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Getting your succession plan started
Have you planned for what would happen, both professionally and personally, in the event of illness or incapacity? In taking time to put a succession plan in place, you will be protecting your clients, your practice and your family.
By Deborah Gillis, Q.C.
Succession planning is more than just planning for retirement. In this article I discuss why you also need to plan for other contingencies, such as long-term illness, incapacity, or death.
Have you thought about – and planned for – what would happen, both professionally and personally, in the event of your sudden long-term illness, incapacity, or death? If you were diagnosed tomorrow with an illness that resulted in your being away from the office for an extended period of time, would you have a practice to return to upon your recovery?
Succession planning is critical for all businesses, but especially so, for solo and small firm practitioners who do not have other partners or associates, who can step in and share the work in transitioning their practice, and meeting clients needs on either a short-term or permanent basis.
If you have not taken the time to plan for such contingencies, commit now to taking time to put a succession plan in place. In doing so, you will be protecting your clients, your practice and your family. Without a succession plan in place, you put your family at significant financial risk and emotional upset at a time when they are least able to cope. None of us want that.
Getting started: Developing your own action plan
As with any project, getting started is often the hardest part of the process. To start, I suggest that you contact a colleague or colleagues who are also interested in putting together a succession plan. Divide responsibilities for reviewing and reporting on available resources, including those that might be available from your law society. Commit to specific times when you will meet either by phone, via an online community, or in person to discuss the steps to be taken, the progress you have made, and suggestions you might have for each other to keep your planning process moving forward.
Assisting lawyer
Consider who you might ask to be your assisting lawyer. An assisting lawyer is the one who will step into your practice on either an emergency or long-term basis in the event of your incapacity or death. There are a number of terms that you and the assisting lawyer or firm will have to negotiate, some of which may be unique to your particular circumstances. What is expected of the assisting lawyer or firm will probably be different, in relation to a long-term illness from which you hope to recover, as opposed to your incapacity or death.
Develop a list of duties that you would expect of your assisting lawyer as well as particulars of your general office routine and practice so that you and your assisting lawyer can begin discussing a plan that would ensure that he /she will have enough information and authority, to step in when needed, to do what is necessary to protect your clients and your practice.
Meet with the lawyer to negotiate the terms of your agreement. Plan to review this agreement at least annually to ensure
that it continues to adequately meet your needs and your clients’ needs.
File organization
File and office organization is critical to an orderly transition of your practice. Maintain a central calendaring system that is detailed and updated daily, so that whoever steps into your practice can quickly determine filing deadlines, meetings and appearance dates.
Get and keep your files in order. Get in the habit of keeping good running notes for each of your client matters. This will make any transition easier. Well documented files and well-developed records management systems are critical to the orderly and cost efficient transition of your practice. If your office and files are poorly organized you will probably have difficulty finding someone to agree to act as your assisting lawyer, or the cost of their services will increase dramatically, because of the disorganization.
Make sure that you document details of conversations, meetings, advice given and instructions received, in your files. A well-documented file is critical to the successful defence of a malpractice claim; even more so, if you are unable to respond personally, and your insurer has only your file to rely on.
Policy and procedures manual
If you do not already have an office policy and procedures policy manual, develop one now. This would be another good group project, if you find it too daunting a task to start on your own. The end product will be an extremely important resource for your assisting lawyer when transitioning your practice.
A resource that should assist you in this regard is:
Law Office Policy & Procedures Manuel, 5th Edition, by Robert C. West and Howard I. Hatoff (ABA Law Practice Management Section, 2006)
Trust account balances
Review the trust account for funds that you have been holding for more than 30 days. Determine why you still hold those funds and what action needs to be taken – bills rendered, releases registered, undertakings fulfilled, funds returned to clients? Trying to sort out the reason for stale trust account balances and what should be done with them will be extremely time-consuming for your assisting lawyer, and expensive to you or your estate.
Billings and accounts receivable
Commit to keeping detailed time records and to billing clients at least monthly, so that your assisting lawyer is not left with the task of rendering a bill that should have been sent out months earlier, or one in which value to you or your estate is lost, because you have not kept accurate time records.
Insurance
Review your personal life, disability and business expense coverage to determine if it is adequate. Increase it immediately, if it is not. The Canadian Bar Insurance Association provides coverage for lawyers, their families, and employees. Rates are extremely competitive. You do not have to be a member of the Canadian Bar Association to take advantage of their products.
Additional resources
I hope this article will prompt you to begin your succession planning now. For more information on this topic, I recommend that you check with you provincial or territorial law society, and the Canadian Bar Association for resources and tools that each might have available for you. Many have resources available online.
Deborah Gillis, Q.C. is a lawyer and succession planning consultant in Bedford, N.S. She may be reached at deg@eastlink.ca.
Relevant links:
Succession Planning Toolkit - Law Society of Upper Canada
Succession Planning - Law Society of British Columbia
The rocky road of succession planning - CBA PracticeLink article in National Magazine
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