Protecting Your Client’s Interest in the Event of Disability, Retirement or Death

For many attorneys, the concept of no longer practicing law is a foreign one. Attorneys rightfully take pride in their longevity and reliability and are often focused on their next case instead of future planning. The practice of law is demanding and can easily keep one from assessing long-term goals or considerations. Often, not practicing law, whether it be for a limited time or permanently, is not on one’s personal radar.

The reality is that someday each of us will cease practicing law and this may take place with little to no notice if it involves disability or death or even in instances of a sudden retirement. Likewise, attorneys occasionally find themselves needing to cease practicing temporarily due to illness, accident or injury or impairment.

Whether foreseen or not, the personal and professional impact on the attorney, fellow partners and associates, support staff and families are obvious when an attorney is unavailable to go forward on a case. But what of the clients? What are clients, many of whom do not have a backup plan, supposed to do when their attorney is suddenly unavailable, whether permanently or temporarily?

What about those clients whose attorney is a solo practitioner where there is likely to be less assistance in such circumstances and possibly not even support staff to contact? The clients of a solo practitioner are particularly vulnerable, but members of partnerships or larger firms need to also take note.

Let us be reminded that when a client hires an attorney the client is placing trust in the attorney to protect their interests, safeguard their property and map out a strategy to secure their future. Our obligations to our clients are set forth in the rules of professional conduct in the jurisdiction where the attorney practices, most of which are based at least in part upon the ABA Model Rules of Professional Conduct. For example, in my home jurisdiction of Mississippi there is no direct requirement that an attorney “plan ahead,” but the Mississippi Rules of Professional Conduct related to competence (1.1), diligence (1.3), communication (1.4), safekeeping property (1.15) and declining or terminating representation (1.16) all come into play and ultimately should encourage each attorney to engage in succession planning to protect the interests of their clients. Your jurisdiction may have a succession planning requirement, but whether it is mandatory or not to name successor attorney(s) where you are licensed to practice, it remains a recommended approach.

The Mississippi Bar issued it’s “Planning Ahead Manual” in 2017 in an effort to provide attorneys with a guide on what steps to take in advance to prepare for the possibility of their law practice and clients being impacted due to the attorney’s disability, retirement or death. This concept is not new and The Mississippi Bar benefited from the quality work that had been done by other jurisdictions as well as the assembling of experienced attorneys, judges and other experts in an effort to provide a direct and relatively concise document that can aid the attorney in planning ahead as well as be a guide for any subsequent attorney involved in the closing or temporary pause of an attorney’s practice.

Using the ABA Model Rules as a guide, let’s take a brief look at each of these rules and how they can apply to our obligation to engage in succession planning to protect our client’s interests.

Rule 1.1 Competence. Rule 1.1 requires a lawyer to provide competent representation to a client. Competent representation includes having the legal knowledge, thoroughness and preparation reasonably necessary for the representation. Is it foreseeable that an attorney may have a temporary or permanent pause of their law practice? An argument can be made that the concept of thoroughness and preparation would include being prepared for an instance where the attorney is not available to proceed and have a backup plan in place.

Rule 1.3 Diligence. Rule 1.3 requires a lawyer to act with reasonable diligence and promptness in representing a client. Diligence demands that the attorney be prepared for an interruption of their law practice and have a plan to protect their client’s interests.

Rule 1.4 Communication. Rule 1.4 requires in part that a lawyer reasonably consult with the client about the means by which the client's objectives are to be accomplished, keep the client reasonably informed about the status of the matter and promptly comply with reasonable requests for information. Should the lawyer be unavailable to proceed due to an interruption in their ability to practice law, a plan is needed to go forward including informing the client of the situation.

Rule 1.15 Safekeeping Property. Rule 1.15, generally referred to as the “trust account rule” addresses the safekeeping of client funds and property. It requires lawyers to hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Other property is to be identified as such and appropriately safeguarded.

This rule also requires that the attorney, upon receiving funds or other property in which a client or third person has an interest, to promptly notify the client or third person. Should there be an instance where the lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.

In an instance where the lawyer is not available to proceed, the issue of fees and client property can immediately arise and leave the client scrambling to find a solution both monetarily and in hiring new counsel. Access to their unearned fees is often a paramount consideration. Having a well-organized lawyer trust account and a record of any non-monetary property is crucial to the client being able to transition their case to new counsel, if needed, and press forward on the underlying case.

Rule 1.16 Declining or Terminating Representation. Rule 1.16 provides in part that the lawyer withdraw from representation if the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client. The rule also requires that upon termination of representation, regardless of reason, that a lawyer take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allow time for employment of other counsel, surrender papers and property to which the client is entitled and refund any advance payment of fee or expense that has not been earned or incurred.

So how does succession planning work? Ideally each attorney would arrange with another attorney to act as an “assisting attorney” for the closing of their law office in the event of death or disability. This attorney could serve as “inventory attorney” who has the authority to review client files, make determinations as to the immediate actions needed on every active client file and notify clients of the lawyer’s death or inability to practice law due to permanent or temporary disability. Another option would be to have a “successor attorney” who would be equipped with the same authority as the inventory attorney but is an attorney who also intends to continue or take over the law practice.

For the attorney engaged in succession planning, it is recommended that they enter into an agreement with the assisting attorney, who would allow them to transfer client files, sign checks on the attorney’s general account and close the practice in the event of death or disability. This agreement could also include provisions for the appointment of an “authorized signer” on your lawyer trust account (preferably someone other than the assisting attorney for checks and balances purposes) or give the successor attorney the option to purchase the law practice.

The first step is to identify an attorney whom you trust to close or temporarily manage your law practice in the event of your death, disability, impairment or incapacity. In making this decision, the attorney should consider the various practice areas in which they engage. Naming just one attorney may not be sufficient, depending upon the complexity of your law practice. For example, it may make sense to have one assisting attorney for your domestic relations cases and another for personal injury cases. This need is easy to see for a solo practitioner, but members of a partnership or larger firm should take note of their practice areas before assuming that the law partner or firm members can just pick up their files and go forward.

Once you have identified the assisting attorney(s) it is time to establish the scope of the assisting attorney’s duties. Special consideration should be given to ensure that the assisting attorney is aware of any possible conflicts of interest if the assisting attorney will be providing legal services to your clients or must review a confidential file in order to transfer the client’s file.

Access to the lawyer trust account is admittedly a tricky proposition. The need for access is apparent as clients will contact your law office seeking their unearned fees to go forward with their legal matter. Conversely, allowing anyone access to your lawyer trust account is a serious matter. It is recommended that you consider all your options and weigh the relative risks and make the best choice you can. Client notification is also important. One consideration is to include the assisting attorney notification as part of your employment contract with the client, so they know who to contact.

Other commonsense recommendations include ensuring that your office procedures manual is up to date, keeping a good calendaring system of deadlines and follow-up dates, thoroughly documenting client files, keeping billing and time records current, familiarizing the assisting attorney with your office systems and renewing your written agreement with the assisting attorney and authorized signer each year.

Regardless of the underlying circumstances, each attorney should undertake succession planning––not just for their own interests or that of their families or law office employees, but also for the protection and best interests of their clients.