Solo Attorneys: Don't Wait to Figure Out Your Succession Plan

The two most common excuses I’ve heard over the years for not having a succession plan in place are these. It’s either “my plan is to die at my desk,” which isn’t a plan at all, or “I just haven’t been able to find the time,” which almost always means they know it should be done but it’s never going to happen. If either excuse rings true for you, now’s the time to start for two reasons.

First, if you happen to be a solo, you really don’t want to leave the headache of having to wind up the practice and trying to figure out what to do with all your closed files to an unsuspecting non-lawyer spouse. In fact, to this day I still get the occasional call from someone who finds themselves in this very situation. One commonality these callers all have is significant distress and anger over being left with a mess they are ill prepared to handle, and which unfortunately can all too easily lead to unintended consequences.

Here's one example of how the failure to plan can end badly. Most attorneys know full well that client property shouldn’t be destroyed prematurely or haphazardly; but of course, non-lawyer spouses often haven’t a clue. And also understand that even if they did, non-lawyer spouses aren’t bound by the rules of professional conduct. The end result is sometimes all closed files are promptly destroyed because the grieving spouse doesn’t know what else to do. Then, after doing so, the spouse comes to learn that one of those destroyed files is needed to properly defend against a claim of malpractice. Making matters worse, the spouse also eventually learns there is no insurance coverage in place because she didn’t know that at the time of passing, she had to contact the malpractice carrier in order to purchase tail coverage. The unintended consequence is the deceased attorney’s estate may end up not being what everyone was counting on it being.

Second, Rule 1.3 of the ABA Model Rules of Professional Conduct addresses diligence. The Rule reads, “A lawyer shall act with reasonable diligence and promptness in representing a client.” This means attorneys are to act with commitment, dedication, and where appropriate even zealous advocacy, workloads are to be reasonable so that all matters can be resolved competently, and that procrastination is an enemy that is to be avoided at all costs. Yet an attorney’s obligations don’t end there. There is an obligation to prevent neglect of a client matter post attorney death or disability. Comment 5 to this rule goes on to state “To prevent neglect of client matters in the event of a sole practitioner’s death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer’s death or disability, and determine if there is a need for immediate protective action.”

Given all that I have seen and experienced as a risk manager over the years, I personally have trouble coming up with a set of circumstances where I would feel comfortable saying no such plan would be required for a solo. The only question for me is how to get there.

Okay, so what do I need to do to create a succession plan?

The most important detail to take care of when planning for your retirement from your practice is designating a successor. This attorney will need to agree to be responsible for administering the winding down of your practice. Again, it’s important to remember that the purpose here is not to try to find someone who is willing to come in and take over your entire practice. It’s about finding someone willing to step in and take the lead in winding down your practice. Keep this distinction in mind because it can help when it comes to trying to find someone willing to take on this important responsibility.

That said, should the unexpected ever happen, this person will need to be able to make rapid decisions and, for a brief period of time, take on some of the responsibilities of an additional practice. This means your designated attorney should be someone who is competent, experienced, and displays the utmost professionalism because this person must be able to be expeditious about notifying clients, conducting file reviews, taking any necessary protective actions, and transitioning files to other attorneys. Your designated attorney should also be someone who is quite familiar with your areas of practice and not likely to have a significant number of conflict concerns arise should they ever need to step in.

An additional benefit of designating a successor attorney (and consider making this a reciprocal designation if both of you are solos) is that this individual can also act as your backup attorney thereby allowing you to take extended absences from your office for work, pleasure, or health reasons. Also, don’t forget to make sure appropriate employees are made aware of who your designated attorney is and how to contact this individual should this ever become necessary.

Once the successor designation process is complete, there are a few other tasks worth doing. Consider providing notice of the existence of and reason for a designated attorney in your fee agreements so clients are aware of the steps you have taken to protect their interests in the event of an emergency.

Develop and maintain an office procedures manual that discusses your calendaring system, conflict system, active file list, open and closed file systems, accounting system, and any other key system. This resource will prove valuable in helping your designated attorney quickly come up to speed on how you run your practice. This is also just one of a number of reasons why it is so important to keep critical systems such as the calendar and conflict system current at all times.

Your designated attorney will need to review all client files as quickly as possible in order to determine if any immediate protective action is necessary. Given this, never get lackadaisical with your file documentation process. The documentation in all files should always be thorough and current. Missteps can all too easily occur as a result of poorly documented files.

Finally, write a letter for the designated attorney that details duties for all employees; includes login instructions to all necessary computers and systems; provides financial details such as location and account numbers for all bank accounts, particularly client trust accounts; and contact information for all staff and principal vendors such as banks, insurance companies, utility companies, and the landlord. In short think about what you would need to know if you were the person coming in to wind down your practice and capture that intellectual capital in a way that will be useful to the designated attorney.

Additional assistance in developing a plan for your death or disability can be found in a handbook published by the Oregon State Bar Professional Liability Fund. This valuable free resource is available online and may also prove quite useful to your designated attorney should their services ever be needed. In the handbook Planning Ahead: A Guide to Protecting Your Clients’ Interests in the Event of Your Disability or Death you will find items such as a checklist for closing another attorney’s office, a sample notice of designated assisting attorney, sample letters to clients, a sample authorization for the transfer of a client file, and much more. Also, be aware that a number of resources based on the materials in this Oregon guide are also available on the websites of a number of other state bars.