By Jim Calloway 

Lawyers take pride in their loyalty to their clients, representing them to the best of their abilities. But there are steps you can take to protect your clients even if you are not personally available to assist them.

For this estate planning-themed edition of the Oklahoma Bar Journal, we have chosen to discuss “estate planning” for a lawyer’s law practice. Lawyers who do estate planning for clients know that there are often procrastination and delays caused by clients who know they need to have a plan but still hate thinking about their own demise. It is an easy thing to put off. But while clients who fail to execute wills and other estate planning documents may miss out on benefits, and their heirs may incur additional expenses, at least laws govern intestate succession in probate.

But a lawyer who dies or disappears, leaving no instructions about handling client matters, can generate hardships for clients and the lawyer’s heirs. I hope that every lawyer will take the opportunity to download and review the OBA’s Planning Ahead Guide: Attorney Transition Planning in the Event of Death or Incapacity. Instructions on downloading it are available at the end of this column.

Most lawyers will benefit from reading this detailed information or at least skimming through the document to make certain they have addressed everything. But while all lawyers have these ethical duties, the extent to which a lawyer in private practice must take affirmative actions often depends on the practice setting.

Scenario 1: You are a recent graduate who has taken a job as an associate with a 15-lawyer firm that has been in operation for many years. Here, unless something you observe gives you reason to be concerned, you can assume the existing law firm has this handled. Usually, making assumptions about something so important would be risky. But there’s another important factor to consider: If something takes you out of action, either temporarily or permanently, there are lawyers available in the firm who can immediately step in. They will be motivated to do a good job – both to retain the client for future legal services and to prevent a professional liability claim from being filed. It is unlikely a new associate is even listed as an authorized signer on the law firm trust account, much less as the only one listed. This means that needed client funds in the trust account are going to be accessible. Your client information in the digital practice management solution used by the firm can be accessed. There should be no lost files or lost information.

In larger law firms, the law firm management team and the law office legal administrator typically take care of such business continuity planning without most lawyers being individually involved.

Scenario 2: Now, let’s examine the other end of the spectrum. A hypothetical solo lawyer works with no other lawyers and has a habit of not keeping office staff longer than a year. The lawyer is unmarried and has no will. Much of the lawyer’s practice is in a practice area that few in the lawyer’s community handle. But the lawyer has just settled two rather sizeable personal injury matters on a contingency fee basis, and the clients are already asking when they will receive disbursement of their funds from the lawyer’s trust account. The lawyer used paper-based client files exclusively. There is likely some useful information on the lawyer’s computer about billing, but no one knows the password.

This sounds a bit like a law school exam hypothetical. But we all can see how this will become a complicated situation. No obvious lawyer is available to take over ongoing matters mid-case. It will be hard to access the trust account funds without a court order or, in appropriate cases, intervention by the OBA General Counsel. Filing an intestate probate and getting a personal representative appointed will take time, especially if the lawyer has children. It gets more complicated if the children are located out of state at unknown addresses.

ACCESS TO THE TRUST ACCOUNT

The next few paragraphs are taken directly from the OBA Planning Ahead Guide:

As mentioned above, when arranging to have someone take over or wind down your financial affairs, you should also consider whether you want someone to have access to your trust account. If you do not make arrangements to allow someone access to the trust account, your clients’ money will remain in the trust account until a court orders access. For example, if you become physically, mentally, or emotionally unable to conduct your law practice and no access arrangements were made, your clients’ money will most likely remain in your trust account until either a probate is opened and a personal representative is appointed or the OBA’s General Counsel petitions the Court to appoint lawyers to notify clients and take any immediate action necessary to protect them. Both of these approaches are far less desirable than making plans yourself. (Emphasis added) In many instances, the client needs the money he or she has on deposit in the lawyer’s trust account to hire a new lawyer, and a delay puts the client in a difficult position. This is likely to prompt ethics complaints, Client Security Fund claims, malpractice complaints, or other civil suits.

On the other hand, as emphasized above, allowing access to your trust account is a serious matter. You must give careful consideration to whom you give access and under what circumstances. If someone has access to your trust account and that person misappropriates money, your clients will suffer damages. In addition, you or your estate may be held responsible.

There are no easy solutions to this problem, and there is no way to know absolutely whether you are making the right choice. There are many important decisions to make. Each person must look at the options available to him or her, weigh the relative risks, and make the best choices he or she can.

Adding an Assisting Attorney or Authorized Signer to your operating or lawyer trust account is permitted regardless of the form of entity you use for practicing law.

This is a challenging analysis.

The Assisting Attorney

Equally important to making proper trust accounting arrangements is designating an assisting attorney. This refers to the lawyer you have made arrangements with to close your practice or to maintain it temporarily while you recover from a disabling medical condition. It is important that the assisting attorney agrees to assume these duties and you designate what is allowed.

We have heard of situations where two solo practitioners in the same community each agree to serve as assisting attorney for the other. That can work very well, but it may require a brief role of a third attorney who removes any files from the appointing attorney’s office where the assisting attorney was opposing counsel or otherwise has a conflict and sees to their disposition.

The OBA Planning Guide

The Planning Ahead Guide: Attorney Transition Planning in the Event of Death or Incapacity is available at no cost to all OBA members. You can log in to your MyOKBar page and click the link for the guide from the list of links. Do not be intimated by the size of this publication, as a substantial part of the guide contains forms for you to modify and use in your planning. We encourage you to download the guide and start implementing it to benefit both your clients, those who will administer your estate and perhaps yourself in the event of a temporary disability. 

Mr. Calloway is the OBA Management Assistance Program director. Need a quick answer to a tech problem or help solving a management dilemma? Contact him at 405-416-7008, 800-522-8060 or jimc@okbar.org. It’s a free member benefit.

Originally published in the Oklahoma Bar Journal — November, 2024 — Vol. 95, No. 9