Designing an Ethical Law Firm Succession Plan

As attorneys, we constantly put our cases before everything. We get too involved. Our client relationships become front and center as we work on their behalf. We have laser focus when in trial mode, sometimes to the detriment of our personal lives. Most of the time, we are simply happy that the train is staying on the tracks when it comes to our firms and managing them. But what happens when the worst happens?  

If I were to suddenly get into an accident, would my clients be protected? Would my staff know what to do if I was unexpectedly waylaid for months and couldn’t work? Or, what if I am finally looking at my future with an eye toward retirement? What does my future, and the future of my law firm, look like?  

Legal professionals need to plan for the worst in order to ensure the best outcomes for ourselves and our practices. Whether it’s a planned transition out of law entirely, or it’s a surprise cessation of practice (we are not immune from catastrophic health events), it is incumbent upon us to have a succession plan in place. Below we will go through some tips on making a law firm succession plan, including what duties you owe to your clients.  

Ethical Considerations of Planning for Law Firm Succession

ABA Model Rule 1.6 reminds us that we owe a duty of confidentiality to our clients at all times. So, what happens when an attorney suddenly passes away and doesn’t have the proper staff available to notify his or her clients? Who can access the attorney’s trust account so that they can remit the proper amounts to clients who now have to rush and find new counsel?  

Also consider ABA Model Rule 1.3, which requires attorneys to act “with reasonable diligence and promptness in representing a client.” If you are unable to respond to client emails or phone calls because you are incapacitated, how can you act with promptness when it comes to overseeing their cases? Attorneys need to consider everything when it comes to planning for the worst, from client communication, the administrative tasks of matter management, to the strategic planning and execution of actually working your cases. It is imperative that you have a plan as to who can access your client files, who can contact the clients in the event of an emergency or extenuating circumstance, and who can access your trust account funds.  

Law firm ethics are shifting in 2023. Learn How >

Designate a Practice Administrator or Custodian Attorney

To prevent chaos from taking hold in your absence, consider appointing a custodian attorney in your absence if your jurisdiction allows it. This attorney is known by different titles across the country, but they all in essence perform the same duties. This lawyer is called a Practice Administrator in California, a Primary Attorney in Nebraska, a Custodian Attorney in Texas, and an Inventory Attorney in Florida. Some state bars, take Florida for instance, now require you to have this attorney designated.  

To be clear, these “Practice Administrator,” “Inventory” or “Custodian” Attorneys are NOT assigned to take over your practice and represent your clients in the event of your incapacity. Rather, these attorneys are ones who will be able to contact your clients, encourage them to obtain legal counsel, and see that their client files are properly returned. Check with your state bar to see if they offer this as an option. If not, I encourage you to petition your bar to adopt a Custodian Attorney policy.  

In the absence of such a policy, the onus usually falls upon your state bar to handle incapacity or succession issues. This takes away and/or occupies valuable bar resources that are better spent on other matters. If enough of these cases start monopolizing the bar employees’ workday, you could see an increase in your annual dues. Sometimes, a court has to step in and appoint a trusteeship to handle the transition of your client files. Whether by state bar or by court, this process drains valuable time, time that might be detrimental to your clients’ cases. This is why proactively appointing someone to handle these matters is key.

The Importance of Integrated Legal Software Systems  

If your intention is to eventually sell your practice, or if you simply want to make it easier for someone to come in and perform client triage in the event of your incapacity, I encourage you to adopt a legal practice management software. This legal software, like Smokeball, allows for a single source of truth for all client documents and information. This means that a Custodian Attorney can access your software and immediately see legal calendars and legal workflows with impending deadlines, what stage each case is at, and the last communication to the client. It is an invaluable resource for your firm and your sanity.  

This means that someone can quite simply pick up where you last left off for your cases. Legal software allows for flexibility in the wake of chaos, but also does not compromise your ethical duties to your clients. Your Custodian Attorney can promptly contact clients about the status of their cases and can quickly move their client file to new counsel if necessary. Look for a legal software solution that contains everything you need in one place.

If your intention is set on selling your practice, an organized firm is a higher-value firm.  Law practice management software will make it easier for a new firm to take over and start working on the cases. Instead of sorting through physical client files to assess what is going on in each case, the new attorney just simply must log into your system and adopt the legal workflows you’ve already laid out.

Succession isn’t something that we ever want to think about – who wants to contemplate their mortality on a workday? – but it is necessary to protect your clients’ interests and avoid office chaos. Consider appointing a Custodian Attorney, in whatever form that takes for your jurisdiction, as well as adopting a practice management system to make things as seamless as possible for your successor as well as your clients.