Sometimes I think that I spent too much time as a Girl Scout. Besides leaving me with an obsession for Thin Mints, I think it left me with an obsession for planning. My two latest planning obsessions are what to do with my office when I retire or if I am dead or disabled. The second is the “go box”. When I actually figure out what to put in the “go box”, I’ll detail that.
Some readers will recall a prior article where I wrote about some of the planning that should be done to protect a solo practitioner’s practice in the event of death or disability.1 Since that time, I have continued to be interested in disaster planning and its effects on solo practice. Last November, ALPS Risk Management Report referenced a book published by the State Bar of Oregon Professional Liability Fund. This book can be purchased directly from the Oregon State Bar Professional Liability Fund or can be downloaded from their website.
The handbook is entitled, Planning Ahead: A Guide to Protecting Your Client’s Interests in the Event of Your Disability or Death. It is not a lengthy book, but it outlines the steps for preparing your practice and for handling the dissolution of someone else’s practice. It provides checklists for both and provides sample agreements, consent forms, letters of understanding for the assisting attorney as well as a paragraph for the attorney’s retainer agreement. The common theme for this handbook is that the person who is going to take over your practice needs to be able to look at a few documents and know what is going on in all aspects (client and business) of your practice.
On the simplest level, this means maintaining and documenting client files so that they are up to date and clear to the outsider. It means being able to figure out what deadlines are approaching and what extensions of time are needed. Some of this is simplified by using a computerized calendering system, but the trick is really using it. It means keeping client contact information up to date so the assisting attorney (the person handling the office during your disability or after your death) can obtain the appropriate permissions to extend time or to notify the client.
There is also the office or business side of the practice. While it is clear that most lawyers became lawyers to practice law, the business side of the practice must be maintained. It too must be kept current. Billing and accounting records must be up to date; information about leases and service contracts must be readily accessible. If the assisting attorney is authorized to do so, the bills must be paid and the practice liquidated or sold. This cannot be done without having financial affairs in order. The one theme in the Oregon handbook is to look to the office manual for the firm. Not the office manual that discusses harassment policies and vacation time, the one that gives the instructions for forwarding the phones to voice mail and how to open mail. This will provide the assisting attorney with the mechanics of how the office runs and where to look for information. If you do not have one of these manuals, have your staff write it. They can do it without knowing it. Have your staff write down everything that they do every day for a week. Be sure this week includes a the time when bills(A/R) are sent out and the time when bills (A/P) are paid. Once this list is compiled, it can do two things. It can help you create a job description for each member of your staff and it forms the basis of a procedures book. Once the task is outlined, the steps to perform the task can be outlined for the procedures book. In my office, the joke is that the instructions for rolling the phones to voice mail must be on page 1 so I can find them. So, once the task list is created, then the steps to perform each task can be written out. For example, page 1 of the office procedures manual says,
INSTRUCTIONS ON VOICE MAIL
To turn voice mail on:
1. Press *72 314-XXXX
To turn voice mail off:
2. Press *73
To check voice mail:
3. Dial 314-XXXX and enter code #50XXX
PLEASE NOTE, YOU MUST BE ON LINE ONE
A procedure manual can be this simple. It is also useful for training new employees.
The assisting attorney should also have a list of vendors, account numbers and terms available. This can be done in a summary sheet which can be held in a separate file. Passwords for computer programs and websites should also be included in this less accessible list.
Financial affairs, particularly the trust account, can be a much more troublesome issue. On the one hand, the person who is designated as assisting attorney should be someone that you trust to handle your practice. However, how much access you want to give to someone else to your trust account is purely your discretion. Access can range from the assisting attorney being a co-signer on the account to having to wait to have a probate or guardianship court award the assisting attorney authority to access that account. In the meantime, money that a client may need to obtain new counsel is locked up, inaccessible to the client or the cosigner may view your account as an easy line of credit. The balancing between the duty to not impede a client and the duty to maintain the sanctity of the trust account cannot be overlooked. Compare, S.C.R. 151 and S.C.R. 165.
The next financial issue is compensation for the assisting attorney. If you do not have sufficient cash reserves, how will you pay the assisting attorney to do this work? How will the staff be maintained? What about the office space? If you do not maintain sufficient cash reserves, you must identify a different source of funds for these payments. Life insurance may cover some of these outlays, but only if you have died and only after the company processes the application. Disability insurance will only cover your personal income; not your business needs. Business owners policies may not cover the expenses of winding down. Consultation with a competent insurance broker who assists professionals in this situation is recommended.
Above all, the ethical requirement for having a written plan cannot be ignored. The ABA Standing Committee on Ethics and Professional Responsibility rendered a formal opinion in December, 1992 calling upon Model Rules 1.1 and 1.3 to conclude that competency in representation includes preparation for those times when an attorney is no longer able to adequately represent the client. The committee wrote,
To fulfill the obligation to protect client files and property, a lawyer should prepare a future plan providing for the maintenance and protection of those client interests in the event of the lawyer’s death. Such a plan should, at a minimum, include the designation of another lawyer who would have the authority to review client files and make determinations as to which files need immediate attention, and who would notify the clients of their lawyer’s death.
A lawyer who assumes responsibility for the client files and property of a deceased lawyer must review the files carefully to determine which need immediate attention. Because the reviewing lawyer does not represent the client, only as much of the file as is needed to identify the client and to make a determination as to which files need immediate attention should be reviewed. Reasonable efforts must be made to contact all clients of the deceased lawyer to notify them of the death and to request instructions in accordance with Rule 1.15.
This matter should not be overlooked. Preparation may avoid needless headaches in both the maintenance of the office and in the smooth termination of the practice. While we hope that none of us face this situation, the checklists can also be used to prepare for retirement.
1 Disaster Planning: Client Protection and More, NTLA Advocate, ________, 2002.