This leads to the Security Trap. The propensity to take smaller matters with less desirable clients is self perpetuating because people tend to associate with others like themselves. If you have a passive marketing approach, these undesirable clients become your only source of referrals. You are forced to continue the cycle. This is especially true of sole practitioners and small firms who operate on tight budgets.
Large firms can also get trapped, but in a different way.
Larger firms often rely too heavily on a few rainmakers to cultivate business. As the firm grows, so do the expenses, and more pressure is placed on the rainmakers to bring in business. Soon they are bringing in a disproportionate percentage of the revenues. When an important partner leaves or retires, large chunks of revenue are stripped from the firm and no one knows how to replace it. Expenses are still high but now revenues are dramatically reduced.