Preparing for the Unexpected & the Inevitable: Law Firm Succession Planning for Disability & Death

Lawyers are notorious for thinking of ways things can go wrong for their clients and then determining the best ways to protect their clients from them. One calamity few lawyers ever consider, however, is their own unexpected disability that puts their career on hold—or worse, their death.

If you’re like most other lawyers out there, you don’t have an incapacity plan or succession plan in place. Let’s see what consequences you’re potentially courting by failing to make these plans.

The Burdens of the Unexpected

If you are a practicing attorney, just think about what would happen if one day, without any warning to anyone, you pass away. Who will be burdened?

• Your grieving spouse and children who immediately will be fielding phone calls and emails from clients who want to know the status of their cases.
• Your clients who, when trying to make contact with questions, will get answers of something along the lines of, “I’m not sure.”
• Your well-intentioned friend, relative or colleague who volunteers to clean up affairs but who has no clue what he or she is doing.
• And, when all else fails, malpractice carriers or regulators may be compelled to act—a cost that is indirectly born by the rest of us in the form of higher premiums or state licensing fees.

The Basics of a Successful Incapacity & Succession Plan

You can avoid these calamitous consequences by taking steps today to create a succession plan that considers both incapacity and death. The best succession plans involve these two items:

• The selection of a successor: someone who is an attorney who can competently take over or wind down your practice. If that’s not possible, the selection of trusted professional colleague, friend or relative who can assist with a wind-down.
• The formalization of the plan by putting it in writing. This can be done through either a power of attorney or some other written agreement.

Moreover, every plan needs to cover answers to these two questions that arise in every practice:

• What do to with active files?
• How to wind down the business aspects of the practice?

Active Legal Matters

Here’s a to-do list that you should memorialize in your written succession plan.

• How to find a list of active files, calendar, deadlines, and appearances so that time-sensitive matters can be identified and properly handled
• How to contact clients, usually with the following options available to clients:
  • Retain the successor attorney, if that successor is competent to handle the matter and there is no conflict
  • Access a list of alternative counsel, if feasible
  • Request the return of their files so they can secure alternative counsel on their own
• How to find and access closed files

Business-Specific Matters

People tend to forget that while solo and small firm lawyers are professional service providers, at the end of the day, they are also small business owners. As such, there are accompanying liabilities and responsibilities above and beyond their professional liabilities and responsibilities that must be tended to upon incapacity or death.

Here’s a checklist to add to your plan that covers the business-related issues involved in a successful succession.

• Information regarding all bank accounts and trust accounts and accompanying records
• Location of any safety deposit box and information on how to access it
• Location of client original documents, if any
• List of owned property (e.g., car, real estate)
• How to access computers, emails, voicemails and any accompanying passwords
• List of vendors, suppliers and malpractice carrier
• List of any contracts with long-term liabilities (e.g., lease, copying machines)
• Location of billing records and accounts receivable
• Record retention policy, if any

Additional Resources

Many malpractice carriers offer information about succession planning and so do many bar associations—many of which can be accessed online.

Have a Plan? Share It!

When an attorney dies, the successor works on the behalf of the deceased law yer’s estate. It is therefore important for the attorney’s heirs to know the identity of the successor and vice versa. Whether you’ve already created a plan or you are starting one as soon as you’re done reading this article, ensure that part of your process includes sharing your completed plan with all relevant parties.

Begin With the End in Mind

Although no doubt some lawyers would vehemently disagree, lawyers still have a 100% mortality rate. Practicing forever is simply not an option. Plan for the unexpected and the inevitable. Without proper planning, your calamity will become your family’s and clients’ calamity. You all deserve better than that.