One of the biggest roadblocks to succession planning is not adopting a reasonable timeline. I like reverse planning: Start with the end goal and work your way back. I guarantee that you will be surprised at how many interim steps are necessary.
Let’s take George as an example. George has been practicing law since 1980 − 36 years. It seems so long. He always thought he would practice 40 years and then retire. Can he retire in 2020? Absolutely. The PLF has a practice aid checklist available for retiring from your law practice. Retiring involves many details, and creating a succession plan with a successor attorney requires even more considerations.
Let’s put together a sample succession plan for George:
1. July 1, 2017: George selects a reasonable date for when he wants to shut the lights off and lock the door on the way out.
2. August 1, 2017: George meets with a consultant and CPA to discuss the value and best structure for the sale of his law practice.
3. August 30, 2018: Planning meeting to finalize the offering price and terms and marketing budget for national, regional, and local advertising, and nondisclosure and noncompete agreement drafted.
4. September 1, 2018: George places blind box ads in ABA Journal, OSB Bulletin, and respective state Bar magazines for Washington, California, and Idaho for their October issues.
5. October 1, 2018: George places blind box ads in Wall Street Journal and Oregon Daily Journal of Commerce.
6. October 30, 2018: George reviews all responses to advertising and selects and vets top three potential purchasers.
7. November 1, 2018: George sends nondisclosure noncompete agreements to top prospects and schedules conferences upon receipt of signed agreements.
8. March 1, 2019: George and the top potential buyer meet and do office walk through and discuss terms and succession plan subject to satisfactory conflicts search.
9. July 1, 2019: George and the buyer finalize the terms of their agreement.
10. September 1, 2019: George finalizes the client letter with his successor/purchasing attorney.
11. September 15: 2019: George prepares the client letter and client mailing list.
12. October 1, 2019: George sends out a letter to his clients regarding the intended sale of his law practice to his successor attorney per the requirements of ORPC 1.17(b).
(b) The selling lawyer, or the selling lawyer's legal representative, in the case of a deceased or disabled lawyer, shall provide written notice of the proposed sale to each current client whose legal work is subject to transfer, by certified mail, return receipt requested, to the client's last known address. The notice shall include the following information:
(1) that a sale is proposed;
(2) the identity of the purchasing lawyer or law firm, including the office address(es), and a brief description of the size and nature of the purchasing lawyer's or law firm's practice;
(3) that the client may object to the transfer of its legal work, may take possession of any client files and property, and may retain counsel other than the purchasing lawyer or law firm;
(4) that the client's legal work will be transferred to the purchasing lawyer or law firm, who will then take over the representation and act on the client's behalf, if the client does not object to the transfer within forty-five (45) days after the date the notice was mailed; and
(5) whether the selling lawyer will withdraw from the representation not less than forty-five (45) days after the date the notice was mailed, whether or not the client consents to the transfer of its legal work.
13. November 30, 2019: Deadline for clients to pick up their client file or have the file transferred to successor/purchasing attorney.
14. December 31, 2019: Sale executed. Last day of business as George’s Law Firm. George finalizes closing invoices and issues refunds or transfers checks for trust account.
15. January 1, 2020: Start of Successor Firm. George becomes of counsel to Successor Firm.
16. February 1, 2020: George closes general bank account and trust account.
17. December 31, 2020: George’s retirement date.
It looks like George has a lot of work to do before he can retire, but with a timeline guiding him, his plan to retire brings him to his target date with everything handled. How about you? What does your succession plan look like? A good start would be to review the PLF’s handbook, Planning Ahead: a Guide to Protecting Your Clients’ Interests in the Event of Your Disability or Death, along with our practice aids on Retiring from Law Practice and Selling a Law Practice. Click on the links or visit www.osbplf.org, under Practice Management.