If you follow our blog, you know that we have been running an awesome series entitled the ” Lawyers in Transition Toolkit.” This series has provided great succession planning tips. The series explores various options when it comes to succession planning. There is even a post that helps you with mentally preparing for “the transition.” Have you missed any of our blog series? No problem. We’ve got you covered! Get all caught up on our recent blog series below!

Lawyers in Transition Part 1– Get Your Mind Right : The most important tool in your Lawyers in Transition toolkit is one you already own and know how to use. It’s your thinking.Thoughts drive emotions, and emotions inspire action. What you think determines what you do. Which means the future begins with what’s in your head right now.

Lawyers in Transition Part 2–Imagining a Life Beyond the Law : Now that you’re thinking positively about an upcoming change in your law life, you’re ready to tackle the million-dollar question: what comes next? Pretend you have a crystal ball. Gazing into it, you can see your life after the law. What does it look like?

Lawyers in Transition Part 3–When is it Time to Make a Change?: Timing is always important, but when it comes to making a career move it can mean the difference between failure and success. Do it too early, and you might find yourself in professional limbo. Wait too late, and you risk facing a personal or professional crisis.

Lawyers in Transition Part 4– Finding the Right Words to Say: One challenge for lawyers in career transition is explaining to others what you are doing and why. You might even have trouble explaining it to yourself. This is true for transitions that are voluntary (retirement, relocation) and involuntary (disability, disbarment). But there are good reasons for having a ready response to the questions: “What’s up with you? What are your plans?”

Lawyers in Transition Part 5– Don’t Call It Retirement: If you’re planning to hang it up after a long, productive law career, there’s one word to steer clear of. You can say you’re entering a new phase of your life journey. Say you’re repurposing, reimagining or rebooting. Say, “Hooray, at last I’m free!” Just don’t call it retirement.

Lawyers in Transition Part 6–Keeping the Law Practice in the Family: The family law practice – especially one that spans generations – is a wonderful thing.And increasingly it’s becoming rare and endangered.

Lawyers in Transition Part 7– Come Up With A Plan Plan Today for a Smooth Transition Tomorrow: The best way to ensure a successful transition from the law is to have a plan – and the sooner you start planning, the better.

Lawyers in Transition Part 8– Financial Planning Prepare a Financial Plan for your Transition: It might surprise you to know that lawyers aren’t always great at laying a sound financial foundation for their future. This is so even though they have ably assisted clients in doing so for years. Can you say, “The shoemaker’s children go barefoot?”The good news is that you don’t need a background in tax law or estate planning.

Lawyers in Transition Part 9– Health Planning Plan for Your Health During a Career Transition: As you prepare for your post-practice future, health planning should be a top priority. After all, even if you’ve laid a golden financial foundation, it will amount to little if you’re not healthy enough to enjoy it.

Lawyers in Transtion Part 10– Can’t Afford to Quit: Lurking just below the surface of a transitioning lawyer is a bundle of anxieties – and the root cause is usually money.Naturally, the lawyer who is leaving practice will be stressed about the financial future. But their families will be concerned as well. And so will the partners and remaining members of the firm. Can anybody afford this transition?

Lawyers in Transtions Part 11– Time to Quit, But Don’t Want To?: You know it’s time to step away from full-time practice, but you’re having trouble doing it.And the longer you’ve practiced, the harder it is. It might help to change your perspective. First, cut yourself some slack. Stepping away from something that’s been a major part of your life is no easy thing.

Lawyers in Transition Part 12– Build a Deep Bench: A key to succession planning for your law practice is to develop a deep bench of in-house talent. That way, when a major player departs, there will be a strong supporting cast to continue the firm’s legacy – and perhaps even expand it into exciting new realms.

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.

Lawyers in Transition Part 14– Important Tips on Selling Your Law Practice: It has been 21 years since North Carolina adopted a formal rule regarding the sale of a law practice. But it’s been only recently that the concept has really caught on. And according to the state’s largest law firm brokering and transition service, continued growth is expected. “The legal profession continues to change and with that change come new challenges as well as new opportunities,” says the website for The Law Practice Exchange.

Be sure to register for a special event presented by Lawyers Mutual Consulting Services and The Law Practice Exchange–” Transferring Ownership of Your Law Firm to the Next Generation.” This event will be held on November 7th at Great Wolf Lodge in Concord, N.C.  

It has been 21 years since North Carolina adopted a formal rule regarding the sale of a law practice.

But it’s been only recently that the concept has really caught on. And according to the state’s largest law firm brokering and transition service, continued growth is expected.

“The legal profession continues to change and with that change come new challenges as well as new opportunities,” says the website for The Law Practice Exchange.

Selling a law practice is obviously different than selling a used car. For one thing, clients are not Chevys and Fords. There are a host of ethical and professional concerns.

Rule of Professional Conduct 1.17 (adopted in 1997) sets out specific ethical obligations – from notifying clients to collecting unpaid fees – that must be met in a law practice sale.

“The practice of law is a profession, not merely a business,” says Comment 1 to Rule 1.17. “Clients are not commodities that can be purchased and sold at will.”

Preserving Your Legacy

“We try to take what an attorney or group of attorneys has built and preserve it for the future,” says attorney Tom Lenfesty, attorney and founder of The Law Practice Exchange.

Accordingly, in addition to providing listing and brokering services, the Exchange helps selling attorneys do the following:

• Preserve Client Goodwill
• Provide Exit Strategies & Retirement Options          
• Promote Mentorship
• Provide Alternative Growth Options                      
• Serve Clients Continuously
• Prepare Practices for Change and Transition   
• Develop Succession Strategies
• Search for Potential Buyers Confidently and Confidentially

“Rule 1.17 of the North Carolina Rules of Professional Conduct is the seminal authority on your responsibilities during and after this process, laying out certain conditions precedent to the ability to sell and providing guidelines on the post-closing transition,” writes Lenefesty here. “In addition, there are a number of other ethical responsibilities that apply depending on the structure of the transaction (i.e. merger v. sale).”

Lenfesty says it is also critical to prepare a timeline. “Knowing what is needed and if you can provide the time and effort to transition the clients and their associated goodwill to any purchaser is vital,” he writes. “Each practice is unique and specifics should be worked out not only on total time, but how the day-to-day roles will work.”

Another key: Rule 1.17 says written notice of the proposed sale must be sent to all clients who are currently represented by the seller and to all former clients whose files will be transferred to the purchaser. Although it is not required, it is a good idea to place a notice of the proposed sale in a local newspaper of general circulation.

5 Practice Tips for Selling a Law Practice

1. Make sure you are ready. “Selling your practice can be very draining mentally, emotionally, physically and financially,” says Lenfesty. “Take the time to talk it through with your loved ones. What are their expectations? What are yours? Are they reasonable? Does it matter? Make sure you are fully prepared for these and other transition consequences.”

2. Review Rule 1.17. Download a copy and follow it to the letter. Call the State Bar and talk to an ethics counselor for guidance.
3. Clarify the scope of the transaction. Rule 1.17 applies to the sale or purchase of a law practice, or an area of law practice, including good will.
4. Read this article. It lists eight important considerations – from valuation to tax aspects – involved in a law practice sale.

1. Talk with your legal malpractice insurance provider. Maintaining adequate coverage through and beyond the sale of your practice is vital. Talk with your provider about an Extended Reporting Endorsement, or “tail” coverage.

Sources:

·         NC State Bar Rule 1.17 https://www.ncbar.gov/for-lawyers/ethics/rules-of-professional-conduct/rule-117-sale-of-a-law-practice/

• Key Considerations in a Law Practice Sale https://www.lawyersmutualnc.com/risk-management-resources/articles/eight-key-considerations-in-a-law-practice-transition-agreement

• The Law Practice Exchange TheLawPracticeExchange.com