September 01, 2013

A Word to the Wise: What to Expect When You’re Not Expecting to Close a Solo Practice

Robert L. Ostertag

It seems generally acknowledged within our profession that the most burdensome and demanding way to practice law is as a solo general practitioner. What follows is the story of one solo practitioner, my friend Josh, whose workload and dedication to his clients were leading factors in the occurrence of the sudden stroke that left him unable to live meaningfully and unready to die, and of his clients who suffered his loss more than they would have had he merely prepared for his sudden and probably inevitable departure from the scene. Let me provide some background.

Josh and I lunched together almost every Friday for 49 years prior to his ill-fated day a year and a half ago. A soft-spoken, gentle soul, a devoted husband, an extraordinary father of four, grandfather of seven, and a competent real estate lawyer for the most part, he delved infrequently into estate administration and other less-familiar areas only when the economy went dry, as was the case shortly before he was stricken. Josh practiced out of an office he shared amiably with two other attorneys who were his tenants. His real estate clients were residential and commercial buyers and sellers and several banks—a typical small-city, upstate New York practitioner.

In the following account, out of respect for Josh and his family and clients, I have changed his name and have occasionally withheld or embellished facts initially to emphasize a point. But I have substantially related my general experience as I lived it.

Aftermath of a Stroke

Josh’s stroke left him with some critical paralysis on one side from top to bottom. He was hospitalized for over a half year, and of late he’s incurred virtual total paralysis and relatively sudden mental incapacity. He sits in his wheelchair these days unable to move or even to communicate. Despite his advanced years, and strangely inconsistent with his problematic pre-stroke physical condition (he had diabetes, among other maladies), he appears now to be capable of sustaining physical life as a near vegetable for what may prove to be the long term.

I haven’t seen Josh for a while now. Were I to visit, he probably wouldn’t even know me at this point. I might unexpectedly catch him aware, but I don’t want to remember him as he is now. I do see his family. There but for the grace of God, however, go I, or indeed any of us. He is undeserving of all this suffering of which, until recently at least, he was acutely aware.

A Successful Practice, But Not an Organized One

Despite his professional competence and success, and like many (most?) solo practitioners, Josh was not the model of organization and efficiency. He left behind files that were current, files that were not. Some needed, and still need, attention. He left behind an escrow account that lacked, to some extent at least, recorded information that he no doubt had in his head. A few of his escrow accounts required his signature (later, his mark) to protect them from multiyear inactivity transfers to the New York State banking department. While once he could provide his signature, he cannot now, not even his mark. The bank will not accept the signature of his attorney-in-fact (his son), but in attempting to help, I became aware that a $10 deposit would activate such accounts. I’ve made them from my personal funds where necessary to buy time. Since I couldn’t commingle his clients’ escrow funds with my own, those deposits were gifts to his clients, and are not refundable to me. The only acceptable alternative was a petition to the court for a guardianship and limited relief, and in New York, procedurally, that can be a big prolonged deal to be avoided almost at all costs, if possible. As with many things in the law, what used to be simple, no longer is.

How to Help?

I was asked to help and I have. But what to do in such situations? Though not a theoretical novice to the problem, this was real-time virgin territory for me. Who is responsible for a suddenly incapacitated or deceased attorney’s transactional files? Or for his escrow accounts? Or for his litigation or other files that are statutorily limited or otherwise time constrained? Or for the myriad of other considerations that would normally require the attention of an attorney? Is an attorney’s widow, a lay person, free to rummage through his operating or especially his escrow accounts? Or his client’s files? What about clients’ confidences and secrets? What about the rules of professional conduct? Certainly, those restrictive professional considerations are not applicable to lay widows, executors, or administrators. New York City alone has over 105,000 lawyers registered with our state’s Office of Court Administration. Few of them know almost any of the others, and the city’s many judges have active calendars. Who is to notify them? What is to be done about contractual matters as to which times or other considerations are of the essence? What about the attorney’s outstanding liabilities, his receivables, his payables, and even his employees? And what about clients’ wills he had stored in his office for convenience and safekeeping?

There was the initial problem of Josh’s office remaining open for a time, and what to do about his secretary? She stayed on despite Josh’s limited operating account balance. Her salary was eventually covered personally by Josh’s son, and ultimately he assumed her employment in his own business. She still is responsive to my periodic calls for help.

There were bills to be paid—rent, utilities and what not—and some very old client matters to be addressed, even including what for me was one case involving heavy hours of investment pro bono in what was now, but wasn’t always, an existing $800 estate. On and on it went.

A Dearth of Useful Rules

Problems such as these play themselves out every day throughout America. In many jurisdictions, only a few, often-inadequate rules seem to apply. New York itself has few useful rules (some say none at all), though our state bar association presented a complete set of proposed rules and specific guidelines to the state’s Administrative Board of the Courts for consideration and adoption. The Board has had them for about eight years now, but to date, nothing has resulted. While it is not comfortable to think about unforeseen accidents, disability, unplanned retirement, and untimely death, clearly there exists a duty to protect clients, even from one’s own death, particularly if one is a solo practitioner. And if one is and remains a two-person-firm partner and is middle-aged or older, chances are fifty-fifty that one or the other partner will someday, maybe soon, become a solo practitioner. That puts him or her in similar jeopardy. Some 63 percent of the privately practicing bar in the United States are comprised of solo and small-firm practitioners (one to five lawyers); almost half are solo. They are all in jeopardy, and they frequently are too overwhelmed to address their own needs.

The Best Laid Plans

Several years ago I gave Josh a copy of our state bar’s proposed guidelines, together with an abundance of related materials. (I participated eight years ago in the creation of the proposed rules and guidelines. The guidelines contain checklists, frequently asked questions and answers, authorization and agreement forms, notices, sample letters, waivers, minutes, instructions, and much, much more. The book is entitled Planning Ahead: Establish an Advance Exit Plan to Protect Your Clients’ Interests in the Event of Your Disability, Retirement or Death (New York State Bar Association (2005) (hereinafter Planning Ahead Guide or Guide). It is available to any practitioner in America, for free, at http://old.nysba.org/Content/NavigationMenu/Publications/ForSolosPlanningAheadGuide/Planning_Ahead_Guide.htm.) I sat down with Josh one day and pleaded with him to read them all and to implement their proposals. Using the Guide for background, we discussed his need to generate and thereafter maintain active, full, and specific lists (schedules? computer printouts?) of current clients. These would include names, addresses, phone and fax numbers, e-mail addresses, individualized file numbers, key subject matter identifiers, and any other information he might deem appropriate so that clients might readily be located should the need arise. We discussed his need for a similar but separate current list of closed files and former clients, as well as for information about the whereabouts of original documents and how they might be located.

Unfortunately, some of Josh’s files were near catastrophic to me, a stranger to them—ripped up paper; undated notes, each seemingly unrelated to the others; entries on the back sides of advertising mail. Just awful! But these are conditions endemic to many solo and small-firm practitioners, particularly rural attorneys who personally know their clients and maintain significant amounts of information about them and their matters in their heads because they are overworked, underpaid, harried, and harassed, mostly. A precommitment view of such files would discourage any prospective caretaker or successor attorney from becoming involved.

I asked Josh where his closed files were stored and how to access them. Some attorneys maintain files for only those periods of time required by law or rule and are proficient at destroying all closed files as soon as possible—seven years in the case of New York State. Not always a good plan, but one that should always be done with care. Others store their closed files forever. Ugh! They frequently are left for successor attorneys to deal with. Most of Josh’s closed files were in his office.

I referred Josh to that part of our guidelines relating to calendaring systems. He maintained a paper desk calendar for that. I mentioned the caretaker or successor attorney’s need to reach that information quickly. I suggested he set up a computerized tickler system—something better than his desk calendar. He was not computer literate. Malpractice carriers demand a system, and certainly he should have had one. Some lawyers don’t have a system and just lie to their carriers and hope for the best. (Josh didn’t lie.) Dangerous.

We discussed Josh’s financial accounts. Someone, I said, must be able to determine very early on what money remains in his clients’ escrow, and indeed his own operating, accounts, and to whom that money belongs. He acknowledged that his escrow account should and did indicate what had been deposited for each client, but records were Neanderthalic and didn’t always precisely reflect what had been withdrawn, when, and for what purpose, at least as far as I could understand them.

I suggested to Josh the need for him to prearrange with his banks to permit the deposit and withdrawal of escrow and operating funds by an intended caretaker or successor attorney. Josh was then about 79 years of age. I urged also that such arrangements be agreed upon with the bank sooner rather than later and that the identity and location of each of his banks should also be readily available to a caretaker or successor attorney. We agreed that to carry all that to its conclusion, he must preselect a caretaker or successor attorney. The bank would very likely require a name. I suggested that he not select me.

I reminded him of the need for available information on the location of all his tax returns, office or firm contracts, leases, deeds, office equipment information, and anything else pertaining to his office, and, not least of all, to his employee. His secretary, as his sole full-time employee, should ideally know most of the answers.

We discussed his computer system. He had a computer on his desk. He really had no idea how to use it. His secretary had another computer with what might loosely be called a system. I advised him of the need for information on passwords and such other even more secret information that would allow someone to utilize the equipment for the benefit of clients, himself, and such other interests as might be included in the system. He maintained in his head almost all such information, such as, for example, the identity and whereabouts of his computer technician and repair person who, I suggested, would likely have information about his system that might be important but unknown to Josh.

Josh maintained a bank safe deposit box and carried its combination in his wallet.

I suggested that the location of his keys be included in his equipment list, not only to the office door, but to whatever he kept locked in the office. I inquired again about names and addresses of all his suppliers and repair people and the identities of those with whom he might have a special personal or professional relationship who might be helpful in providing important information. Not much response.

I emphasized to Josh that all this required his time and effort, which is why it so infrequently gets accomplished by solos. I told him he was no different than many, perhaps most, other solo and small-firm practitioners in that his office was the key to his family’s financial life and other aspects of their future. I suggested he think of it that way so as to make it less difficult for him to apply himself to the project. But I just knew it wouldn’t get done.

Finally, I urged him to think about selecting a caretaker or successor attorney, one who was obviously a well-respected colleague at the bar; competent; well-regarded professionally, intellectually, and ethically; someone with litigation skills if litigation were to become either a client issue or practice-transfer issue; preferably someone in our small-city community who knew Josh’s family and would be able and willing to take on what would likely be a substantial, intrusive, and time-consuming burden. I again suggested he not think of me. I’m long in the tooth, indeed, older even than he. I’m far beyond retirement age, engaged in my own practice, still actively involved with our state bar association and the ABA, and just not the right person for the task. He promised not to—but I just knew who that person would be.

Lo, Josh never accomplished anything I urged upon him. He took the materials I’d assembled for him and placed them carefully on his credenza—where I found them one day, dusty and seemingly untouched. And what did I do? Having been asked, I volunteered. Dummkopf! But Josh was my friend.

When You’re Not Expecting to Be Successor Attorney

Let me now give you just a brief, real-life glimpse of my own double-duty life over the last year and a half just as an example of what to expect should you choose to take on the burdens of a caretaker or successor attorney—or should you perhaps someday need one but thoughtlessly leave him or her unprepared.

One of my threshold problems was that I did not have Josh’s power of attorney or any other written authority from him to pick up where he left off. Josh’s son, a layman, had his power of attorney, and I obtained from him early on his written authority to protect Josh’s clients and his practice. Whether it might have been better to seek judicial approval and authority, the fact was that I didn’t have time for judges. I understood the risks.

The second problem was that I did not know, and had no way of determining other than to wait it out, whether Josh would ever seek to return to the practice of law despite his infirmity. He was not a quitter. I chose stubbornly, and mistakenly, to assume that he would try to do so if at all humanly possible. But it became suddenly obvious at the eighth or ninth month—after he’d somewhat improved and appeared more attuned to his condition but then suddenly took a serious turn for the worse—that it wouldn’t happen. I suppose I should have discussed with Josh during the early months, while he was lucid and somewhat responsive, what he wanted me to do for his clients and what issues he knew might arise over the course of their representation. He was in such a sudden physical and mental state of shock at the time, however, that neither I nor his family felt it wise to burden him with issues beyond his health, and indeed his life. Accordingly, I withheld all discussions about his office and simply plodded ahead as I thought appropriate. Somehow, things got done, though the hard way. Josh’s family members were ever cooperative—particularly his son, whose own business was flourishing but whose time was as limited as mine.

Josh’s son and I set up an arrangement whereby he took possession of all Josh’s open files and made them available to me for the asking. Did he or any of his three siblings go through those files? I don’t know. I advised him from the beginning—and at length—that he and they shouldn’t. I seriously doubt that they did. But I’m really not certain that I want to know.

I found early on that people who write the professional responsibility rules don’t always understand the practical aspects of practicing law. Many, who frequently have risen from the political ranks, have never practiced law and have no concept of its various complexities. Ethics rules are conceptual niceties, but their implementation occasionally conflicts with the realities of life and simply gets in the way, and one must sometimes make difficult choices.

Overhead costs were always an issue. Financial arrangements had to be made, including those to cover the cost of maintaining his now-unused part of the office until a new occupant could be found, and Josh’s office wasn’t pretty. Moreover, the attorneys sharing his space loomed large. All of that had a practical impact upon the niceties of professional ethics.

Other problems have been multiple in number. These included our fee policies, as opposed to Josh’s, and the need to address them professionally. I have not profited on Josh’s files—nor would I, but some fee issues had to be addressed. Other problems that arose included financial and tax reporting. The continued maintenance of books and records, many of which were deficient and had been for years. The satisfaction of prior financial obligations to vendors, service suppliers and the rest. The handling of open litigation matters, some of which, surprisingly to me, existed in Josh’s practice. Client relationships. Mail. The inventory and examination of open and some closed client files. The safeguarding of original documents. The extension of time limitations. Notifications to courts, counsel, and others. Personnel, his and mine. Insurance coverage. Access to the safe deposit box. Professional liability as between Josh and my office. And on and on and on. Having never before assumed such a responsibility, and despite our Planning Ahead Guide, I was only tangentially aware of all the real-life hazards. At this point, frankly, I would not suggest that anyone take on such a responsibility without first having entered into an informed agreement specifying virtually every reasonable and anticipated responsibility and fiduciary duty, and without having a reasonable familiarity with what is likely to lie ahead were the hammer to fall and the occasion to occur. Josh never asked me to be his caretaker or successor counsel; only his family did, after the fact. But I knew that would have been his preference, the scoundrel. And the family was ever helpful and cooperative, his son particularly.

I have occasionally considered a theoretical reverse situation in which it is I in Josh’s circumstance and he who presented to me the Planning Ahead Guide and other materials several years prior to my own sudden unanticipated disability. Would I have placed it on my credenza as he did, with the intent of someday reading it? Someday when I might become ill in the far distant future? For, after all, none of this would ever befall me!?! I know deep down that I might have relegated the materials to my own credenza. But then, I have partners.

I won’t be here in 30 years; I hope to be in 10, if I’m lucky. If I am, I suspect I’ll still be dealing in one way or another with remnants of Josh’s practice. Hopefully, his and his family’s experience shall never become mine or my family’s. I end with a word to the wise among our solo and at least two-person practitioner readers, particularly our veterans at the bar. Take care of yourselves, your clients, and your families. Address this grim and disagreeable problem. Just do it, now. VOE

 

Editor’s Note: Josh passed away shortly after this article was written. The author writes: “I have never witnessed such suffering. Neither he nor his family deserved this. But he is at peace, finally and forever.”

 

Robert L. Ostertag

Robert L. Ostertag (rostertag@verizon.net) is of counsel to Ostertag, O’Leary, Barrett, and Faulkner in Poughkeepsie, New York, and a past president of the New York State Bar Association.