Lawyers in Transition Part 13: Checklist for Closing Your Practice

In some career transitions – such as the retirement of a solo attorney – the law practice must either be shuttered or placed in someone else’s hands.

This may also be the case for baby boomers cruising into their golden years, new judges stepping onto the bench and practitioners of all types facing disability, disbarment or special family circumstances.

There’s only one problem: it’s easier said than done.

“Naturally, if getting away for a vacation has proved difficult in the past, the idea of getting away for good may seem really daunting,” write practice management advisors Sheila Blackford and Peter Roberts in ABA Law Practice Today. “[I]n the ideal, you’ll have your route charted out well in advance of actually closing the doors. In all instances, of course, the interests of your clients must come first.”

The good news is you don’t have to go it alone. Bring your trusted staff into the planning process. Tap into their experience, insights and objectivity for a smooth succession.

The State Bar can also help. The Rules of Professional Conduct set out your ethical obligations. Chief among these: communicating with clients (Rule 1.4), resolving fee issues (Rule 1.5), terminating representation (Rule 1.16) and safeguarding and disposing of client property (Rule 1.15).

And here’s even better news: Lawyers Mutual has compiled a treasure trove of checklists and resources to steer you safely through the process. For instance, take a look at this office-closing infographic that provides valuable guidance at a glance.

Lawyers Mutual Checklist for Closing Your Law Office

(Note: this is a summary version only. Click here to download the entire checklist.)

• Stop accepting new cases.
• Inform staff of plans.
• Finalize as many active files as possible. See the LM checklist for how to handle different categories of case files.
• Inform clients of plans. See the LM checklist for what to tell clients.
• Make copies of files for your clients. Retain the original files.
• Transfer files to new lawyer(s).
• Develop handling procedures for closed files and original documents, such as wills. Follow the State Bar rules.
• Notify clients about their file disposition.
• Send the name, address, and phone number of the person who will be retaining your closed files to the NC State Bar, P.O. Box 25908, Raleigh, North Carolina 27611.
• Follow RPC 209 and other State Bar guidelines for storage and disposal of closed files, including retention periods.
• Take care of outstanding trust account funds and other client property, as well as firm expenses, accounts receivable, business checking and related accounts.
• Address unclaimed client funds and return safe deposit box contents.
• Terminate your lease. You will need to notify your landlord and may need to negotiate early termination terms.
• Arrange for termination of equipment leases and removal. Wipe the computers clean of any confidential client data.
• Meet with your accountant. Finalize accounting details.
• Notify bar associations and professional organizations. Call the NC State Bar Membership Section and update your contact information. Determine what membership status you wish to maintain going forward (details available on the State Bar website).
• Contact Lawyers Mutual or your professional liability insurance carrier about necessary continued malpractice coverage.
• Consider purchasing an Extended Reporting Endorsement (ERE), commonly referred to as a “tail policy.” Contact Lawyers Mutual for details.
• Contact an IT professional to inventory all office and personal equipment that may contain client sensitive information. Remember that client confidentiality continues after the case – and your office – has been closed. Develop a decommissioning plan.
• See the LM checklist for other important tips.

5 Practice Tips for Closing a Law Office

1. Provide forwarding information. “In the final days of winding down your practice, you should arrange to have your office phone number forwarded to your home, or to a lawyer who is assisting you with the closure of your office,” recommend Blackford and Roberts. “[Y]ou might also arrange for an automated message on your office line for at least several months after your practice closes.”
2. Use this Office Closing letter. It’s part of the Lawyers Mutual Office Closing Handbook.
3. Don’t overlook housekeeping details. Wrap up loose ends like cleaning services, parking permits, furniture and fixtures, office subscriptions, professional memberships and website hosting.
4. Contact Lawyers Insurance Agency. Consult with a professional planner on health, life and disability insurance, as well as other important benefits.
5. Relax and enjoy the rest of your life. You’ve earned it.

Sources:

• Blackford and Roberts, ABA Law Practice Magazine https://www.americanbar.org/publications/law_practice_home/law_practice_archive/lpm_magazine_archive_v37_is3_pg48.html
• NC State Bar Rules of Professional Conduct https://www.ncbar.gov/for-lawyers/ethics/rules-of-professional-conduct/
• Lawyers Mutual Practice Closing Infographic http://www.lawyersmutualnc.com/risk-management-resources/risk-management-handouts/plan-ahead-for-closing-a-law-practice-infographic

Lawyers Mutual Office Closing Handbook https://nmcdn.io/e186d21f8c7946a19faed23c3da2f0da/556712d9bf0f4cb2a916cc810687d52b/files/risk-management-resources/risk-management-handouts/closing-a-law-practice-through-retirement-moving-to-a-new-firm-or-death-of-a-fellow-lawyer/Closing_Practice.pdf