Kevin Kelly writes another insightful essay on The Technium titled "Looking for Ugly."  Using FAA reporting on aircraft maintenance as his main example, he suggests that when we don't penalize minor infractions (the FAA encourages penalty-free reporting of minor safety errors), we reduce major ones.  Put another way, to avoid major catastrophe, it is important to encourage people to look for and report "the ugly:"

Looking for ugly is a great way to describe a precursor-based error detection system. You are not really searching for failure as much as signs failure will begin. These are less like errors and more like deviations. Offcenter in an unhealthy way. 

I think he's right on.  When evaluating new clients, for example, keep track of those things that don't "feel quite right."  It could be something as simple as the fact that they rescheduled three times, showed up late for an appointment, or "forgot" their retainer check.  While many of those prospects will turn into great clients, the handful of them that don't probably have a lot of those little things in common. 

The more you pay attention to those "little things" as they enter your head (as opposed to using your 20/20 hindsight once the relationship has gone sour) the more likely you'll get better at choosing great clients -- and avoiding the "ugly" ones.