Succession planning a must for lawyers

Lawyers need to practice what they preach and implement a succession plan that kicks in when they are no longer willing or able to continue in the profession.  

Sole and small-firm practitioners have no problem telling their clients to get an estate plan in place to ensure their family and friends are properly provided for after they are gone.  

Yet I wonder how many of them have their own succession plans – in my own experience, surprisingly few have considered what would happen to their client files and records is they were unexpectedly unable to continue practising because of an accident, incapacity or even death. 

I understand that succession planning will be difficult for many lawyers – particularly practitioners who are older or located in more remote areas of the province – but it is absolutely necessary in the interest of the public. 

When a lawyer ceases the provision of legal services without the appropriate arrangements in place to wind up their business, their clients may not be the only ones left in the lurch as court appearances are missed, deals fail to close and trust funds remain out of reach; the lawyer’s own family and friends could also be dragged into legal proceedings if the licensee’s estate ends up being on the hook for the firm’s liabilities.  

Right now, it’s the Law Society of Ontario’s Trustee Services department that picks up the pieces in cases like this, stepping in to protect client files, trust funds, and other documents.  

However, the office has struggled under the weight of its growing workload for the last decade, forcing its headcount and budget to double over the same period. Trustee Services now cost the LSO around $2 million annually.  

And the LSO is expecting the burden on the department to grow even further in the coming years, thanks to the 240-per-cent rise in the number of sole practitioner members aged over 65 since 2005.  

All that has prompted the LSO to recommend a mandatory succession planning requirement for licensees, following the lead of law societies in Nova Scotia, Saskatchewan and the Northwest Territories, the requirement is already in place.  

A report outlining the LSO’s proposed succession planning criteria, enforcement, supports and member resources was released earlier this year. Lawyers, other stakeholders and the general public have until Nov. 30 to make their feelings known to the LSO about the proposals, before its professional regulation committee moves forward to the next stage of implementing the new rules, with an goal of early 2024 to have the requirement in force.  

According to the report, lawyers’ plans would need to appoint a successor licensee to take on their practice, disclose the location of all files and client property, administrative and accounting passwords and trust account details. 

The proposed plan suggests sole practitioners consider enacting a “buddy system” between themselves to provide backup support and succession for each other’s professional businesses, but acknowledges some in remote locations may be unable to identify someone suitable. 

In those cases where a suitable successor can not be found, the LSO’s working group has recommended that a process be developed for Trustee Services to connect lawyers and facilitate succession arrangements between them, although it also suggests a fee should be charged for the service. 

Even if the fee is a nominal one, I’m not sure that it is justified, considering the dues that we already pay to the LSO and the exceptional overheads that lawyers incur to run sole practices, especially those in smaller communities that are already underserved by legal professionals.  

Perhaps a better way to offset the cost of Trustee Services would be the creation of a succession fund raised via a profession-wide levy, or the introduction of incentives to encourage licensees to make themselves available as potential successors for practitioners in remote locations. 

More creative solutions to succession planning could also be considered, such as the development of courses or accreditation for clerks, allowing them to play a more active role in the wind-up of a practice where no other lawyer in available to handle the transition. These key people are the backbones of many smaller legal practices, and it would be good to see their institutional knowledge put to use on a temporary basis when a lawyer is forced out of practice suddenly.  

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