Sample Succession Plan

SAMPLE SUCCESSION PLAN

Supreme Court Rule 1.3 states that "A lawyer shall act with reasonable diligence and promptness in representing a client."

Comment [5] toRule1.3statesthat"To preventneglectofclientmattersintheeventofasolepractitioner'sdeathordisability,thedutyofdiligencemayrequirethateachsolepractitionerprepareaplan,inconformitywithapplicablerules,thatdesignatesanothercompetentlawyertoreviewclientfiles,notifyeachclientofthelawyer'sdeathordisability,anddeterminewhetherthereisaneedforimmediateprotectiveaction."

**This document is being provided through the Special Committee on Succession and Transition Planning as an example of a succession plan for the consideration by ISBA members. It is not intended as legal advice or a substitute for a lawyer’s own independent research or judgment in their specific circumstances. The ISBA makes no representations with respect to this example form as to its suitability for any particular purpose. If you use this example form, or any portion of it, you are agreeing to hold harmless the ISBA for any cause of action relating to it. Further, this example form may not be sold or republished without the express permission of the original author.**

The Special Committee encourages, and is happy to hear, your comments about this example form. If you have comments, questions, or suggestions for the Special Committee, please contact us at .

RULE 1.3 Succession Plan

Topreventneglectofclientmattersandinrecognitionofalawyer'sfundamentalduty toprotectaclient'sinterest,thefollowingplanfortheunexpectedisadopted:

A.Ihavedesignatedanotherattorneytomanageorclosemypracticeintheeventofmydeath,temporaryorpermanentdisability,orimpairmentorincapacity.Thatattorneyis ______.

B.Ihavealifeinsurancepolicywhichwillprovide cashfor theexpenseofoperatingmyofficeuntilthepracticeissoldorclosed. It ispolicy #______with ______and has a face value of $______. Theproceedsofthepolicyshouldbeusedtopayfortheordinaryoperationalexpensesofmyofficesuchasrent,employeesalaries,utilities,insurance,etc.

C.MyretaineragreementsstatethatIhavearrangedforanotherattorneytomanage orclosemypracticeintheeventIamunavailableorintheevent ofmydeath,temporaryorpermanentdisability,orimpairmentorincapacity.The designatedattorneyisauthorizedtoreviewclientfiles,notifyeachclientofmyunavailability,deathordisability, anddeterminewhetherthereisaneedforimmediateprotective action. Thedesignatedattorneyshallbecompensatedasfollows:______.

D.I employanofficemanagerwhoisfamiliarwithmyofficeproceduresandwhohasagreatdealofknowledgeabouttheoperationofmyoffice. Myofficemanageris ______. My office manager works from home most of the time and her telephone number is _____

E. My accountant is ______and my accountant's telephone number is ______. My accountant's e-mail is ______.

F.My premisesliabilityinsurance,worker'scompensationinsurance,notarybonds,etc.areallhandled by ______. That telephone number is ______. Their e-mail address is ______. [Or as applicable.]

G.My time keeping and billing system uses QuickBooks [or as applicable and is maintained by ______

H.Wemaintaina"main"orcentralcalendarthatcontainseveryappointmentand everycourtdate,andeveryeventthatimpacts the operation oftheoffice (vacations,doctoranddentistappointments,etc.)Ifitis notonthemaincalendar,itisnotscheduled.[Orasapplicable.]

I.Thefilesinmyofficehavebeenopenednumerically,withtheoldestfileshavingthelowestnumbersandthenextnumbersequentiallybeingassignedtoanewfile. Myassistanthasa crossreferencewherebyopenfilesarelistedalphabeticallybytheclient'slastnameaswellasbyfilenumber.[Orasapplicable.]

J.Mycalendaringsystemisavariationofthetraditional"dual"calendaringsystem. Nofilecanbeputawaywithoutadatebeingenteredonthefile. IenterthatfilenumberonthatdateinacalendarImaintain. Myassistantthenentersthesamefilenumberonacalendarmaintainedbyher. Ordinarily,filesarenotfiledunlessafollowupiscalendaredandamemoplacedinthefileregardingthenextactionthatshouldbetakenandnotinganydeadlines. [Orasapplicable.]

K.Bothmyofficemanagerandmyassistantmaintainacompleteandcurrentlistofactiveclients,includingtheirnames,addresses,phonenumbersande-mailaddresses.[Orasapplicable.]

L. Ihavethreebusinessaccounts. Thefirstaccount,mytrustaccount,ismaintainedbymyofficemanagerandallclientfunds,includingunearnedretainers,aredepositedinthataccount. Pursuanttoauthorityinourretaineragreements, earnedfeesandexpensesmaybepaidoutofthataccount. Thesecondaccountisidentifiedasmy"expense"accountandthataccountisalsomaintainedbymyofficemanagerandisusedtopayusualbillssuchasutilities,payroll,taxes,etc.Thataccountisfundedbywhatiscalledmy"attorney"accountwhereallearnedclientfeesaredeposited,andfromwhichfeesaresometimesadvanced. Imaintain the "attorney" account. The account number for my attorney account is ______. The account number for my trust account is ______. The account number for my expense account is ______. And the account number for my attorney account is ______. All of these accounts are established at ______Bank in ______. [Or as applicable]

M.Mytrustaccountandexpenseaccountledgersareinthepossessionofmyofficemanager. Shemaintainstheseaccounts,balancingthemmonthly with the bank statements. She is an authorized signer on these accounts. ______is also an authorized signer on these accounts [Or as applicable.]

N.Withregardtooriginaldocumentsofclients,itisourpolicytokeepasfewaspossible,tokeepthemseparateintheclientfile,andtoreturntheoriginalstotheclientassoonaspossibleandnolaterthantheclosingofthefile. Attherequestofclients,wehavekeptsomeestateplanningoriginalsandallofthosearelocatedinonefilingcabinetwheretheyarestoredalphabetically. [Orasapplicable.]

O.Therearethreeseparate,activecomputersinmyoffice.Myassistant'scomputercontainsmostclientdocumentsandofficeforms.Myofficemanager'scomputercontains trustaccountrecords,incomeandexpenserecords,includingtheQuickBookssoftware.Mycomputercontainsmostlypersonalinformation.Computerpasswordsareinthepossessionofmyassistantandmyofficemanager,bothofwhomhavethepasswordformycomputer.[Ifapplicable,]Ihaveanetworkinmyofficeandthenameoftheadministratoris andtheadministratorcanbecontactedat .[Orasapplicable.]

P.TheCircuitinwhichIordinarilypracticemandatese-filingofallcourtdocuments.Thenameof myE-FilingServiceProvider ((EFSP) is ______.

Q.Intheeventofanunplannedemergency,whereIamunabletoact,thefollowingisachecklistIdirect andmystafftofollow.

Rule1istoprotecttheclient.

(2)Providereciprocalnotice:familytostaff;stafftofamily.

(3)Opentheofficeasusualorstayopen. Thisiscritical.

(4)Decidehowstaffwillrespondtotelephonecallsinitially: AttorneySmithisfillordeceased}. Althoughthisisasadtime,wewanttoassureyouthatyourmatterwillbeattendedtoandthat yourpositioninthematterwillnotbecompromised.(Bespecificwherepossible:AttorneyJoneswillbeattendingyour realestateclosing/ willbecoveringthenextcourtappearance/willbereviewing yourfileandwillcontactyouinthenear

future.)

(5)Reviewattorney'scalendarchronologically,beginningwiththecurrentdateandworkingoutastimepermits.Notifycourts,clientsregardingimmediatehearingsorappointments.Usea"script"somewhatsimilartotheabove.

(6)Beginreviewingticklers/followups.Beginnotifyingotherattorneys,judges,clientsusingsimilar"script".Staffshouldcompleteandplacememosinfilesastheycompletenoticesorre-schedulematters.Modify"script"aslikelihoodofsaleorclosingofpracticedevelops.

(7)Iftheattorneywillnotbeback,identifyandcontactpotentialbuyers. Targetoneweektoidentifybuyerorbuyersofpractice. Timeiscritical.Themoretimethatpasses,thelowerthevalueofthepractice.Becertainthatpotentialbuyerdoesaconflictscheck.

(8)Whereapplicable,cancelsubscriptions:Lexis,Westlaw,IICLE,etc.

(9)Targetthreeweekstocompletethesaleofpracticeorclosetheoffice.

(10)Staff should organize files chronologically based on what needs to be done next.

(11)Havedesignatedattorneydowhatmustbedone: attendrealestateclosings,covercourtappearances,dealwithotherurgentmatters.

(12)Asmuchaspossible,maintainbusinessasusual.

(13)Obtainfinancialrecordsforbuyerfromaccountant,ifapplicable. Continue billing and collection efforts if sale does not appear feasible; payments will drop off significantly once closing of office is known.

(14)Schedulemeetingwithfamilyatendoffirstweek.

•Decidewhethertherewillbeasecondweek.

•Bepreparedtoadvisefamilyaboutincome,accountsreceivable,accountspayable,billstobepaid,overhead,cashonhand,statusofpossiblesale.

•Ifbillingmonthly,considerstaying"open"untilnextbillingcycle.Decidehowbillingwilltransitiontobuyerorbuyers,ifapplicable.

•Considerclosingoffice(lease,utilities,etc.)andworkingfrom homeifsaledoesnotappearlikely.

•Decidewhethersalecanbeaccomplished,bothlegallyandasapracticalmatter.

(15)Ifapplicable,introducebuyerorbuyersto"systems"inoffice:

•Maincalendar

•Tickler/mainfollowupsystem

•Filingsystem

•Officeforms

•Officeequipment

•Casemanagementsystem(ifapplicable)

(16)Ifapplicable,notifyclientsofproposedsale,theirrights,deadline toobject.ReadRule1.17again.

(17)Inappropriateinstances,purchase"tail"professionalliability coverage.

(18)Scheduletaxfilings,assignresponsibility.

(19)Decidehowlongbillingforfeeswillcontinue,ifbuyerorbuyerswillnothandle;decidehowitwillbedone(P.O.Box?Whetherandwhen balancewillbeturnedovertocollectionagency?).

(20)Createacalendar:

•Week 1:Notifycourts,clients;handleimmediateproblems;identifyprobablebuyerorbuyers;beginreviewingallactivefilesfor

"action”items;

•Week2: Continuenotifyingcourts,clients;continuereviewofallfiles;makesurepayrollandotherfilingdeadlinesareobserved andnecessaryreportsfiled;completenegotiationswiththebuyer orbuyers,if applicable;sendrequirednoticetoclients;prepare andfileappropriate petitionwithcourtrequestingentryofauthorizingtransferoffiletobuyerorbuyerswhenclientcannotbegivennotice

•Week3: Continuenotifyingcourts,clients;completereviewofall"active"filesfor"action"items;dodraftsofbillsonexistingfilessothatfeesearnedtodateofdeathordisabilitycanbedeterminedandcreditedorbilled;reviewallactivefilesforinadvertentmissingofdeadlines,statutesoflimitation,orotherconcerns. Ifapplicable,transitiontobuyerorbuyers

•Week4: Completeworknecessarytocompletesaleofpracticetobuyerorbuyers(ifapplicable)orcloseoffice;notifylandlord(ifapplicable),utilitycompanies,lessorsofofficeequipment,and appropriate othersoftermination ofpractice.

(21)Decidehowmattersthatrequireactionwithinthe90daywaitingperiodwillbehandled.

[Orasapplicable.]

R.Identifyotherissues uniquetothecircumstancesofthelawyerwhosepracticeisbeingsoldorclosedanddealwiththoseappropriately.(IfacorporationorLLC,completeappropriateresolutionsorotheraction.)

S.Thefirstruleandthelastruleis:Protecttheclient.

Last Updated: November 13, 2017