What happens when an attorney dies or becomes incapacitated? Or, in rare cases, goes missing? As attorneys, we are somewhat notorious for providing our clients with advice that we don't heed ourselves. How many of you have stressed the importance of estate and business succession planning to your clients and have not followed the same advice in your own lives and practice? As I sit here doing research for this article, it's occurred to me that most of my colleagues probably don't have an attorney succession plan in place, even those in my estate and business planning circles of friends. If you are one of those people, particularly if you are a solo or small firm practitioner, my hope is that this article will jolt you into action.
I have broken this paper up into three sections: elements of drafting an attorney succession plan; problems resulting from not having an attorney succession plan in place; and Model Rules on winding up the business of an attorney who is deceased, incapacitated or missing not pending disciplinary proceedings. For sake of ease, I will be referring to the deceased, incapacitated, or missing attorney as the "DIM attorney" and the attorney who assumes the practices as the "assisting attorney."
I. Elements of Drafting an Attorney Succession Plan
Attorney succession planning entails developing a plan for the transition of your law practice in the event that you become incapacitated, die, or go missing. There are several elements involved in drafting a great succession plan, but on a basic level you should 1) appoint a specific attorney or attorneys to take over the practice and 2) put the plan in writing.
A. Choosing the Right Assisting Attorney
When appointing an attorney to take over your practice, selecting an attorney who is competent in your area of law is essential. In addition, you should take into consideration that while you could handle your practice on your own, your assisting attorney won't likely be able to handle both your practice and their own practice at once. In that instance, make sure you appoint multiple attorneys or reserve enough capital for your assisting attorney to be able to hire outside counsel. Finally, while you should appoint someone who is competent in your area of practice, you should also choose someone who will not have multiple conflicts of interest off the bat. For instance, you should not hire a personal injury defense attorney when you do mostly plaintiff's personal injury work. The chances that the defense attorney has represented parties against your own clients become much greater, and conflicts of interest can undermine your entire plan.
In regards to time and competence, I think a great illustration of the issues that a single attorney can face in trying to take over another practice can be found in "Death of Practice: After Attorney Dies, Her Friend is Faced with Closing Down Her Firm." In that 2013 article, the author, Susan A. Berson, interviews Alicia Beeler Villines who was tasked with taking over her friend's firm when the friend passed away. During Susan's interview with Alicia, Alicia recalled that she had met her late attorney friend at a bankruptcy CLE, an area in which they both focused their practice. Alicia explained, however, that when her friend passed away there still were several cases she was unfamiliar with and had to send to other colleagues. She also described her difficulty handling the sheer volume of cases and facing the issue of there being little or no money left to glean and much work to be done, making the cases unattractive commodities and difficult to parcel out. Fortunately, in Alicia's case, several other bankruptcy attorneys pitched in and took the cases on a pro bono basis. Consider, however, the difficulty Alicia would have had, personally, professionally, and financially, had they not.
The point of sharing Alicia's story is to bring to light the different difficulties the assisting attorney may face in assuming the responsibility of your practice so that you prepare for and lighten the burden of such a large load. Consider the multitude of doubling an attorney's practice in one day, the issues of trying to decipher cases you’re completely unfamiliar with, taking over the accounting, managing the current staff, and so on. The more detailed you can make your succession plan and the more assistance you can provide, the better off your assisting attorney will be.
B. Who does the Assisting Attorney Represent?
When choosing an attorney or attorneys to assist in your absence, identify exactly who that assisting attorney is intended to represent: the interests of the DIM attorney or the interests of the DIM attorney's clients? Often those interests align, but in the event that the interests conflict, the assisting attorney should have guidance as to which side they should take. For example, if the assisting attorney discovers malpractice or misappropriation of client funds while transitioning active cases, whose interest is the assisting attorney supposed to protect? Defining the relationship dictates whether the assisting attorney has a duty to report the error to the client, as well as the assisting attorney's own ethical duties.
C. Put it in Writing
You should absolutely put your attorney succession plan in writing. Much like an estate plan, the following is a general list of the elements any attorney succession plan should include:
- Contents of Your Practice. Your plan should list the contents of your practice, including bank accounts, real estate, motor vehicles, property you're holding for your clients, office supplies, files, and anything else your practice may own or contain.
- Persons to Receive the Contents of Your Practice. You should provide the assisting attorney a list of who gets what. If you are holding property for clients, make sure you can direct the assisting attorney to the file that contains those client's information and which property belongs to them. If you have client files, make sure you direct the assisting attorney on where those should go. If you have valuable office furniture, direct the assisting attorney on how they should dispose of it - should she donate the items, sell them and distribute the proceeds to your heirs, give them to the other attorneys you officed with, take it for themselves? Provide a guide for everything.
- Successor Assisting Attorneys. Make sure you list successor assisting attorneys in case your number one pick has found themselves in a DIM situation before you do.
- Compensation of Assisting Attorney. Your assisting attorney should undoubtedly get compensated for their time. Make it clear whether or not they should be assuming your clients together and billing them like you would, or if they will be entitled to a lump sum from your estate.
- Liability of Assisting Attorney. As previously mentioned, make sure you define the assisting attorney's role and specify whether they are acting in on behalf of your clients or you. Also, most assisting attorneys would probably appreciate you limiting their liability to acts in good faith.
- Documents to Maintain. Maintain these documents to help your assisting attorney and keep them in the same binder as your plan:
- A copy of the financial institution's form(s) for IOLTA access by the assisting attorney
- A power of attorney authorizing the assisting attorney to run the business as needed, including as IOLTA signatory
- A list of passwords for computer systems, and bank and other accounts
- An up-to-date chart of all files for transitioning and closure
- Instructions for loved ones and the personal representative of your estate about the designated assisting attorney responsibilities
- Contact information for the designated assisting attorney
- An updated list of law practice contacts (employees, clients, vendors, suppliers, memberships)
- A draft of a letter for the assisting attorney to provide notification to clients about the deceased lawyer
- A draft of a letter from the assisting attorney to clients authorizing release of their files to a new attorney
- The retention rules of your state bar or your personal client file
- Instructions to the personal representative and will provisions corresponding to the duties concerning the closing and/or selling of the practice
II. Problems with not having an Attorney Succession Plan
The people affected when an attorney becomes incapacitated or dies without planning can be innumerable. Consider these following scenarios from Susan A. Berson's article:
Scenario 1: A single 20-something running a virtual office dies in a mountain-climbing accident. The distraught parents are receiving phone calls from the child's clients. With no experience or knowledge of the legal profession, the parents have no way of knowing how to deal with clients who want their files. They are grieving and unable to return calls or find the information the clients need.
Scenario 2: A well-respected attorney dies in a motorcycle accident. The clerk of the court or bar association sends letters to all clients the attorney was listed as representing. But most of those clients are in prison, waiting for the attorney to complete their appeals. Worse, the clients have drained their savings to pay the attorney's retainer. With hearing and statute-of-limitations dates fast approaching, the clients are unable to obtain new counsel without somehow recovering the unused retainer needed to pay the new counsel.
Scenario 3: A widow is grief-stricken. Her breadwinner spouse died suddenly, leaving her with five young children - along with seven file cabinets full of confidential business and client records lacking any instructions about what she is supposed to do with them.
I am interested in these scenarios because as you read them you can immediately start counting issues that the family members and clients may face. Another party not mentioned in these scenarios is the assisting attorney.
All three parties are faced with the same issues - confidentiality and time constraints to name a few. When attorneys die without a plan, statutes of limitations, hearing deadlines, and the like can expire with no retroactive remedy - other than a potential malpractice claim, of course, against the estate of the deceased attorney or against the assisting attorney who simply doesn't have the manpower or time to get through all of the cases in a timely manner. If the client can pursue a malpractice claim against the deceased attorney's estate, assuming there is one, the deceased attorney's loved ones may pay the price. If a malpractice claim is pursued against the assisting attorney, they may end up getting pinned with liability due to no real fault of their own. At minimum, they'll be called to defend themselves against the claim, which requires time and money they shouldn't have to spend.
III. Model Rules on Winding up Business of an Attorney who is Deceased, Incapacitated or Missing not Pending Disciplinary Proceedings
The Model Rules of Professional Conduct and each states Rules of Professional Conduct, provides guidance to attorneys in winding up the business of an attorney who is deceased, incapacitated, or missing. These rules would come into play in the event that the attorney did not have a succession plan in place, or their plan was insufficient for the purpose it was intended to serve (i.e., they appointed an assisting attorney and that attorney predeceased them).
In Oklahoma, Section 1 of Rule 12 directs that in the event an attorney dies, becomes incapacitated, or goes missing, any attorney or law firm with which the attorney was professionally associated, including office arrangements, or any attorney consulted in connection with a deceased attorney's estate or disappearance, shall give notice thereof to the General Counsel of the State Bar Association. A potential issue here is in the case of a solo practitioner. If you recall the 20-something with the virtual law office scenario, the likelihood that a recently-admitted attorney would have the types of professional associations listed above can be pretty slim. Section 1 goes on to state that in the event that any other attorney, including but not limited to, attorneys involved in litigation or transactional activities with the DIM attorney, who becomes aware of an attorney's death, incapacity or disappearance and who believes that such notice has not been given should do so.
Section 2 of Rule 12 discusses the General Counsel role in the event that an attorney dies, becomes incapacitated or goes missing, and is associated with a firm or another legal representative, like a personal representative.
In these cases, the General Counsel shall determine whether a partner or another representative of the DIM attorney can notify and protect the interests of the DIM attorney’s clients. The duties include: addressing the matters that require immediate attention, and notifying all the clients of the attorney’s death, incapacity or apparent disappearance. If the DIM attorney’s practice is being sold, the assisting attorneys involved may be required to furnish such reports to the General Counsel as are reasonably necessary to assure that such clients' interests are being protected.
In the event that the attorney is not associated with a firm and there is no other legal representative the attorney is affiliated with, Section 3 directs the General Counsel to petition the District Court to appoint an attorney or attorneys to inventory the files of the DIM attorney and propose to the court necessary or appropriate action to protect the interests of the clients and the DIM attorney.
An appointed attorney steps into the shoes of the DIM attorney and assumes the responsibilities and duties attached to the attorney-client relationship. However, there is portion of this Section that provides that an appointed attorney is an agent of the court in this particular role and cannot be held liable to any person for actions they take in good faith. Additionally, an appointed attorney can be compensated for their time and, if there is insufficient fees to compensate the appointed attorney, the Supreme Court can be petitioned for payment under any available undesignated Bar Association funds.
These are the only rules provided in the Rules of Professional Conduct regarding a DIM attorney. The rules provide for the appointment of the assisting attorney, but they do not eliminate the issues the assisting attorney will have in taking over a practice that they are completely unfamiliar with.
In my opinion, it's an attorney's fiduciary duty to put a plan in place. I think this statement from Susan A. Berson well sums up the message of this paper: "Though a legacy of chaos is not what most attorneys hope to leave behind, when a solo or small-firm practitioner dies without a plan in place, the legal burden for clients and loved ones is great." I couldn't agree more.