Lawyer Continuity - Lawyer Exit Plans
"Every Exit is an Entrance Somewhere Else"
- Tom Stoppard
How many of us, as solo and small firm practitioners, have counseled clients on the importance of securing the future of their loved ones in case of a disability or a death? How many of those who represent small business owners emphasize the importance of having a succession plan, of securing their ongoing business and their customers? Over the years we have, perhaps, drafted hundreds of "buy-out" and "disability" clauses, represented dozens of estates, prepared wills and counseled our clients when they faced disputes with their deceased partners' families who tried to continue to run the business without having any idea of what it involved.
Yet, despite lending our learned advice to our clients and their families, many of us remain hopelessly lax in planning our own professional exit, whether it is voluntary such as retirement, or sudden, such as in cases of disability or death.
Indeed, a death or a prolonged disability of a solo practitioner often presents enormous problems for that person's family, clients and those who try to help them, and may expose his or her estate and family to liability. Although there are no specific requirements mandating an attorney to take steps to protect his/her clients in case of that lawyer's sudden inability to practice law, several Disciplinary Rules of the Code of Professional Responsibility address likely consequences of an attorney's death or disability. For instance, if the attorney does not have an exit strategy, his cases may become "neglected", violating DR 6-101 (A)(3), or his client's funds and/or property may not be promptly returned, implicating DR 9-102(C)(4). Bar associations regularly receive phone calls and complaints from clients who cannot access their files, obtain original wills or get any information on the status of their cases because their lawyer has become disabled, died or simply cannot be found. Although efforts have been made to find attorneys who would temporarily take over a deceased or disabled lawyer's practice, the ability of a "caretaker attorney" to be successful directly depends on how thoroughly the original lawyer has kept the files and whether he/she had left instructions on how the business would function in his/her absence.
In 1992 the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 92-369, entitled "Disposition of Deceased Sole Practitioners' Client Files and Property." The ABA opinion addressed the need for a lawyer to have a plan in place which would protect his client's interests in the event of the lawyer's death and provide guidance for the "caretaker attorney" who assumes responsibility for the deceased lawyer's files. In years to follow several bar associations have issued their own opinions addressing situations in which a lawyer dies or becomes disabled. Many of them are cited in an article published by ABA in their March 2006 Newsletter. (www.abanet.org/media/youraba/200603/article01.html). To view some of the New York Opinions click on the following two links:
- http://www.nysba.org/AM/Template.cfm?Section=EthicsOpinions&TEMPLATE =/CM/ContentDisplay.cfm&CONTENTID=5391;
In 2005 the New York State Bar Association's Committee on Law Practice Continuity published a Guide entitled "Planning Ahead: Establish an Advance Exit Plan to Protect Your Clients' Interests in the Event of Your Disability, Retirement or Death."
The Guide addresses concerns of both planning attorneys and those who are called upon to respond in view of their disability, retirement or death. The Guide outlines a 4 Step Plan for Exiting a Law Practice as follows:
Step 1: Designation of an Assisting Attorney;
Step 2: Preparation of Written Instructions for the Assisting Attorney, family, executor and staff;
Step 3: Discussion of the Advance Exit Plan with the people listed in Step 2; and
Step 4: Description of the financial arrangements made with the Assisting Attorney, which may include medical authorizations to determine incapacity to continue in practice, and authorizations to notify others about the closure of the practice or to obtain extensions of time in active litigation maters.
The Guide also contains exit strategy checklists for attorneys, which help them close their own office, close another attorney's office as well as authorizations and agreements. To view the entire Guide with the checklists click here:
Many of us, especially solo practitioners, spend years helping clients make responsible choices. Often, however, we put our own responsibilities at the very bottom of our "TO DO" list, and day after day, year after year, we simply move that task to the following day. While it often makes us feel uneasy to think about the circumstances that would make us unable to practice law, we should heed the advice we so often give to our clients and develop and implement an Exit Strategy Plan now. Doing so will not only ensure a graceful exit but will also help our competence and professionalism triumph over our mortality.
Alla Roytberg, Esq.
Director of the Small Law Firm Center at the NYC Bar