I am an attorney in solo practice in the southwest Missouri. I am 45 years old and I have two paralegals working for me in the firm. The practice is a general practice firm that I started ten years ago. I have been advise that I should have a succession plan. What exactly do I need to be putting in place? Any thoughts that you have would be appreciated.
Due to the number of baby boomers approaching retirement much of my writing has been on succession and exit planning for this group. Based upon your age I think you are talking about contingency or practice continuation planning which is succession planning for the short-term. Since you are a solo you have no backup within the firm if something were to happen to you today. So you should form a relationship with another attorney or law firm to provide coverage if and when needed.
Generally a contingency plan or practice continuation plan is an arrangement with another law firm or attorney to step in if you become sick, disabled, or die. A basic contingency or practice continuation plan involves having written instructions designating another competent lawyer to temporarily assume the responsibilities of your practice and notify clients in the event that you become disabled or die. To prevent neglect of client matters in such situations, the ethical duty of diligence requires in many status that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer’s death or disability, determine whether there is a need for immediate protective action, have a receiver appointed in some cases. Many states are making such plans mandatory.
A contingency or practice continuation agreement with another attorney or law firm should include:
- Checklists and operating procedures manuals for running the practice
- Client and contact lists
- Access to operating, trust, and other bank accounts
- Passwords to all systems
- Access to voice mail systems
- Access to financial records
- Access to paper and or electronic client files
- Financial arrangements between the solo and the other attorney or firm for covering your practice – hourly or fee split.
- Arrangement regarding the sale of the practice to the other attorney or firm in the event of incapacity or death.
John W. Olmstead, MBA, Ph.D, CMC
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