Navigating Succession Planning: Strategies and Essential Steps for a Smooth Transition of Your Law Practice [Webinar]

AMY LEVINE:

So, we do have a lot to cover. So, I do want to get started. Welcome to another monthly installment of Webinars for Busy Lawyers. Today our program is going to be on Navigating Succession Planning: Strategies and Essential Steps for a Smooth Transition of Your Law Practice. This is the final program in our series on the impact of aging in the legal community.

If you’re joining us for the first time, Lawyers Concerned for Lawyers is comprised of a team of clinicians, lawyers, and law office practice advisors. We provide assessment and consultation for addiction, substance use disorders, mental health concerns, and law office management for the Massachusetts legal community. Our services are confidential and free.

Now onto our presentation. We have two speakers today. I’m honored to introduce attorney Luz Carrion, who is a Senior Law Practice Management Advisor at LCL where she guides lawyers through various law practice management and ethics issues. Additionally, we have Michelle Yu joining us. She is a legal program attorney in the Massachusetts Board of Bar Overseers Office of General Counsel in Boston, where she oversees the operations of the in-house commissioner program. Previously, she was an investigator with the Massachusetts Board of Bar Overseers Office of Bar Counsel. Welcome to both of you. And at the end of the presentation, they will answer questions, so please use the chat feature for those questions. And without further ado, I turn this over to Luz and Michelle.

 

LUZ CARRION:

Thank you so much, Amy. Thank you, Michelle, for joining me, always a pleasure working with you. And thank you to our guests who are viewing us. Thank you for your time. I have to let people know that Michelle and I go way back. I was an assistant bar counsel at the Office of the Bar Counsel but prior to that I was an investigator. And Michelle Yu, prior to being with the General Counsel’s office was also an investigator, so we coincided. I say that Michelle is one of the unsung heroes of the BBO. Like Amy said, she works and runs the in-house commissioner program. Michelle, thank you again. And can you tell us a little bit more about the in house commissioner program at the BBO?

 

MICHELLE R. YU:

Sure. So, if an attorney passes away, and there’s no responsible party, no estate, no colleagues out there who can step in, then we will oftentimes seek out an attorney to be able to step into the shoes of the decedent for purposes of closing down that office practice. And it can get a little costly, can get a little crazy in terms of all the stuff that requires clean up. But we do have that service available. And also, I typically will be taking calls on a very regular basis from attorneys for estates of attorneys, from grieving family members who are now dealing with the estate and trying to figure out what to do with their loved one’s practice. And I oftentimes will be working with them so that they can do what needs to be done.

 

LUZ:

Thank you. Thank you for that. So, succession planning is a journey and it has many components, such as patient planning is not only for retirement purposes, but you should engage in this practice or set up your process in planning because heaven forbid, there’s an unfortunate event and untimely death or incapacity. You want to have your practice ready for those unfortunate events. Today, we’re going to be tackling your office processes and client files. This is one of the most important components of your succession planning strategy. And why is that? Because having these boxes like Michelle said, it’s very difficult to deal with especially for loved ones who are not prepared to deal with that. So, with that being said, let’s start with our presentation. Let me share my screen.

Okay, so the way we set up this presentation, I have my top three tips that I want to give you. Michelle will have her top three tips, and we’re going to discuss them in some detail. And then at the end, we have some final thoughts. So, my first top three tips are here in this slide deck, kind of four, really, and I’ll explain why.  But number one, consider law practice management software.

Number two, consider a paperless law practice. We don’t have box – we don’t want to have all these boxes, right.

And number three, have compliant IOLTA records. And I have a sticky note that says have an office procedures manual. That is very important for succession planning, because someone who needs to step in can get that office manual, and see how you run your practice and what do you do, what steps do you follow, right. And so the manual covers aspects that are under the top three tips.

So, let’s start with the first tip on law practice management software. There are many benefits to this. So, if you’re doing your succession planning, and still have the years of practice ahead of you and don’t have a practice management software, I strongly suggest that you consider having one, because you’re going to have everything in one place, and it will be mostly paperless. The beauty of it is that you can have your client file all client communications in one place. So, that’s easy for your client file retrieval and review and production. Also, you can have your time tracking, your billing, invoicing, payment processing under that product, and everything will be in one place. You can have conflict checks, integrated into the product. And you can see some of the benefits in this slide.

What I propose that you do is I have the suggested tasks on the right-hand side of the presentation. I suggest that you start by watching a webinar that we have from my colleague Laura Keeler, and she goes through the law practice management software features and considerations. It’s a great program. There’s also some tools here that I have, Lawyerist has a great page on product reviews. For these products, they have a tool that will match some of your needs. I highly recommend that that feature.

Talk to your colleagues. That’s easy. Identify which features you absolutely need and are must haves. And then the ones that are nice to have. And finally, demo the product, do a free trial before committing.

Let’s move on to paperless law firm or a paperless law practice. This is again very important for having everything mostly paper-free. When it comes time to for you to retire or heaven forbid if something happens to you and someone has to step in, you know, they don’t have to go through paper files that are spread out throughout the office.

And you know, one thing, I apologize, I should have said before we move on to this. If you’re close to retirement, the law practice management software might not be the best product for you. There might, there are other products that might be a better fit. And again, this is if you are very close to retirement. So, if you’re in that situation, I suggest that you contact us and we can talk more about your needs and where you’re at in the process.

Now back to the paperless law practice. We have also a great webinar from Attorney Sofia Lingos, I suggest that you, again, set aside some time and for example, you can do, let’s set aside two hours. The webinar is not two hours long, but you can see the video or the webinar, pause it, take notes, develop an action plan, right, that you’re going to implement or follow up based on the webinar.

The other thing that is important when it comes to a paperless law practice is that you develop your paperless workflow, okay? And you follow it. So, for example, develop your workflow as to how are you going to handle paper coming in, versus paper coming out. Like Sofia says, paperless does not mean paper-free. We still have some courts, government agencies, they send regular mail. Some attorneys, do send, and clients, send paper to your office, right. And sometimes you have to send paper out. So, you’ll have to be very disciplined about this. And once you develop your workflow, you have to stick to it.

So, for example, someone who is doing, scanning some documents, but not others, that’s going to be difficult if you have a situation where you become incapacitated or, unfortunately, have an untimely death, and then someone has to step in and figure out what’s electronic, what’s paper. You have to stick to your paperless process, right, in the scanning discipline.

So, I have this suggested task, that, for example, like I said, you can set aside two hours a week, focus on one task. You know, if you have more time, great and, you know, add more time, but the way for this to work out, is that you divide it into chunks of actionable time that you can, in tasks that you can manage. Don’t try to tackle all of this at once. You’re going to get frustrated, and you’re not going to do it.

So, succession planning is a process, right? And we want to help you in breaking down these suggested tasks and stick to them. That checklist from Uptime LexWorkplace is really nice, because it covers a lot of the stuff that we’re going to be talking about in this webinar.

Some good habits to develop and by the way, this is in some way connected to the rules. Because you’re going to have to do this to comply with the Rules of Professional Conduct.

So, backups, you need to routinely backup all digital records of the practice. You have to maintain a central calendaring system with all for the filing deadlines and follow up dates. This is very important when it comes time to do your succession planning. Because if something happens to you, if there’s an attorney who’s coming in that one of the first things that they’re going to do is look at your calendar. What do you have upcoming? Do you have to be in court next week? Did you have to file a complaint because you’re going to, you know, miss the statute of limitations? Do you have to comply with discovery? So, all of that needs to be in a centralized calendar, so that someone can come in and try to figure out, ‘Okay, this is what we have to focus on, let’s say, for the next first two weeks,’ right.

And also, we’re going to talk about that later, is the client or the office procedures manual. When someone who’s covering or assisting you, or a loved one, one of the first things that they’re going to do as well is look for that policy procedures manual.

Finally, you have to maintain current time and billing records. This is important because if you still have, you did work, and you were not able to bill your clients because you became incapacitated, or something else happen, someone can come in and figure out, ‘Oh, we need to bill this client.’ Or on the other hand, ‘This client paid a retainer. He was not or she was not able to, you know, render the service, we have to do a refund.’ So, these are things that are not only required by the rules, but are good habits that you need to be disciplined about. It will make it way much easier when you’re doing your planning for terms of succession plan.

The office procedure manual – here are some basic requirements from Lawyerist. Number three is going to be your focus. And… the bulk of your office procedures manual. I tell people, ‘You don’t have to write a manifesto,’ right. Just do an outline, a simple outline with the steps that you follow, right, for each workflow. There’s an ABA book that is really good. It’s a little bit pricey, but it has some, it’s an e-book. So, it’s an electronic format. And it has some templates, so you can check the index that is linked there to see if this is something that you would be interested in, in terms of investing. Because, for example, a solo practitioner who doesn’t have any staff, the book has a lot of templates for employees, right. So, you know, it’s a judgment call for you, but I recommend the book because it has templates and it has something to work with. You don’t have to start from zero.

IOLTA. So, basically, these are your IOLTA records that you are required to have. I suggest that if you’re thinking about having trust accounting as part of your law practice management software, you can use the Client Funds Manual from the MA IOLTA Committee. It has some templates at the end.

And when you’re shopping around for trust accounting software, just tell them, ‘Hey, listen, these are the columns that I need on my ledgers, or my three-way reconciliations. Show me what you have.’ And compare, right? Because we do require in Massachusetts three-way reconciliation, some of the products don’t have three-way, some of them have two-way and then you have to do the last step with the bank statements. So, you have to make sure that you’re getting three-away and that you’re getting running balances. Our rule requires that these ledgers have running balances. So, you have to make sure that the software has that in their reporting or record keeping.

We don’t have time to go into the changes that are coming for the IOLTA rule. But I will encourage you to read the article that is under number one in the new rule. Because now you’re going to have to follow some new steps if you have unidentified or unclaimed funds in your IOLTA account. If you have questions, you can schedule an appointment or a consult with us and we can talk about it. But please read those resources. And now, I will turn it over to Michelle.

 

MICHELLE:

Thank you so much. So, I’m just going to be piggybacking on a lot of what Attorney Carrion was saying. So, we want you to reduce your volume. If you have what’s called an intrinsically valuable document, these are things that are special. And we’ll get into that and talk about what that involves. They’re special, and you have a lot of headaches if you’re holding on to them, a lot of responsibilities. And so, it’s really important to be able to identify and return them so that, as soon as you possibly can, so that it doesn’t become a headache for your family, or for a colleague who takes over for you in the event that you’re trying to, that you become incapacitated or passed away. Or if you’re just trying to take down your shingle, you don’t want to be stuck with this huge homework assignment at the end of your practice. And then we’re going to talk a little bit about file retention policy. Again, we want reduction of volume.

So, Luz, if you’d go onto the next slide. So, client files, please look at the rule to be able to identify what all is involved with that. Lots of stuff are involved in the client file, and you want to make sure you’re complying with the rule. Again, it’s 1.15A, and there are updates to that rule that are happening in September. So, you’ll want to check that and be able to note what the new things are. We’ll get into that in a little bit. Okay, next slide.

Okay, this is the biggie – intrinsically valuable documents. So, these are ones like the original inked will, the original inked trust. If you’re in real estate, an unrecorded mortgage discharge. Very scary stuff, but very important stuff. If you had any negotiable instruments, things like that things that are of their own nature, special. If you’re an immigration law, and you have an original birth certificate, or divorce, or whatever the case may be, it may become an intrinsically valuable document if your client is not planning to go back to their home, or their country of origin, and you want to make sure that they are protected as this isn’t something where you can have an original birth certificate from Boston City Hall and just access it at ease.

So, you may have original documents like that birth certificate from Boston City Hall, that is not an intrinsically valuable document. And sometimes there are case specific ones, a fraudulent endorsement, the original document may become an intrinsically valuable document. You would know, based off of your own cases, whether you’re holding them or not. If it’s your practice, to hold on to especially, I’m going to be harping on the wills and trusts, the original inked wills and trusts for your client. You need to keep their current addresses, stay in contact with them, and, you know, give it back to them at some point. Because otherwise, the safe that’s holding 400 wills will be a real headache when you’re trying to get, take down your shingle and deal with that. So, it’s, it’s a big deal, and you want to address it as soon as you possibly can.

Of course, they, at some point, cease being intrinsically valuable – client passes away, but you have to be, keep monitoring it to be able to be aware of that situation. There are some appropriate governmental repositories for these, if you cannot, you’ve lost your client, you don’t know where they went, and you’re still holding their will. You’d have to file with the filing fee, in the correct probate court to be able to hold it. That’s going to be very costly. So, again, try, try to not hold them. And then if you are having to hold them understand you’re taking on a lot of responsibility to be able to be compliant with our rules. Okay, Luz, if you’d move on to the next one.

Okay, so again, you want to reduce your volume. Have – be aware, again, of what’s in the rules, that your notes are part of it, that drafts may be needed to stay in there. Just be aware that you want to sort of define what you need to hold on to, and what would have to go back to a client, if and when a client asks for their file back. Okay. Move on to the next one.

Another great tip – one headache I’ve seen time and time again, is files in the attic, files in the basement, files at your office space that you’re leasing, files at home, files spread out everywhere. If you’re making your office management manual, identify where things are, and hopefully you’ll get to a point where you can consolidate. When any sort of disruption happens – disability, death, or the like –one of the top things is to identify what are your active, your current, your important calendared events, the things that are happening now. But then you also end up dealing later with this large backlog if you haven’t reduced your volume of files and stuff already. So, again, to the extent you can reduce the volume, the better off it will be when you’re taking down your shingle or if a disruption occurs to your life. You want to, I guess we can move on to the next one.

And then file retention policy, the Rule 1.15A lays out a file retention policy for you. And gives you sort of the baseline six years, unless there’s a lot of exceptions. If you do criminal law, and you have the skill and abilities to handle capital murder type cases, check the rule, you’re going to be holding it for the life of the client. These are important things to be aware of. If there’s a minor, check the rule, if that’s the client. If you’re dealing with any criminal, again, check the rule, it typically goes, becomes 10 years. And then also, if you’re aware that there’s, you know, a suit pending, perhaps malpractice claim, or you’re getting a call from Office of Bar Counsel on it, you’re going to be holding the file, and even if it was something due for destruction under 1.15A.

And just to be clear, we take it to mean that when you’re securely destroying a client’s file, it’s getting shredded. Just to be aware of that. intrinsically valuable documents don’t have these timelines. They’re, you’ll be holding them until they’re no longer intrinsically valuable. That’s a really, really long time and may outlive you. So, that’s a challenge that you want to be addressing and dealing with. So, if you deal with CPCS follow their rules.

And also, please if you’d go on to the next slide, inform your clients about your retention policies. Spell it out. It could be in a fee agreement, could be in a standalone document that you have for your intake, and then again, it’s also helpful to remind folks about it at the ending of a representation. You know, give them that heads up, they may want their file, they may already say, ‘No, I don’t want any of this stuff.’ And sign off saying that they want you to go ahead and destroy it. That would be permissive. You just want to be able to follow the Rule 1.15A, and be able to address those needs with your client and let them know about it. Okay. And then next, I guess, next slide. Yep.

So, again, I’m harping a lot on the intrinsically valuable documents, but it is a real headache for folks. So, you want to make sure that those are addressed that if you have any trust property, the money sitting in the IOLTA account, when the representations over, that balance should be down to zero. So, you want to make sure that you’re, again, following up with what Ms. Carrion was saying earlier, you want to make sure that you’re dealing with your IOLTA. And that it’s not something that’s getting slipped away. And make sure you check all the boxes and make sure things are taken care of with those files, again, reduce the volume, and it will be easier for you at any stage in your practice. All right, next one, I believe.

And then dealing with closed files. There’s many different ways you can organize them. You will be retaining them for the period that’s under the 1.15A unless you’re getting specific client permission to get rid of it in advance. So, you want to be able to note which ones are the intrinsically valuable documents. You want to be able to possibly segregate them by the year of destruction. However you need to address them, but you want them in some level of organization and secured so that you can keep those files safe until you can safely destroy them.

And then again, if you’re holding the stuff for the client, intrinsically valuable documents and the like, maintain their current contact information. Very, very crucial. And a habit possibly in your manual, an identification of where that client information would be located. If you just have it on your desktop as x, y, z, someone coming in, a colleague might not be able to figure out, ‘Oh, that is where the client list is located with the current contact information.’ So, that’s another thing that would be helpful. Okay, we can move on.

So again, have your shred parties when you’re able to and feel good about it, know that you’re getting, you know, your volume down and, but do realize 1.15A is going to be your friend. I refer to it all the time when I’m assisting folks. And it has so many little nuances with it, you want to make sure that you’re following the rules, you’re not destroying stuff, if there’s a court order to keep something there with discovery. I mean, just because 1.15A says you can destroy within so much time, there’s a lot of exceptions. So, you want to make sure that you’re following them. If it’s not an intrinsically valuable document, you could go ahead and move to that paperless situation for your older ones and discard the physical documents, again, if it’s not one of those intrinsically valuable documents. So, they’re special, and they have to be dealt with as special.

Also, I mentioned before, in September, there’s going to be some rule changes. And one of them will be regarding document retention. You’ll be holding for 10 years files related potentially to unidentifiable funds or unclaimed funds because you’ll have to be holding things for longer if you fit into that category and are having to deal with that. So, just be aware that that starts in September of this year. Okay, next one.

 

LUZ:

So, this is our final slide. And we want to do this jointly, we have seen these situations in our experiences. So, why is it that you need to start now, and getting your practice ready as part of your succession planning? You have spent most of your adult life building your reputation and your legacy for being a caring attorney, a diligent and a competent attorney. Right, you want to preserve that legacy.

And so, for example, one of the things that we’re seeing recently is that the Client Security Board has seen an increase in awards that were paid to clients of deceased lawyers. So, what happens if you’re not aware of the Client Security Board, they deal with refunding our clients in a variety of circumstances. So, one of them that is relevant for this type of, for our program today, is that if an attorney dies and then they cannot figure out, you know, where the funds are in the IOLTA and we have clients that paid a retainer but, you know, the services were not rendered, because, you know, the lawyer is not available anymore. So, those clients have to work with the estate, or with the attorney who’s taking over, or the family, in trying to recoup those funds, it could be very time consuming, for the clients to then try to get that money before they can file a claim with CSB.

And CSB, they try to, you know, they do handle these matters in a very sensitive way. And they make sure that people understand that, you know, this award was when the client was deceased, and if there was no discipline attached to it, you know, they clarify that. But the problem is that, you know, your reputation could be at risk during this process, right. Because it’s going to be the attorney who didn’t, you know, they didn’t have the IOLTA kept properly. And then the clients had a really hard time getting their unearned funds refunded.

Same thing with the commissioner rule, that’s where Michelle gets involved, Attorney Yu gets involved. If there has to be a commissioner appointed to handle the files and the trust accounts, that could be a very long process. And it could be expensive, because the estate, or the attorney, you know, if the attorney is incapacitated, they have to pay for these services, for the commissioner services. So, this could be then also, the Office of the Bar Counsel has an opportunity to be heard during that process of the appointment of the commissioner. So, these are processes that, again, there are headache, and you want to preserve your great reputation and your legacy for professionalism, you know, your reputation for taking care of your clients, right, and then your reputation in your community. Michelle, what do you think about the loved ones, thinking about the loved ones.

 

MICHELLE:

Of course, so thinking about the loved ones. I have talked with so many grieving families who are overwhelmed with the loss of a loved one. But now, there’s this added headache of dealing with an office closure. And not even knowing what type of law the person practiced, not even knowing any clue where anything’s located. It’s, it’s really overwhelming. And not only they’re grieving, but now, it’s like, ‘Okay, did I even know what they were doing all these years? Did I even know what’s going on.’ And of course, they want to, you know, continue with a good reputation, be able to take care if the clients. It mattered to you, so it matters to them. But it’s a lot, and many times they’ll hire an attorney who then will help them through this process. But that’s really, it gets expensive. It gets to be a lot. And you know, going through trying to figure out the money situation or things like that, it can be quite overwhelming.

So, the more you can use this, make it smaller for if you’re taking your shingle down yourself, or if someone else has to step in with some disruption. You want to have your loved ones, or your colleagues, or whoever would be the one stepping into those shoes, to be as informed as possible, to have had the sometimes awkward conversations of ‘You know, this is, this is where the practice manual book is, this is in case anything happens to me.’ It may feel awkward, but it’s really crucial that folks have some degree of knowledge as to what your succession plan is, and to have the tools to be able to effectuate that succession plan, really important.

And again, same with letting your colleagues know, if you’re getting someone on board as part of your succession plan and incorporating them as a backup… There’s a lot of steps you’ll want to take. And you’ll want to have some very open and candid conversations with those colleagues so that they can be able to help you and possibly you help them if and when the time arises. And again, just talking to folks, let them know, just like you would encourage your clients to do when they’re making their own succession plan to have those conversations with their family and their colleagues so that their wishes can be effectuated.

So too, for this one, to be able to tell folks what kind of practice you have. Because if they’re making a call to me, that’ll be probably one of the first things I’m going to be asking… because what an estate planning attorney is dealing with, it’s very different than a criminal defense attorney with a murder trial next week. It’s a big range. So, and again, having those contact lists of folks for an emergency and letting them know what they would need to do. Really, really crucial to make these disruptions be it small, or large, smoother for yourself, your family, and your clients.

 

LUZ:

Okay, thank you so much, Michelle. I’m going to stop sharing the presentation, we have a couple of questions. So, let’s take a look at that.

 

MICHELLE:

Okay.

 

LUZ:

Let’s see. So, ‘If I’m an attorney, who is – I’m sorry, if an attorney is incapacitated, or passed away, and I am a family member, may I hire another attorney to deal with these responsibilities?’

 

MICHELLE:

Yes, they – someone can be acting as an agent for you to be able to address the office closure, get folks their money back. The bank might require that the personal representative of the estate be the one who’s the signatory, but again, you can work that out and deal with, you know, the agency as necessary.

 

LUZ:

Okay, and I think we got another question. It’s actually, I think it’s a comment, a compliment. ‘Thank you for the valuable information. Just want to confirm that the recording of the webinar and the resources referred to will be available afterwards.’

 

LUZ:

Absolutely. We will make the recording available, you will get an email with the recording, the link to the recording, and then the slides will be available for download within that page with the recording. So, yes, this will be available. And I think I have another question. Let’s see.

‘If no one is available, no family, who pays for the closing of the practice?’

 

MICHELLE:

Oftentimes that will be paid out of your own bar dues. As part of the in-house commissioner, that’s a very rare situation where there’s nobody left to sort of take that over, or there is an estate, but the estate is completely bankrupt. We will, on a case-by-case basis, evaluate whether we need to step in and if so, we’re not going to be bankrupting someone to be able to pay for that. But it’s something that it, by the rules, it’s supposed to be paid by the estate. So, the clients, we won’t let the landlord dump the client files on the street, but…

 

LUZ:

It doesn’t – a final word on that. Client files when you’re shredding them, and this is the slides, make sure that you comply with the confidentiality provisions. And if you’re holding personal information under Chapter 93H, there is 93I that deals with destructions. So, you cannot be dumping these, your client files, on the recycling bin, right? Or calling, you got, you know, one of these holding companies and just or send them with your, those companies, or put them in your trash, or leave them in the office, you know, when the lease expires. You have to, yeah, when you’re disposing of files, you have to follow, protect confidentiality.

 

MICHELLE:

And no one wants to be that headline of having the stuff in the dumpster flying across the parking lot and everyone sees it. That’s horrifying. And I’m confident Bar Counsel would read that headline, and that would not be good, so.

 

LUZ:

Okay, well, thank you so much, Michelle.

 

MICHELLE:

Of course!

 

LUZ:

Always a pleasure working with you.

 

MICHELLE:

You as well.

 

LUZ:

And I think we have some final words from Amy.

 

AMY:

So, first of all, Luz and Michelle, this was such a wonderful presentation. I loved it. I’m not a lawyer, but I still learned quite a bit. I always find the law so interesting. And I also wanted to just say thank you to everybody else who joined us today.

And hopefully you will join us again for our next installment of Webinars for Busy Lawyers. And that’s going to be on April 25th. Dr. Tracey Meyers is going to be presenting on Why Yoga and Mindfulness? The Science Behind Why It Works. And so, hopefully you will join us for that.

Also, please help us improve our programs by filling out a survey that’s going to be sent to you pretty much right after this, after we end this. So, again, you would be helping us out and thus helping you out.

 

MICHELLE:

Alright, thank you.

 

AMY:

Thank you so much. Okay, bye.

 

MICHELLE:

Take care. Bye.