01 Dec The Cobbler’s Children Need Shoes: Succession Planning for Lawyers
Emily TaylorSenior Associate
Day in and day out, I encounter individuals planning for their untimely incapacity or eventual demise. We discuss the intricacies of their wishes, the people they trust (and those they don’t), their numerous assets, and even where they store their electronic passwords. The reality of someone coming in to take over the day-to-day life of another is overwhelming for even simple estates. What if that person is a lawyer? What if that lawyer is the owner of his or her practice and, most concerning, what if that practice is a solo one?
Over the years I have seen this play out in various ways. The solo practitioner who wants to sell her practice but may never find the “right” buyer. The small firm owner who eyed an associate as his retirement and succession plan only to see that associate go to another practice or hang his own shingle instead. What happens to these practices when the attorney is forced away from his or her career sooner than expected to something like Parkinson’s, dementia, or death? What happens to the clients?
Like most opportunities, the answer is in how much you plan or whether you plan at all. With no plan in place, the loved ones of the lawyer are left to figure it out. Working through someone else’s practice can be anxiety inducing for a lawyer, but often it is a non-lawyer trying to discern what to shred, keep, send, pay, return, and so on. Someone without a law license can make no decisions about existing cases or clients that would be legally dispositive, however they often recognize clients and their cases may be up against deadlines, and the non-lawyer friend or family may have no practical experience to move anything forward. Luckily, the current Texas State Bar president has been championing this issue for years.
There is a custodial program administered by the State Bar located here. People with nowhere to turn can reach out to this program and a court-appointed custodian will be named to wind down the practice. There are also resources here for an attorney serving as a custodial attorney to reference, the opportunity to volunteer as a custodial attorney, and for the pre-planner, a place to designate a custodial attorney.
Although this program is a huge step forward in succession planning for solo attorneys, it is run almost exclusively on volunteers and is not widely known by the legal community—let alone friends and family members who may be in most desperate need of its services. Alternatively, there is a niche practice area of lawyers for hire who do this kind of wind down for the lost practice for a family or estate that can afford it.
So, how does the solo practitioner or small firm owner effectively plan for the succession of his or her law practice? The first step is checking the boxes of the practice while the owner is still operating it. Is the firm up to date with the Secretary of State and the IRS? Are the books in order and readily accessible? Are there other professionals in place who can step in and assist the next person in line? Are there other members of the practice and if so, can they take on the work of the attorney with a disability? If not, or if there are no other attorneys, each attorney should designate a custodian outside of the existing firm. It should be noted that designating a custodial attorney can be kept on the attorney’s state bar page and is easily altered. Naming a successor for your law practice will save time, money, and heartache for your friends, family, and clients knowing there is a plan in place when the unexpected happens. If you or your loved one is a lawyer, share these resources and recommend they take the time to plan for themselves.
ABOUT THE AUTHOR: Emily Taylor is an Associate at Rapp & Krock, PC. Emily Taylor has experience working with attorneys on succession plans as well as working with families of attorneys in guardianships involving attorneys and administering estates of attorneys that involve a law practice.
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