Succession Planning: When the Unthinkable Happens.

By Christian Stiegemeyer, Director of Risk Management

With Coronavirus much in the news, now is as good a time as any to calendar a comprehensive review of your firm’s disaster recovery and lawyer succession planning.

Missouri’s Rule 5.26 is a good place to start when drafting a succession plan for sole practitioners. The rule provides for a trustee to be appointed by a court to “protect the interests of the clients and other affected parties”. The rule requires attorneys to take whatever action deemed necessary to protect those interests, including:

1. Inventory active files/make reasonable efforts to distribute to clients;
2. Deliver undistributed active and inactive files to the chief disciplinary counsel for action as required by this Rule 5;
3. Take possession of and review the lawyer trust and business accounts;
4. Make reasonable efforts to distribute identified trust funds to clients or other parties (other than the lawyer);
5. After obtaining an order of the court, dispose of any remaining funds and assets as directed by the court; and
6. Initiate any legal action necessary to recover or secure any client funds or other property.

In as much as the trustee’s duties are established by the rule, succession planning review by a sole practitioner can begin with a focus on the processes and procedures necessary for accomplishment of those duties. For example, are active client files organized properly to permit them to be inventoried and distributed? Are trust account and billing records complete and up-to-date so as to facilitate reviewing, distributing and securing client funds and property?

Of course, beyond the duties enumerated in the rule, numerous additional tasks must be considered. For example, client communication and timeliness in the representation will be critical, requiring accurate calendaring procedures and streamlined access to client contact information. Requirements for notifying the attorney’s malpractice insurance carrier and confirming the availability of extended reporting coverage should not be overlooked.  Instructions provided for the lawyer’s Personal Representative should be reviewed to confirm they are not at odds with the duties of the Rule 5.26 trustee.

For larger law firms, other considerations of succession planning might include an assessment of the competence of the remaining attorneys to conduct the balance of the representation, a process of communicating to the client the change in the representation and confirmation the client desires to remain with the firm and heightened oversight and supervision of the attorney assigned to complete the matter, especially in the early phases of the transition.

Because it is not possible in an article to analyze every disaster scenario that could arise in a law firm, please feel free to contact The Bar Plan’s Risk Management Department at 1-800-843-2277 x171 if you have questions about how to proceed with your succession plan.