If you are a sole practitioner or a member of a small firm, have you ever asked yourself, “What happens to my practice if I get hit by a bus?” As unpleasant as the thought may be, it is a good question to ask because it is impossible to predict life’s ups and downs. Nonetheless, having a plan for what to do if calamity strikes is definitely a good idea. Even if I am confident that nothing of that variety will ever happen to me, I thought I would jot down some ideas anyway.
One of the first things that comes to mind is my firm’s money. Oops! I mean that one of the very first things that should come to mind is my client’s money — that is, money that I am holding in my COLTAF account for my clients. If I become disabled or die, how will the money held in my COLTAF account get back to my clients? One simple solution is to have another signatory besides myself on the COLTAF account. Many of us don’t realize that the Colorado Rules of Professional Conduct, specifically Colo. RPC 1.15C — Use of Trust Accounts, permits this. It says that only a lawyer admitted to practice law in Colorado “or a person supervised by such lawyer” shall be an authorized signatory on a trust account. See Colo. RPC 1.15C(b).
One solo practitioner friend I discussed this topic with said she thought of having her husband as a co-signer, but she wasn’t sure she could trust him. She speculated what he might do if they ever stopped getting along. There is a lesson to be learned here: Be careful whom you choose to serve as an additional signatory. Make certain that it is someone whom you can really trust. Also, make sure to supervise any signatory who is not a lawyer and, whether you have a lawyer or a non-lawyer as a signatory, stay informed at all times about what is happening with the funds in your COLTAF account. Colo. RPC 1.15C(c) requires that trust account records be reconciled at least quarterly. Don’t delegate and forget about it.
You can also have another signatory beside yourself on your operating account(s). That way, any immediate bills can get paid, and payments from clients on fees already earned can be deposited.
Variations on this theme allow more control over when a second signatory has access to your accounts and reduce the risk of someone misappropriating the funds. You can authorize another lawyer to become a signatory on your COLTAF account upon the occurrence of your death or incapacitation, or you can give a limited power of attorney to a lawyer or non-lawyer to conduct transactions in your accounts in the event you die or become incapacitated. The Colorado Office of Attorney Regulation Counsel (OARC) has prepared a handbook titled, Planning Ahead: A Guide to Protecting Your Clients’ Interests in the Event of Your Disability or Death (One of Which is Inevitable), which provides advice on these options and furnishes forms that you can use so you don’t have to re-invent the wheel. This can be found at coloradosupremecourt.com/PDF/Regulation/Closing_Practice.PDF.
Whether you decide to have a second signatory on your COLTAF and/or operating accounts now or appoint someone to serve as signatory or attorney-in-fact upon your death or incapacitation, make sure to complete whatever forms your bank requires so that a smooth transition will occur when the time comes.
What if the bus hits the day before I have a scheduled hearing or the week before I have a scheduled trial? How will my client know what happened to me or the court know why I am absent? What if I have a deadline to file a brief or submit an estate plan to a client when I’m suddenly taken out of commission? What if a statute of limitations is about to run on a client’s claim?
The first step is to have information available so that someone — a staff member, a spouse or a lawyer friend — can look to see what is coming up. For example, an up-to-date calendar that shows upcoming events and deadlines, including court hearings, appointments, filing deadlines and statutes of limitations deadlines, would be helpful to someone trying to deal with your sudden incapacitation or demise.
Of course, think about how someone would be able to access that information. If you keep your calendar electronically, how would someone get to it? Create a short instruction sheet, perhaps a one-pager, with an upbeat title like, What To Do If I Die. Identify in that instruction sheet who, by prior agreement with that person, should be contacted and where and how information can quickly be located about impending deadlines and appointments. For the person who has agreed to be the first point of contact in the event of your death or incapacitation, provide a separate information sheet that lists the passwords that person will need to access your calendar. Your designated contact person would then be able to take some steps to deal with the most urgent action items, whether that involves simply notifying someone of your situation or arranging for another lawyer to step in on a matter.
For a long time, criminal defense lawyers have agreed to provide coverage for each other in basic court appearances when a colleague has a calendar conflict, gets sick or has another emergency. For example, an attorney might cover for another attorney at an arraignment for purposes of the client entering a not guilty plea and setting a future pre-trial conference date, or appearing at a scheduled pre-trial conference for purposes of re-setting it to a future date after the DA’s office provides discovery. Colo. RPC 1.2(c) allows a lawyer to limit the scope of the representation of a client if the limitation is reasonable under the circumstances and the client gives informed consent, meaning that the lawyer has given the client adequate information about the material risks of and reasonably available alternatives to the proposed course of conduct. See Colo. RPC 1.0 Terminology, Section 1.0(e).
If you die while a court case is pending, does your client immediately become pro se until he or she retains a new lawyer? If so, C.R.C.P. 121, §1-1(5) would permit another lawyer, with the client’s permission, to make a limited appearance in a specific court proceeding by filing a Notice of Limited Appearance. Pursuant to the rule, at the conclusion of that proceeding, the lawyer’s appearance terminates without the necessity of leave of court. This procedure would allow a colleague to explain your unfortunate circumstances to the court and prevent any prejudice to the client until arrangements could be made for another lawyer to take on the representation of the client. Remember that this rule is a state court rule and thus applies to matters in Colorado state courts — not to federal court actions.
In the long run, someone will need to review your various client matters to determine what needs to be done on each. Someone will need to take over the representation of your various clients; and someone, if you are a sole practitioner who has died or become permanently incapacitated, will need to close up your shop or sell your practice. These designees may or may not be the same person.
One suggested step is to have a triage lawyer who agrees to review your client matters in the event of your death or incapacitation for the sole purpose of determining what needs to be done with each matter and when. The triage lawyer would act as legal counsel to you rather than as legal counsel to the clients. As such, confidentiality of the information contained in the clients’ files would be maintained. The triage lawyer would look first at the near term to make sure nothing falls through the cracks and arrange for the client to obtain substitute counsel for any immediate needs.
The next step to anticipate is who will agree to take over your various client matters if your clients agree and don’t have another lawyer they want to retain in your absence. This lawyer would have to take the steps required with any new representation he or she takes on. These steps include checking for conflicts on each matter before taking on the representation and confirming in writing the basis or rate of the attorney fees that will be charged, and, in the instance of a contingent-fee case, following the requirements for contingent fees set forth in Chapter 23.3 of the Colorado Rules of Civil Procedure. If this lawyer has a conflict on a particular matter, or some other reason that precludes him or her from taking on the representation of a particular client, this lawyer, or the triage lawyer, would need to refer the client to other counsel who might be able to take on the representation before any prejudice results to the client, such as, for example, the expiration of a statute of limitations or the failure to meet a court deadline.
Ultimately, if you are a sole practitioner who has died or become permanently incapacitated, a decision will have to be made about selling your practice pursuant to Colo. RPC 1.17 or closing it. For example, a lawyer who practices in the area of trusts and estates might have clients who require future or ongoing estate planning or estate administration needs, or a business lawyer might have clients who require continual advice on employment matters, contracts, regulatory compliance and the like. In these situations, selling the practice might make more sense than simply arranging for another attorney or attorneys to take on various matters. Decisions on whether to sell your practice or close it would be up to the personal representative of your estate; however, the personal representative can authorize the triage attorney, the additional signatory on your accounts and the attorney who has agreed to take on your clients to take the necessary steps to carry out the personal representative’s decision.
Perhaps it is intuitively obvious that you should put your plan in writing. This includes written agreements between you and the lawyers who agree to act as signatories on your accounts, the triage lawyer and the lawyer taking on the representation of your clients. Again, the handbook published by the OARC provides valuable advice on these issues, as well as simple, straightforward forms for your use.
If you die or become incapacitated without a plan, one of the Colorado Rules of Procedure Regarding Attorney Discipline and Disability provides for the Protective Appointment of Counsel. Colo. RPC 251.32(h) states that when a lawyer has died or been transferred to disability inactive status “and no partner, executor, or other responsible party capable of conducting the lawyer’s affairs is known to exist, the chief judge of any judicial district in which the attorney maintained his office, upon the request of regulation counsel, shall appoint legal counsel to inventory the files of the lawyer in question and to take any steps necessary to protect the interests of the attorney and the attorney’s clients.” This procedure, however, could not be invoked until after Regulation Counsel has become aware of the lawyer’s death or incapacity, which might not be until a client has already suffered some prejudice to his or her rights. It’s possible that Regulation Counsel could first become aware of the lawyer’s death or incapacity through a complaint from a client. Thus, it would be preferable to have the client’s interests protected through your plan that is set to kick in upon your death or incapacitation rather then relying on the Office of Attorney Regulation Counsel to seek the appointment of protective counsel.
As you can see, you can make your plan as simple or as complicated and multilayered as you like. However, don’t let your desire to make it perfect get in the way of starting it. Taking even just one step now will ease the burden on your staff, spouse, colleague or friend on the day when the bus does arrive. D
Gerald D. Pratt has his own law firm in Lone Tree, where his practice includes the representation of lawyers in professional negligence litigation and disciplinary cases, insurance defense, and criminal defense. He has served on and chaired the CBA Ethics Committee and the CBA Lawyers’ Professional Liability Committee. He can be reached at email@example.com.
Patrick Pratt has been the legal assistant and business manager at the Law Office of Gerald D. Pratt, P.C. since August 2015. He previously worked in public policy for two area chambers of commerce and served on Centennial’s Home Rule Charter Commission in 2007 and 2008. He can be reached at firstname.lastname@example.org.