Avoiding Conservatorship: Succession Planning for Lawyers
On behalf of the PGCBA Probate, Estates, Trusts and Elder Law (P.E.T.E.) Committee, I would like to congratulate our President-Elect, Judge Jason A. DeLoach, who was sworn in as the newest member of the Orphans’ Court for Prince George’s County on February 1st. Judge DeLoach’s experience, knowledge and temperament ensure he will make an excellent addition to our probate court.
On February 5th, the PGCBA P.E.T.E. Section held its annual seminar. The seminar included a presentation titled “Closing a Deceased Attorney’s Law Firm – Succession Planning” presented by Lisa Fishelman and Brittany L. Strickland, both Assistant Bar Counsel at the Maryland Attorney Grievance Commission. While the topic of succession planning may fall in the Estates and Trust realm, it is particularly relevant to our Bar as a whole given the large number of Prince George’s County lawyers practicing as sole practitioners.
Lawyers frequently suffer from Cobbler’s Children Syndrome, derived from the phrase “the cobbler’s children have no shoes.” In other words, lawyers are oftentimes better at helping others than we are at helping ourselves. Below I will discuss what happens when a practicing attorney – particularly a sole practitioner – dies or is temporarily unable to practice law without a succession plan in place, and why having a succession plan is vital to all sole practitioners.
Pursuant to Maryland Rule 19-734, Bar Counsel may file a petition to request the appointment of a conservator if “(1) an attorney dies, disappears, has been disbarred, suspended, or transferred to disability inactive status, or is incapacitated or has abandoned the practice of law, (2) there are open client matters, and (3) there is not known to exist any personal representative, partner, or other individual who is willing to conduct and capable of conducting the attorney’s client affairs.” In other words, if an attorney dies or cannot practice law for other reasons (whether temporary or permanent) and does not have a succession plan in place, Bar Counsel will request a court ordered conservatorship. Having a Last Will and Testament alone is not sufficient, and a conservatorship may coexist along with the administration of a deceased attorney’s estate. The personal representative of a deceased attorney’s estate would not have authority for dealing with the attorney’s trust accounts and client matters. That would be the responsibility of a conservator.
After a conservator is appointed, the conservator will inventory the attorney’s files and take appropriate action to protect the attorney’s clients. Subsequently, the conservator may assist clients in either finding new counsel, assuming responsibility for specific matters or refer the client’s open matters to attorneys willing to handle them. Ultimately, the conservator may sell the attorney’s law practice, with the approval of the court, in accordance with Rule 19-301.17 (1.17) of the Maryland Attorneys’ Rules of Professional Conduct. The court may order payment to the conservator and enter judgment against the attorney (if the attorney is still alive) or the estate (if the attorney is deceased) for reasonable fees and expenses of the conservator.
Not having a succession plan can endanger attorneys with potential ethical exposure. For example, Rule 1.3: Diligence of the Model Rules of Professional Conduct states “[a] lawyer shall act with reasonable diligence and promptness in representing a client.” More specifically, Comment  of that Rule, states “[t]o prevent neglect of client matters in the event of a sole practitioner’s death or disability, the duty of diligence may require 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, and determine whether there is a need for immediate protective action.”
Additionally, pursuant to Rule 1.16(a)(2) of the Model Rules of Professional Conduct, “a lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if…the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client.”
To protect your clients, loved ones, yourself and your legacy, a succession plan – also known as a disaster plan – can help avoid a conservatorship if you are temporarily or permanently unable to practice law. During their presentation at the P.E.T.E. Seminar, Ms. Fishelman and Ms. Strickland discussed 5 recommended steps attorneys should take when establishing a disaster plan. Those steps are:
- Organize your office
- Find a colleague
- Make an agreement
- Inform staff and family of this agreement
- Inform your clients
Step One: Organize your office
In step one, the panelists recommended that sole practitioners take steps to organize their office, including creating or updating an office procedural manual, updating calendar and client files, updating time and billing records, avoid keeping original documents, using your retention policy, and clearing clutter. An office procedure manual should include information a successor attorney can use to quickly catch up if needed. Additionally, a successor attorney will need to know how to access client lists, files, ledgers, billing systems, calendar systems, computer and other passwords, information regarding financial accounts, safe deposit box and key, contact information of support staff and information on insurance policies.
Step Two: Find a colleague
This step is simple. After your office is organized, the next step is to identify a trusted colleague that can serve as an “assisting attorney” or “back-up attorney.”
Step Three: Make an agreement
After a trusted colleague is identified, you will want to detail an agreed upon scope and payment structure. Also, you will want to familiarize the back-up attorney with office procedures and provide the attorney with instructions regarding conflicts. It was also recommended that the written agreement be reviewed and renewed annually. You will also want to ensure access to your trust account if needed. An effective disaster plan will incorporate the safeguard of a triggering event, define limiting terms, use a Power of Attorney during your life and use estate planning documents for after your death.
Step Four: Inform staff and family of this agreement
Next, the panelists recommended providing your staff and family with information about your named back-up attorney. Your staff and family should have the back-up attorneys contact information and know to contact that attorney immediately.
Step Five: Inform your clients
The best way to inform your clients regarding your disaster plan is to do so through your Retainer Agreements. Retainer Agreements should include your file retention policy, arrangements to return materials to the client at the conclusion of the matter, and an agreement for another lawyer to assume responsibility for the case if you are unable to continue for any reason.
Taking the time to thoughtfully create a succession plan will help protect your clients, your loved ones, yourself and your legacy by avoiding a potential conservatorship.
Zachary W. Worshtil is a Partner at the Law Office of Ralph W. Powers, Jr., P.C. He is also a member of the PGCBA Board of Directors and co-chair of the Probate, Estates, Trusts & Elder Law Section. He concentrates his practice primarily in estate administration and probate litigation.