always be some people out there who will steal from you if you let them, and in business “stealing” clients has been going on for thousands of years. If your job is “customer-facing,” that is, related to sales, service, or business development, sooner or later you will come to recognize how important it is to Protect Your B.O.B.

You can learn how to Protect Your “B.O.B.” the “easy, inexpensive way,” or as Valerie did, that is, the “hard and expensive way.” As relationships are the heart of business, at all times you must always be on guard not to leave yourself vulnerable to losing the valuable good will and reservoir of trust you have built up over many years, for it may be your most valuable income-producing asset in employment and business. And even those whose jobs are not “customer-facing” have a “B.O.B.” of their own.

WHAT YOU CAN DO: In many ways, every employee – and surely every employee who interfaces with customers – has his or her own business “franchise” that needs to be protected. That “franchise” is comprised of his or her clients and customers who believe in them, trust them, feel better about being affiliated with the company because of them, and would prefer to continue to do business with them in the future. As the saying goes, “Trust is the residue of promises fulfilled.”

Business is a whole lot about relationships, and your financial success, job security and value to employers may well depend on your always “Protecting Your B.O.B.” or your Book of Business. Here are 10 ways to help you do just that:

1. It is important to recognize that no one “owns” a business relation, although we all would like to. If you have developed a business relation before you begin a job, you feel like you own it. If you develop a business relation while on a job, your employer feels like he or she owns it. The truth is that no one can own a relation. What smart business people do is: (a) recognize the value of relations in business, (b) seek to preserve and protect the value of relations in business, and (c) resist others’ attempts to take from you the potential value of relations in business. That is what you need to do, too.

2. Maintain and update your own contact list of clients and customers you have assisted, and those you believe you may serve in the future, on your personal computer or equivalent – at home. As a regular practice, keep a list of clients or customers you have served, and keep it on your home computer or its equivalent. Of course, you should not use email to do so. It could even be in the form of a holiday card list. First, this helps keep you aware and alert to the immense value to you that each such person represents. Second, you can use your list to ensure you keep in touch with each one of your clients and customers on a regular basis, so none of them “forgets your name.” Third, your list is safe and secure at home – on your personal equipment and under your control – if your employment should end suddenly.

This should be done day by day, name by name, week by week. If done shortly before or at the time of your resignation, it could then appear to be theft of a customer list. It should include others, too, including neighbors, congregants at your house of worship, even family members who you may have given friendly advice to and consider prospective customers. It is yours, never to be shared with anyone without first obtaining written legal protections that it will not be used without your consent, as explained below.

3. If taking a new job, consider proactively raising your right to continue serving your pre-existing clients and customers if you were ever to leave. The idea is simple: Valerie, above, lost her right to continue serving “her” clients if she ever left. She would have been wiser to have said, in effect, in the beginning of discussions, “If I ever were to leave, for any reason, I must be able to continue to serve and solicit my existing clients and customers” as a pre-existing asset I bring with me, and in that circumstance I expect to take with me.” Surely, this could have killed Valerie’s deal, but better a dead deal than a lost B.O.B.

If you feel you have the leverage, you might even consider asking for what I call a “reverse non-compete,” which is shorthand for “If I ever leave the company, the company will not serve or solicit my pre-existing clients and customers.”

But, see the important precaution in Section 5, below.

Protect your “B.O.B.” (Book of Business)!! To keep “your” clients or customers yours, and not your employer’s, we offer our Model Memo “B.O.B. Protection Package.” Shows you “What to Say, and How to Say It.™ To obtain your copy, [click here.] Delivered by Email – Instantly!

4. Always try to “carve out” existing relations from the non-compete’s and non-solicitation provisions you are asked to sign. If and when you are considering a new job, bear in mind that your future employer will inevitably view its business relations as something it owns, and that sooner or later it will view your pre-existing business relations as something it owns, as well. If and when you accept employment, or during employment, if you are asked to sign an offer letter, employment agreement, non-competition agreement, non-solicitation agreement, or any other document, look it over carefully for any provisions that might restrict your “serving or soliciting” any clients or customers, or “affiliating with competitors,” because that would likely entail your “serving or soliciting” them, too.

But, see the important precaution is Section 5, below.

Our “B.O.B. Protection Package” contains language to help you do these things, too. Just [click here.] Delivered by Email – Instantly!

5. Keep your client list “close to your vest” unless and until part of a written agreement with legal safeguards. Even if you want to protect your own client list, as described in Sections 3 and 4, above, don’t share it until AFTER you have worked out – in writing – all of precautions you need to protect yourself from your employer using your client list for its own interests, or sharing it with others. That is, make it clear that you have a “proprietary interest” in that list, and that it is to be kept confidential by your employer. We generally do this by agreeing, first, to the fact that it is proprietary and confidential, and that in all events it is not to be used or shared without your written permission, and then – and only then, after the agreement is signed – do we recommend it be shared.

6. Keep your client files “near” you, and somewhat “restricted” to others. You need not keep your client files locked up, but maintaining a quiet lookout for who is working on those files, what they are doing for those clients, and whether you are part of the process, is critically important. If you don’t do these things, others might just get closer to your clients than you are, and that could spell big trouble in the future, especially if you ever left the company.

7. On a regular basis, casually observe your partners and assistants: might they be developing stronger relations with your clients than your own? Whether intentionally or by mere chance, others may act to weaken your strong relations with some of your clients when they meet and serve them. That is, to a degree, to be expected. However, in the event you believe it may be serving to weaken your “grip” on your B.O.B., you should always step in and make sure you are the person who is identified by your clients as the one person whose services and counsel they need, above others.

8. Consider a “runoff” agreement or provision. If you propose an agreement by which your clients will always remain your clients, and it is rejected, then as an alternative consider proposing that, for example, (a) your clients will be your clients in all events for one year, or until you are, for example, named a full partner, (b) should you leave for any reason, you will be paid two thirds of the fees they bring in during the second year, and (c) then, one third of the fees they bring in during the third year. We commonly refer to this as a “runoff” agreement or provision.

9. Consider a “pay for” agreement or provision. If you propose an agreement by which your clients will always remain your clients, and it is rejected, then as another alternative consider proposing that, if you should leave, and, say, 6 of your clients stay on after you have left, then for each client you would be paid either (a) a fixed amount, say $10,000, or (b) a fixed percentage of the fees they bring in, say 20% for three years. We commonly refer to this as a “pay for” agreement or provision.

Our “B.O.B. Protection Package” contains language to help you do these things, too. Just [click here.] Delivered by Email – Instantly!

10. Even those who are not involved with sales have a “B.O.B.” Many of my clients tell me that their positions are not client-facing, so they don’t have a “B.O.B.” that needs protecting. I wholeheartedly disagree. If you have strong relations with, as examples, (a) vendors of IT services, (b) logistics consultants, (c) the best florists, or perhaps (c) materials suppliers, who make you more effective and productive in your field, those people constitute your “B.O.B.” and those relations should be appreciated, cultivated and protected, just as if they were customers or clients, in light of the extra value they give you in your work and career.

P.S.: Did you know that, if you enroll as a SkloverWorkingWisdom Member, you get a 10% DISCOUNT on ALL OUR MODEL MEMOS AND LETTERS? . . . Membership is No charge. No obligation. No kidding. Just [click here.]

SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation and navigation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. We strive to help you understand what is commonly before you – traps and pitfalls, included – and to avoid the likely bumps in the road. Understanding how to “Protect Your B.O.B.” is an important part of that process.

Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” That’s what SkloverWorkingWisdom™ is all about.

*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.

Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.

Sklover Working Wisdom™ is a trademarked newsletter publication of Alan L. Sklover, of Sklover & Company, LLC, a law firm dedicated to the counsel and representation of employees in matters of their employment, compensation and severance. Nothing expressed in this material constitutes legal advice. Please note that Mr. Sklover is admitted to practice in the state of New York, only. When assisting clients in other jurisdictions, he retains the assistance of local counsel and/or obtains permission of local Courts to appear. Copying, use and/or reproduction of this material in any form or media without prior written permission is strictly prohibited. All rights reserved. For further information, contact Sklover & Company, LLC, 45 Rockefeller Plaza, Suite 2000, New York, New York 10111 (212) 757-5000.

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