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Wellness

Succession Planning

Turning Angst into Action

October 2020 By Jonathan ‘‘Jon’’ White

Thinking about succession planning may provoke worry, confusion, and perhaps a desire to procrastinate. Creating a succession plan requires time, something in short supply for many lawyers. It requires thinking about one’s own disability or mortality, thoughts that can provoke worry and dread. Often, lawyers don’t know where to start, leading to bewilderment and delay. It’s easy to put off planning to another day, another month, or another year. This article strives to make succession planning more accessible and manageable by providing tangible starting points.

The Case for Succession Planning

There are at least three significant reasons succession planning is crucial for all lawyers. First, there’s the risk of prejudice to your clients were something unexpected to happen to you. A statute of limitations could run. A hearing might be missed. An upcoming trial or transaction could be delayed, or it could proceed with your client unprepared.

Second, consider the financial injury that may flow to clients, your estate, or other third parties if something happened to you and you have not been conscientious with bookkeeping. This is particularly important when it comes to funds in trust.

Third, consider the impact on your loved ones if you do not have a plan. Would they know where to begin if it fell to them to figure out what to do with physical files, computers you used in practice, or your practice’s trust and operating accounts? Would they, for whatever reason, take steps that create potential liabilities for your estate as regards winding up your practice? Don’t saddle those you love with another burden at a time of loss and mourning.

Three Steps to Success

The good news is that if you take just a few steps, your practice can be easily wrapped up by another lawyer, with a smooth transition of files and return of funds. Further, these actions will help you have an efficient, well-run practice right now.

First, think about administrative nuts and bolts that are helpful to you now. These would be helpful to someone in your absence. Keep a current client list with updated contact information. Diligently recorded deadlines should be kept in a place where someone could find them with simple instructions. Make sure those client text messages or emails you receive make their way into the file. Memorialize conversations with clients, witnesses, and opposing counsel.

Second, make sure your accounting is in order. On this front, review Colorado Rule of Professional Conduct 1.15D. This rule details records you must keep related to funds you hold in trust, as well as invoices, accounting statements to clients, and fee agreements. Moreover, Colorado Rule of Professional Conduct 1.15C(c) instructs lawyers to reconcile their trust account as to individual clients and in the aggregate at least quarterly. Do not neglect this duty. And similarly: pay yourself. Funds held in trust are presumed to belong to clients and third parties pursuant to Colorado Rule of Professional Conduct 1.15A(a). If you have earned fees from funds held in trust, move the fees out of trust and send your client an accounting. Do not leave reconciliation of your trust account to someone else in your absence.

Third, think about how you can facilitate access to files and records. Make sure the location of your bookkeeping records and client files is secure, and that someone would be able to find them. Store a list of passwords for your electronic files for your successor. There are programs that can help you keep track of your passwords safely, securely, and confidentially. Share the location of your passwords with your successor or trusted individual so they can access the list or program in the event something happens to you. Further, think about what devices you use to store electronic files. Keep client files in a location that is separate from a laptop or device where you store personal information. Would you want a colleague who is winding down your practice and looking for files to parse through all the files on a laptop to determine which belong to clients or which you kept for personal reasons?

Succession Planning is Attainable

Don’t let these steps overwhelm you. View them as foundational tasks that can be undertaken in a few weeks or months rather than all at once. For example, you can make your October task simply generating a good, current spreadsheet of current client matters. If you already have that, focus on examining your accounting systems and Rule 1.15D to see that records are meticulously kept.

Comment 5 to Rule 1.3 suggests that the lawyer’s duty of diligence “may require” a solo practitioner to develop a plan where in the event of his or her death or disability there is another lawyer ready to review files, notify clients, and take protective measures. Outside that comment, there is no mandate to create a succession plan in the Rules of Professional Conduct. But given the potential downsides, you should consider it a necessary part of your practice. For your peace of mind, get the ball rolling as soon as possible. Procrastinating does not help reduce angst and worry, and there is plenty of that in practice and in this challenging moment in time in which we live.

Take a deep breath. Succession planning is something you will do incrementally. Decide what step you want to begin with and set aside an hour to do that.

Conclusion

Hopefully, this article has reduced some of the stress associated with this concept. The hardest part of many tasks is getting started, and it is no different here.

If you are struggling with complex emotions and/or stressors as you work through your succession plan, contact the Colorado Lawyer Assistance Program (COLAP) at info@coloradolap.org or (303) 986-3345 for a free and confidential well-being consultation.

Stay tuned in 2021 for the next article in this series on succession planning. It will explore more technical concepts, such as the difference between inventory counsel, a successor counsel, and/or an assisting attorney.

Jonathan ‘‘Jon’’ White is professional development counsel and inventory counsel at the Colorado Supreme Court Office of Attorney Regulation Counsel. In this role, he helps wind down law practices and return client files and property when a lawyer dies, becomes disabled, or cannot practice, and there is no other lawyer available to assist in closing the practice. Previously, White practiced civil defense litigation and was a law clerk to the Honorable Christopher Cross and the Honorable Vincent White. He volunteers as counsel to the National Client Protection Organization and is a member of the Colorado Task Force on Lawyer Well-Being, the Colorado LGBT Bar Association, and the American Bar Association’s Cyber Security Legal Task Force. Coordinating Editor: Sarah Myers, COLAP executive director.

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The good news is that if you take just a few steps, your practice can be easily wrapped up by another lawyer, with a smooth transition of files and return of funds.