Must Read Monday Succession Planning

Must Read Monday Succession Planning

You’ve built a thriving practice through hard work and dedication, but have you ever considered what happens when it’s time to retire or in the event of an unexpected emergency?

What is succession planning?

Succession planning is essential to every lawyer’s practice, proactively protecting clients and colleagues in the event of disability or death.

Succession planning may not be at the top of your to-do list, but it’s crucial to ensuring the continued success of your practice and the protection of your clients. Take the time to develop a plan that reflects your values and goals. With the right tools and resources, you can leave your practice with confidence and peace of mind.

When should I consider succession planning?

Succession planning is imperative to all law firms, not just those close to retirement.

How do I go about succession planning?

Start planning early: Succession planning takes time, so it’s important to start thinking about it as soon as possible.

Identify a successor: Choose someone who shares your values and who you trust to take over your practice when you retire, become incapacitated or pass away.

Create a contingency plan: In case of unforeseen circumstances, have a contingency plan in place that is easily accessible to others and outlines what will happen to your practice if you become unable to work.

Seek professional advice: Consult with an attorney, financial planner or other professional who has experience in succession planning.

What key elements should be in my succession plan?

The ABA recommended items for an effective succession plan completed in conformity with applicable rules include, but are not limited to:

• Written instructions concerning how and where client information is stored, including bank and other account details (e.g., operating and trust account information);
• Information concerning disposition of closed client files, information about law office equipment leases or other contracts;
• Information regarding payment of current liabilities;
• Instructions to gain access to computer and voicemail passwords; and
• Information detailing how the successor will be compensated.

Succession planning resources:

Watch our CLE seminar Passing the Torch which demonstrates how a succession plan that follows the rules of the State Bar can benefit a law firm.

Alternatively, consider engaging with your preferred bar association, the California Lawyers Association, and / or a professional consultant, all of whom have tools and resources for succession planning.

Remember: Succession planning is a proactive step that may help prevent business interruptions in times of sudden illness or death. Protect yourself, your firm and your clients by considering a proper succession plan. For other general questions, our Member Benefits department is available at mbinfo@lawyersmutual.com