For the Defense - Vol. 5, Issue 2 - 27

that closure is not imminent."2

Second Act: Which Exit to Choose?

This article provides criminal defense attorneys
in solo practices with guidance on options for
succession planning in both exigent and nonexigent circumstances and some basic steps that
you should start thinking about long before these
plans need to be executed.

The next vital step in the planning process is
determining what form your exit will take. Will
you gradually retire by limiting your intake of
cases until you stop taking any new cases at all?
This is the route many solos choose. However, this
gradual winding down of your practice may be
a missed opportunity to benefit from the value
of your current practice. Several alternatives to
this option exist: recruit a successor lawyer to
take over your practice, merge with a small firm
or another solo, get acquired by a big firm or sell
the practice.

First Act: Planning the Process
Some steps in the planning process should
already be in place. For example, one of the
challenges at the end of a practice is the
disposition of closed files. Every attorney should
have a document destruction/file retention
policy, communicated and agreed to by the client
through incorporation into your engagement
letters. This policy should inform clients of how
long you will retain their files after their matter
ends and provide the client with option to obtain
the file or agree to its destruction at the end of
that time period.
Another step that should now be in place
is the maintenance of a business continuity
memorandum that documents your standard
operating procedures and permits others to
protect your clients and your practice if you
are unavailable or unable to do so. The memo
should describe your filing system, your calendar
and docketing system, your vendor obligations
including any space or other leases, your financial
information including payroll, payables and
receivables, your document management system,
your computer and phone passwords, your client
list, and any claims pending against you. This
document will also be useful if you choose to
retire, merge or sell your practice.

If you do not have a successor attorney chosen
to take over your practice in the event of death
or disability, Subchapter C of the Pennsylvania
Rules of Disciplinary Enforcement provides for
the appointment of a conservator to assume
responsibility for your practice.3 A conservator
is obligated to contact your clients and inform
them of the conservatorship. The conservator will
also take control of your bank accounts, and in
the event of death, charge your estate for your
services. The easiest way to avoid this happening
after death is to use your Will to appoint a lawyer
as a Personal Representative with the power
to continue to operate the business during the
administration of the Estate.4

As you consider the options, remember, this is
not a one-size-fits-all solution: each practice is as
individual as the lawyer who owns it. Criminal
practices have their own unique attributes: while
some criminal defense lawyers may have "repeat"
customers, many represent individuals who never
get into criminal trouble again. The first question
in assessing whether to try to transfer the value
of your practice through some form of sale or
merger is analyzing how your practice creates
value. Are your clients referred by former clients
or other lawyers? Do you obtain clients through
advertising? Do you have a specific criminal niche
that reliably provides a stream of income? It is
never too early to ask yourself these questions.
This type of business analysis can guide your
marketing efforts and improve your business at
any stage in your career. Also, the sooner you
start gathering this data, the more powerful your
position will be in any future negotiations to
continue your business past your retirement.

Let's turn now to the options. If you are
winding down the practice, you will simply
start by not accepting new matters and then
completing all your client projects. For a litigator,
this means that your practice will be extended
until your last case is concluded. As you begin
this process, focus on how to prepare for your
eventual closing. One thing you should do is
purchase an extended reporting endorsement
for your malpractice insurance, also known as
tail insurance. This endorsement attaches to the
final policy that is in force at the time you close
your practice. It provides an attorney the right to
report claims to the insurer after the final policy
has expired for claims that are made after the
practice is closed but that occurred during the
firm's lifetime.5
Vol. 5, Issue 2 l For The Defense

For the Defense - Vol. 5, Issue 2

Table of Contents for the Digital Edition of For the Defense - Vol. 5, Issue 2