Succession Planning

Every bar association has repeatedly encouraged attorneys to plan for the cessation of their practice caused by their death or disability. All too often, this advice is ignored. While certainly such neglect can be a source of concern and conflict for an attorney’s survivors, the most deleterious, even catastrophic, effects are on the attorney’s clients. Although estate planning that addresses the needs of one’s survivors is to be commended, succession planning for the benefit of one’s clients and for the smooth transition of one’s practice is an ethical imperative.

The ABA Standing Committee on Ethics and Professional Responsibility recognized in Formal Opinion 92-369:

The death of a sole practitioner could have serious effects on…clients…. Important client matters, such as court dates, statutes of limitations, or document filings, could be neglected until the clients discovered that their lawyer has died.

That Opinion notes that at a minimum, a succession plan should designate another attorney who would have the authority to review client files and who would determine the need for immediate action. That lawyer would accept the responsibility for contacting the firm’s clients about the death or disability of their attorney.

Although no Maryland Rule expressly requires that an attorney plan for her departure from practice, Comment 5 of Rule 19-301.3 of the Maryland Rules of Professional Conduct states:

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 attorney to review client files, notify each client of the lawyer’s death or disability, and determine whether there is a need for immediate protective action.

That Comment also notes that Rule 19-734 contemplates the appointment of a conservator through the Office of Bar Counsel to take appropriate action to protect the attorney’s clients in the absence of a plan to protect their interests. Thus, there is a distinct possibility that the interests of a disabled or deceased attorney’s clients will be addressed by a total stranger to the matter.

While the Ethics Opinions and the Comment to Rule 19-301 speak about sole practitioners, it should be obvious that every attorney with responsibilities to clients should have a succession plan. In multi-lawyer firms, cessation or prolonged interruption of an attorney’s practice should be addressed in an operations manual. Lawyers in space-sharing arrangements should not be lulled into the belief that an officemate will assume responsibilities for open client files after death or disability occurs. Unless formal arrangements have been made, “officemates” have no legal authority to access the files or financial records of the deceased or disabled attorney. A lawyer who is not disabled, but who is contemplating her retirement or seeks to close her practice, should address the issues with a succession plan, as well.

Simply stated, a plan is a list of steps that should be taken that will ameliorate the problems that will occur when the attorney becomes disabled or dies. The success of a succession plan, in many ways, depends on how well the attorney’s firm is run before there is an emergency. The easier it is for the successor attorney to step into the shoes of the departed attorney, the more likely the results for the clients will be positive. The firm should have in place written procedures that permit the rapid production of a list of clients and their contact information; deadlines and follow-up dates calendared; time and billing records that are understandable and up-to-date; and clear identification of original client documents. Any succession plan should seek to protect client confidentiality, and should set forth the scope and responsibilities of the substitute attorney’s role and her remuneration. Access to the lawyer’s trust account should be arranged and clients apprised of that arrangement and the plan for succession as well.

If you die or become disabled, will your clients be fully protected? How will your successors be paid? If you’re unsure of the answers, can you be sure that your estate won’t be burdened with claims? Will your hard-won reputation be diminished? Succession planning should be considered a basic part of the practice of law – an obligation to one’s clients and to the profession itself. We, at Eccleston & Wolf, can help attorneys address the issues associated with the cessation of practice.