Estates & Trusts Program on Solo Attorneys and Small Firm Succession Planning

A legacy of confusion, havoc, and disaster is not what most attorneys hope to leave behind when a solo or small-firm practitioner dies without a succession plan in place. A succession plan is exactly what a lawyer requires to uphold the responsibilities and ethical duties to his/her clients and profession. The Estates and Trusts Committee held their monthly education seminar on Succession Planning for Solo Attorneys and Small Firms at the courthouse on January 8, 2015. Chester H. Hobbs IV, of Bodie, Dolina, Hobbs, Friddell & Grenzer, P.C. discussed the risks and pitfalls attorneys and families face without succession planning in place and the ethical requirements involved.

Picture14First, Mr. Hobbs spoke about his own personal experience with a deceased attorney’s practice and how he prepared it for estate administration. He explained that the administering attorney needs to be mindful of the clients, especially hearings, deadlines, and other aspects of representation that may expire without any reversed remedy. The administering attorney must also balance the needs of the deceased attorney’s clients, family members, and the Maryland Rules of Professional Conduct, including, but not limited to confidentiality, competence, conflicts of interests, and communication in order to prepare for the sale of a deceased attorney’s practice.

Additionally, the ethical rules not only govern the sale of a law practice precipitated by death, but also disability, disappearance, appointment to judicial office and practices in existence for more than five years. Some interesting aspects of the ethical requirements under MRPC 1.17 include that the practice must be sold in its entirety and cannot be piecemealed even by an area of practice. For instance, an attorney who owns both an Estates and Trusts practice, and Bankruptcy practice could not sell each area of practice to separate firms or attorneys, the entire practice must be sold as one.

The seminar concluded with a discussion of business valuation, specifically valuing a law a practice and determining the value of goodwill. Mr. Hobbs generously provided the attendees a succession planning checklist. Also, he strongly encouraged solo attorneys and small-firm practitioners to begin planning not only for death, but also disability, retirement, and any other unforeseen triggers that may require the sale of an attorney’s practice. A well written, detailed outline and agreement should be in place to benefit the attorney’s clients, his/her family, and the professional community.