Succession Planning and Law Firms: Are You Covered?
Few among us enjoy planning for the worst-case scenario. But, lawyers do this for their clients every day, examining every possibility to determine the best course of action. Those who run their own firms need to do the same for their business by creating a succession plan. Who will take over? How will clients be notified? What bills will need to be paid?
A thorough succession plan answers these questions and more.
What Should Be In a Law Firm Succession Plan?
Many of the rules of professional responsibility come into play when it's time to hand over the keys to the castle - rules of diligence, sale of a law practice, and appointment of counsel to name a few. The rules don't always explicitly address succession, however, so we have to rely on the comments and other guidance.
The ABA recommends the following be a part of the succession plan for a law firm:
- Written instructions on accessing client information
- Bank account information (for both operating and trust accounts)
- Instructions on accessing computers and voicemail
- How current liabilities should be paid
- Information about any contracts or equipment leases for the firm
- How successors should be compensated for taking over the firm
Of course, much of this information should be kept private until it is needed. Keeping it all in one place with a password your successor knows can help keep it safe.
Succession Plans For Solo Attorneys
Creating a succession plan is essential for any attorney with ownership in their law firm. But for those in solo practice, it is even more important. Rule 1.3 Comment 5 of the Model Rules requires solo lawyers to designate another attorney to review files, notify clients of the lawyer's death or disability, and determine whether protective action is necessary.
It can be difficult to wrap our heads around introducing clients to a successor, or relinquishing control of the business. However, the alternative is leaving clients in the lurch should the worst happen. Having a plan can provide peace of mind to both attorney and client.
- Succession Planning for Small Businesses (FindLaw's Small Business Law)
- Succession Planning and Heading to Retirement for Solo Lawyers (FindLaw's Strategist)
- Naming Your Law Firm Without Breaking the Rules (FindLaw's Strategist)
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