The Best-Laid Plans
Lawyers Duty Includes Preparing
Their Practices For Incapacity
by Jane Rabe
None of us likes to think about our own mortality. However,
a lawyer's duty of competent representation includes planning ahead to safeguard
clients' interests in the event of unexpected illness, incapacity or death.
There are a number of steps to consider in preparing for others to carry on
without you.
Find Backup
The first step is to select someone to take charge. It is preferable
to find an attorney. If you are in a firm, the logical person is a partner
or perhaps an associate. However, if you are a sole practitioner, or do not
have an associate who can or will manage your practice, then you will need
to find an outside backup attorney. She should be someone you trust, who understands
the issues of managing a law practice. Choose the backup attorney wisely since
she may have access to your clients' funds.
Your arrangement with the backup attorney may require, or be
facilitated by, a durable power of attorney that takes effect in the event
of incapacity. For example, unless there is another signatory on the account,
the bank may deny access to client funds without a POA. However, upon your
death, the backup attorney's authority terminates unless your executor or
administrator authorizes her to proceed. It is thus critical that you have
an up-to-date will and that your executor be aware of the arrangement with
the backup attorney.
Establish Backup's Duty
The second step for sole practitioners is to establish the scope
of the backup attorney's duty to you and your clients. Have an agreement with
the backup attorney that outlines the responsibilities involved in closing
or selling your practice. For example, the backup attorney will need to contact
your clients for instructions regarding their files and may need to obtain
extensions in pending legal matters. Mass. R. Prof. C. 1.16(e) provides that
files be made available to clients within a reasonable time. Note, however,
that except to obtain information necessary to contact the client, the backup
attorney cannot review the contents of the files unless the clients have consented.
Your agreement may also authorize the backup attorney to provide
your clients with a final accounting and statement, to collect fees on your
behalf and, in the event of incapacity where there is no court-appointed fiduciary,
to liquidate or sell your practice pursuant to Mass. R. Prof. C. 1.17. You
should also agree as to whether or not you will compensate the backup attorney
for this work and what the compensation will be. Renew the agreement with
the backup attorney every year.
Establishing the scope of duty includes deciding whether the
backup attorney will also be your personal attorney. If she does represent
you, then even if the clients request representation, the backup attorney
may not be able to represent your clients on some matters. As your attorney,
the backup attorney would owe a fiduciary duty to you. In the event that she
discovered malpractice or ethical violations in any of your cases, the backup
attorney would not be able to inform your clients'; although obviously she
cannot mislead them as to what has occurred. And clearly, in that case, the
backup attorney would not be able to represent your clients.
If the backup attorney does not represent you, then the agreement
with the backup attorney may specify that she can inform the client of possible
errors, such as a missed time limitation, and advise the client to seek new
counsel. If your intent is that the backup attorney take over representing
your clients on their pending cases, she must obtain each client's consent
to the representation and check for conflicts of interest before providing
services to your clients or reviewing their confidential files. If the backup
attorney is not your counsel, she will still be bound by Mass. R. Prof. C.
8.3 to report serious professional misconduct to the Board of Bar Overseers.
Access To Your Accounts
Another decision to consider is whether or not you want the
backup attorney to have access to your client funds account, and under what
circumstances this access should occur. You should decide whether to allow
the backup attorney to have general access or access contingent upon a certain
event. You may want the backup attorney to decide whether the contingency
has occurred, or you may decide to have a spouse or friend hold the power
of attorney until the spouse or friend determines that the specific event
has occurred. In order to avoid problems with the bank that holds the account,
the terms should be specific, and it should be easy for the bank to determine
whether the terms are met. You and the backup attorney should review the terms
and be comfortable with them. If you do not make arrangements to allow someone
access to your client funds account, your clients' money will remain in the
account until a court takes jurisdiction. In many cases, your client will
need the funds on deposit to hire a new attorney or to complete a transaction.
A delay could harm the client's ability to go forward.
Familiarize With Your Procedures
The next step in planning ahead is to familiarize the backup
attorney with your office procedures and systems. When possible, avoid keeping
your clients' original documents, such as wills or estate plans. Introduce
the backup attorney to your office staff and be sure that your staff knows
how to contact her in case of an emergency. If your staff does not have this
information, show the backup attorney where to find computer passwords, how
to access your voice mail system, and how to generate a list of your current
clients with their addresses and telephone numbers.
Keep an updated calendar system with all deadlines and show
the backup attorney or a staff member how to access your calendar. Maintain
current time and billing records and make sure either the backup attorney
or a staff member knows where your client ledgers are kept. If your staff
does not have this information, explain your system of filing documents and
where your original client documents are kept.
Alternatively, and whether or not a staff member is familiar
with your office systems, you might find it preferable to maintain an office
manual detailing the procedures and information set forth in the previous
paragraph. Of course, in order for the backup attorney to make use of this
information, you should adhere to your own procedures.
Basic Business Matters
There are also basic business matters that must be addressed.
Some of these include making arrangements for "tail coverage" for professional
liability insurance, termination of occupancy and liability for office space,
staff support to assist the backup attorney to perform her duties, and arrangements
to pay for all of these services. Now is the time to plan and not leave family,
colleagues and clients to scramble in the event of your sudden death or disability.
Additionally, consider providing your clients with information
about these plans. If that is not feasible, the backup attorney at a minimum
should arrange for telephone coverage or a forwarding telephone number if
something does happen to you. In this way, your clients will not call and
learn that your number is disconnected and be unsure about where to call for
information.
These are steps to comply with fundamental ethical obligations
to clients. Planning and attention to detail are required to anticipate the
sudden death or disability of an attorney without significant adverse consequences
for clients. Although none of us may want to admit it, we are all mortals.
Jane Rabe is an Assistant Bar Counsel with the Board of Bar
Overseers. She acknowledges and refers the reader to Planning Ahead: A Guide
To Protecting Your Clients.
Interests In the Event Of Your Disability Or Death, by Barbara
S. Fishleder, Oregon State Bar Professional Liability Fund, April 1999.
