Who is responsible for law practice succession planning? I suggest that all of us in the Indiana bar have roles to play, especially those of us closer to the end of our legal careers. So far this year, I have met with several senior attorneys who want to develop and implement succession plans for their law practices.
Over the past few months I have been helping three sole owners of law practices develop succession plans. They have presented some unique challenges as I help them.
How does the legal community at large continue to provide and expand high-quality legal services to all Indiana communities? What role should law practice succession planning play in ensuring that people, businesses, governmental and nonprofit organizations’ legal needs are competently addressed?
Normal law practice succession planning involves developing a plan for your law practice that will be implemented over the next one to five years. But what about having a plan to deal with issues such as short-term illness, disability, vacations and death?
A wide variety of methodologies is used in valuing such enterprises. But even more important for law firms, there are several key questions that must be answered before rendering an opinion on value.
After developing a succession plan for your law practice, you should be aware of essential legal documents you will need to implement your plan, depending on the option that works best for you.
What are your goals for your retirement and law firm succession plan, and how do you plan to achieve them? Do you have any timetable in mind? It can be difficult for some of us to sit down and think about retirement and how we will plan our exit from our practice. But just as in estate planning, we need to face these issues.
Helping attorneys develop law practice succession plans is very specific to the desires and circumstances of each attorney. The options vary depending on whether a senior attorney is a solo practitioner or practicing in a law firm.
Rule 1.17 of the Rules of Professional Conduct, which deals with the sale of a law practice, is a restraining force in law practice succession planning. There are good reasons for this rule, such as putting our clients’ interests before our own, but no other profession faces the restrictions an attorney has when selling a law practice.
The thought of mentoring junior attorneys can be a restraining force in itself. Some of you are probably thinking, “Been there, done that!” having invested in a junior attorney (or more than one) who then opened their own practice, joined another practice or wasn’t a good match after all. But even given what seems like a daunting task, it can be done.
Practicing law when we are no longer able can have real consequences, which can come in the form of malpractice claims, disciplinary action, or both.
Because attorneys are problem-solvers, our services are in ever-increasing demand. Many of us baby boomers and our parents are living longer and facing many living options in our retirements, as well as health issues.
The primary reason why law practice succession planning is needed is to protect an attorney’s clients and their interests. We need to ask ourselves, “If I slow down, retire, close my office, become disabled or die, who will make sure that my clients’ legal needs are served?”
Law practice succession planning is the development and implementation of a plan to protect a law practice’s clients and continue its legal legacy. In some ways, it is coming to terms with the fact that our legal careers are finite.
This is a first in series of articles on the issue of law practice succession planning.