Planning for the Unexpected

Today, MyShingle is pleased to host this guest post by Roy Ginsburg. Other posts authored by Roy at MyShingle are available here. 

A frequent complaint of solo practitioners is that since they are alone and in charge, it is difficult to get away for a vacation.  But somehow, most seem to manage by finding another lawyer to cover for them should there be an emergency type of situation. That’s easy to do because the vacation is planned. But what if you are taken away from your practice for something that is not planned? What if you are incapacitated or even die from an accident? Do you have another lawyer to cover for you under these circumstances?

The Rules require it

For solo practitioners, having a contingency plan is crucial. As an initial matter, it is ethically required.  Attorneys are usually well aware of Model Rule of Professional Conduct 1.3’s directive that “a lawyer shall act with reasonable diligence and promptness in representing a client.” However, they are usually not aware of Comment 5 to that rule which 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 lawyer 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.

Although the Comment states that having a plan is not mandatory, one would be hard pressed to imagine a scenario where a solo practitioner would not need one.

A variety of practical reasons support the Comment. A contingency plan protects client interests. It also prevents unnecessary headaches for relatives, colleagues and judges who, without a plan, are frequently tasked to pick up the mess. Along the same lines, if the mess is not properly addressed, there is always the potential for a misconduct or malpractice claim. 

What to do 

Step one is to find another attorney who is willing and capable to either take over the practice or close it down. The first person to consider is probably the same lawyer who covers for you while on vacation.  If you trust them with that responsibility, chances are you can trust them for this more important role.

Perhaps the most important duty for the designated successor lawyer is the disposition of client files. All client matters should be promptly reviewed for purposes of:

• Notifying clients
• Transferring files to other lawyers
• Seeking extensions for deadlines when necessary

The successor attorney should also be authorized to handle financial matters. That would include providing clients with a final accounting and statement, collecting fees and selling or liquidating the practice. Access to trust accounts should also be considered, whether that access is general or contingent upon the occurrence of an event. If such arrangements are not made, clients’ money will be tied up until a court order is secured.

Make sure the successor attorney is familiar with office policies and procedures, including calendaring, conflicts, accounting and file systems. They should also be provided with computer passwords, location and account numbers for bank accounts, and contact information for staff, if any, and key vendors.

Of course, all of this should be put in writing. Retainer agreements should inform clients of the successor attorney agreement. This provides the needed client consent for the successor to have access to confidential information and avoids any conflicts of interest that could arise down the road. Besides informing clients, it is also advisable to inform staff, spouse or close living relative, personal representative of your estate and malpractice carrier of the existence of the agreement and contact information of the successor attorney.

Contingency planning is also simply more than organizing information for future use. It is also about organizing one’s practice in the present. The more organized the practice is if a successor is ever needed, the smoother and less expensive it will be to wind down the practice. Moreover, an organized practice is a more marketable and valuable practice, should a sale of the practice be a realistic option.

Just do it! 

Lawyers are trained to think of worst case scenarios in order to best protect their clients. Contingency plans, of course do that, but they also protect loved ones, as well as others. Admittedly, it is not always easy to create a plan where the worst case scenario involves you personally, but that’s no excuse to delay creating one.