May 17, 2017
Your Ethical Duties to Plan for Law Practice Succession
Unlike some states, California does not have specific legal ethics rules that require attorneys to adopt a law practice succession plan, there are several Rules of Professional Conduct that impose equivalent duties to plan. It’s not always easy to think about circumstances that could render you unable to continue practicing law–accidents, illness, disability, planned or unplanned retirement, or untimely death– but these events do occur. Under any of these circumstances, your clients’ interests, as well as your own, must be protected.
Every California has a duty of competence under CRPC Rule 3-110, which means that you have an obligation to take reasonable steps to ensure that client matters will not be neglected in the event of death or disability. Unexpected events could have serious impacts on your clients. Important client matters, such as court dates, statutes of limitations, or document filings, could be neglected if you fail to plan for these contingencies. California attorneys have a separate duty to keep clients informed of significant developments, under CRPC Rule 3-500. This rule has been interpreted to impose duties on attorneys to advise clients regarding change of employment, and generally also implies a duty to plan for client communications in the event of your death or incapacity. You also have a fiduciary duty and duty of loyalty to your clients, which means you must protect your clients’ interests in various contingent circumstances, including your death or incapacity. CRPC Rule 3-700, related to termination of employment, provides an analogous scenario. That rules requires attorneys to take reasonable steps to avoid reasonably foreseeable prejudice to client related situation in which they will no longer be able to represent client.
Law practice succession planning is prudent. It’s good for clients, and it can be good for business, if handled properly. But it’s not just a prudent step: taken together, these rules mean that California attorneys have affirmative obligations to make plans for law practice succession in the event of an unplanned, or planned, event that removes them from the practice. The good news is that a properly drafted law practice succession plan will meet your ethical obligations, protect your clients, and permit you to maximize the value of your practice if the worst happens.