How would your law practice fare if you disappeared tomorrow? Is there a plan in place that would permit an associate or colleague to address client and office needs, or would they be left hopelessly digging through unmarked stacks of paper and scribbled notes? Is there a qualified individual who would volunteer to start digging? Due to the aging baby boomer demographic, society is preparing for the greatest transition of power and wealth our country has ever seen, a phenomenon from which lawyers are not immune. In order to address the important issues relating to succession planning, attorneys should be proactive in posing and responding to these questions in their own practice settings.
An attorney without a succession plan can leave colleagues and family members at loose ends after an inevitable, and possibly sudden, departure from practice. Bills must be paid and clients must be served — the practice will not run itself. The cornerstone of any succession plan, therefore, is finding another attorney who is willing and able to either keep the practice afloat or judiciously wind it down in your absence or time of need.
Within small firms, the assisting attorney will typically be another attorney in the firm. Solo practitioners, however, must look outside of their own practice, attentive to their ethical duty to select someone trustworthy and competent. Some bar associations and state agencies, such as the Indiana Clerk of the Supreme Court, have created programs to match a planning attorney to an assisting attorney and also host an online database of these arrangements.
Once the planning attorney selects an assisting attorney, an agreement should be memorialized in a written document, signed by both parties. The agreement should provide all necessary authorizations and charge the assisting attorney with various duties, including, among others:
- Attending to active and inactive client matters;
- Transferring active matters to other attorneys;
- Managing client trust and general accounts;
- Coordinating with the firm's accountant;
- Collecting accounts receivable;
- Paying staff, bills and other firm liabilities;
- Addressing potential malpractice claims;
- Notifying the planning attorney's malpractice insurer;
- Liquidating or selling the practice; and
- Securing compensation for the assisting attorney.
In conjunction with the agreement, the planning attorney should create an office manual, which outlines the major elements of the practice. The manual should explain where files are located, how various systems can be accessed and which banks hold trust and operating accounts.
Preparing for another attorney to step into your shoes after you are gone can present an insurmountable task, but attorneys owe a duty to their clients, colleagues and family to ensure that their practices will not represent a burden to their survivors. Even attorneys planning to retire early, sell their firms or transition to a successor must consider the possibility of a sudden disability, as uncomfortable as this prospect may be. There is no better time than now to take stock, plan ahead and avoid becoming the attorney who failed to expect the unexpected.
Start planning your succession with CNA's resources below. To obtain additional information, tips and risk management strategies for your firm, visit cna.com/professionalservices.