What to Do When Closing Your Law Firm
You've hung your shingle. Now it's time to take it down. Whether you're retiring, moving across the country, joining another firm, or giving up on the law, you've decided to shutter your firm.
But closing a law firm isn't like shutting down any other business. You still have ethical responsibilities to take care of when closing up shop. Here's what you should do.
Step One: Check With Your Bar Association
Don't worry, you're not the first attorney to have closed a firm. And most state and local bar associations will have guidance available. The Illinois Attorney Review and Disciplinary Commission, for example, has a great guide for lawyers in the Land of Lincoln, complete with an appendix full of check lists, sample client letters, and other resources. The California Bar Association, too, offers a simple, helpful guide on how to responsibly close your practice.
The Basics: Secure Client Files
While you'll want to research the ethical duties specific to your jurisdiction, there are a few broad patterns that all attorneys can follow when closing up shop. First, you'll need to get a handle on existing client matters. Gather and review all your client files. Note what the status of each file is, what fee agreement applies, and whether any matters remain open. Create a timeline for handling each of your open files before you close your practice -- or how you will hand off that work to other attorneys.
Deal With Client Trust Accounts
One of the most critical parts of closing your practice is dealing with any funds held in a client trust account. Start by reconciling those accounts. Start by determining which funds are earmarked for future work. If that's not all the funds, the remainder will likely have to be refunded to the client. (After all, you're allowed to collect advance payment, but you have to return any unearned portion.)
Once that is done, you can begin closing accounts. Make sure, however, that you retain your account records and inform your bar association that you've closed your trust account.
Letting People Know and Wrapping It All Up
One of the harder parts of shutting down a firm is letting everyone know. This includes your clients, who will need adequate time to find new representation. But this also includes your employees, who may be forced to find new work.
Finally, there's the business minutia you'll have to finalize. This includes ending your lease, closing your utility accounts, modifying your malpractice insurance, and even finding storage for your files.
It's a lot to do, but once you've got it done you can walk away knowing that you closed your firm doing everything right.
Want to know what the job market is like in your area? Check out salary data, job trends, or resumes on Indeed.
Related Resources:
- Closing a Solo Practice: An Exit To-Do List (ABA's Law Practice Magazine)
- Is Business Slow for Your Solo Practice? Here's What to Do. (FindLaw's Strategist)
- 5 Best Ways to Improve Your Lawyer Marketing, on the Cheap (FindLaw's Strategist)
- 5 Steps to Take Before Selling Your Solo Practice (FindLaw's Strategist)
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