Succession Planning: If You Fail to Plan, Then Plan to Fail
By Louise Watson, Office of Bar Counsel, State Bar of Nevada
Are you a sole practitioner? How would your law practice fare without you tomorrow? Do you have a plan in place for someone to step in to protect your clients’ interests? Or would they be left hopelessly digging through a mountain of paper and computer files? In this time of uncertainty and pandemic, it is more important than ever that lawyers ask themselves these vital questions, but too many attorneys fail to ever consider them.
Many older attorneys have depth of experience and skill, making them perfectly capable of practicing well into their 80s or 90s. However, many of these attorneys fail to plan for their eventual, and possibly sudden, departure from practice. A succession plan can mean the difference between a quick and orderly transition, and a chaos that leaves clients, friends, and family with needless worry, frustration, and anxiety.
A well-conceived plan will protect your clients, but it will also give you the peace of mind that your practice is safe, so you can focus on recovery.
Preparing a plan involves some difficult decisions, but really comprises of three easy steps:
- Identify a lawyer willing to assist you in your practice (“Assisting Attorney”);
- Prepare and execute an Agreement or other documentation that authorizes the Assisting Attorney to step into your practice; and
- Ensure the Assisting Attorney has access to the information they will need to assist in your practice in the event of an emergency.
The level of responsibility that you designate to the Assisting Attorney may vary depending on the level and duration of your incapacity, but you should select someone trustworthy and competent. For competence, select someone familiar with the area of law in which you practice. For example, if you practice criminal law, an Assisting Attorney who only practices in estate planning might not be the best choice.
Once you select an Assisting Attorney, memorialize your succession plan in a written agreement. Set the Assisting Attorney’s duties and scope of authority. This could include:
- Attending to client matters;
- Transferring active matters to other attorneys;
- Managing finances, including client trust and general accounts;
- Notifying your malpractice insurer, the state bar, and the courts;
- Liquidating or selling the practice; and
- Securing compensation for the Assisting Attorney.
The succession agreement should expressly authorize the assisting attorney to contract clients and attend to client matters. This is the most pressing duty of the Assisting Attorney. Rule 1.6 prevents disclosure of client information without consent. However, most agree that disclosure to an Assisting Attorney is “impliedly authorized” and appropriate. Banks will require an executed Power of Attorney in addition to the succession agreement for the Assisting Attorney to gain access to the client trust and other accounts.
Ensure that you provide a copy of the agreement and any other documents to the Assisting Attorney, and that your staff or family members know whom to contact in the case of an emergency. An office procedure manual is an ideal place to keep this information. If you don’t have staff, you should ensure that the Assisting Attorney knows how to access the information that they will need to step into your practice, such as the location of database passwords, client contact information, your calendar, and account numbers.
Once you have an agreement with an Assisting Attorney, you can begin advising your clients about your arrangement. The easiest way to do this is to include language in your retainer agreements to the effect that the client understands that you may enter into an agreement with another attorney to assist in your practice in the event of your impairment, and in such an event, that the Assisting Attorney is permitted to review the client’s file and take whatever steps necessary to protect the client’s rights.
For more detailed information and considerations for preparing your plan, please download the state bar’s free publication, Succession Planning in Nevada, from our website, which includes a sample agreement and other documents.
Ethics rules aside, attorneys owe a duty to their clients, friends, and family to minimize their burden after an attorneys’ death or disability. Whether you plan to retire at 55 or 95, plan for death or disability despite the awkwardness and uncomfortable feelings that it brings. There is no better time than now to plan. As Benjamin Franklin wisely stated, “An ounce of prevention is worth a pound of cure.”