CBA Ethics Committee Releases Opinion on Succession Planning

Two people sit at a desk with papers and a law book.
The Colorado Bar Association's Ethics Committee on Jan. 18 released Opinion 147 concerning ethical considerations in succession planning. / Photo by Mikhail Nilov on Pexels.

The Colorado Bar Association’s Ethics Committee on Jan. 18 released Opinion 147 concerning ethical considerations in succession planning. 

The committee notes succession planning often takes incapacity, disability or untimely death into consideration but also stresses it’s part of a lawyer’s due diligence under Colorado Rule of Professional Conduct 1.3. 

A Special Note on Solos

According to the opinion, Comment 5 to Rule 1.3 “emphasizes the need for solo practitioners to have a succession plan.” Clients of solo practitioners won’t be able to turn to a lawyer in the same firm to continue their cases, the committee noted, also pointing out the American Bar Association’s guidance from 30 years ago is still relevant. 

While the ABA’s 1992 opinion was mostly focused on the untimely death of a solo, the committee emphasized the risks associated with disability and incapacity are of equal concern to both solos and attorneys at firms of all sizes.

But the more complex aspect for solo succession planning, as pointed out by the committee, is “another lawyer is unlikely to have the institutional knowledge about the solo practitioner’s procedures with respect to managing cases and other administrative aspects of the practice to efficiently assist clients, including facilitating the important task of returning client property.”

Risky Business

The committee lists some risks associated with a lack of succession planning including an assisting attorney not being able to access case files if they’re stored on the previous attorney’s password-protected devices or being unable to locate the correct devices that contain client information. An assisting attorney may also have to answer calls from clients about their cases or the status of advance payments, and without diligent bookkeeping by the planning attorney, this task may be impossible or intensive and time-consuming. 

If the attorney worked at a firm, a lack of succession planning may quickly consume time and resources and impair assisting attorneys from working on their own client matters, the committee noted. 

Additionally, the committee pointed out assisting attorneys may be unaware of upcoming deadlines, court appearances or trials, and if attorneys miss those deadlines, the harm falls largely on the clients. 

The opinion noted another risk of not developing a succession plan is the likelihood of wind-down planning or redistribution of professional property falling on the shoulders of a loved one of the attorney. 

Who’s Got the File?

The opinion covers various considerations planning and assisting attorneys should keep in mind. One consideration for solos is creating a formal succession plan that prioritizes protecting client files and funds and maintaining regular communication with clients. Firms may already have a more standardized succession or transition plan for attorneys, but the advice of the committee may also be applicable to attorneys at firms or general counsel. 

For client files, the committee stresses the importance of following Rule 1.6(b), which goes over when disclosing client information may be allowed and how to prevent unauthorized disclosure or access to client information. Rule 1.9(c)(2) covers the protection of former client information and should also be considered during succession planning, according to the opinion. 

“Planning attorneys should be vigilant not to intermingle documents related to different client matters in the same file, whether that file is a tangible, physical file, or one kept electronically,” the committee noted. The opinion goes on to warn planning attorneys about file security and avoiding storage on shared devices. 

Rule 1.16A(b) provides instructions about file retention, noting solos need to keep client files for 10 years following termination of representation if the client wasn’t informed about the attorney’s intent to destroy the file. Even after the decade is up, the lawyer can’t destroy the file unless they’re unaware of any “pending or threatened legal proceedings” and they haven’t agreed to keep the file past that time. The rule also lists the circumstances under which the lawyer isn’t required to keep the file for the 10 years. 

Colorado Rule of Civil Procedure 121 Section 1-26(7) lists a retention rule for keeping copies of documents filed electronically to state courts for two years, according to the opinion. Planning attorneys are also advised to review the requirements for the retention of fee agreements listed in Rule 1.15D(a). 

Who’s Doing What?

Assisting attorneys need to distribute client files. How they do so will depend on what the client chooses. The information could be returned to the client, given to the client’s new counsel or destroyed, according to the opinion. 

The committee explains the best way to figure this out is to keep client contact information with their files or in a list. 

The assisting attorney will also need to determine what actions need to be taken when and for which matters. Planning attorneys can maintain a calendar, docket or case files to aid in this effort. The committee also notes planning attorneys should also include information in their plans about where to find passwords, locate files and list off any digital calendars they were using to track case deadlines. 

If file transfers may incur costs, planning attorneys may want to note how assisting attorneys can access funds to pay for additional costs of file management. 

Maintaining Confidentiality

The committee stressed confidentiality is of the utmost importance, overshadowing client file distribution in a succession plan. “To accomplish this, and as an additional best practice, a planning attorney might consider informing clients at the outset of the representation of the name of their assisting attorney so that clients understand who might contact them if an unexpected event leads to the planning attorney’s incapacity,” the opinion notes. 

The opinion also notes if a client doesn’t want to receive their files or hasn’t responded to communications about the file, assisting attorneys should destroy the file securely to maintain confidentiality of the information. 

Other Considerations

The committee also covered potential conflicts of interest noted in Rule 1.7 and Rule 1.9(c), the protection of client property, communication requirements, how to facilitate the continuation of client representation and trust account reconciliation, fund distribution and record-keeping. 

The opinion also covers how to draft an agreement to close practice, and if that agreement or a formal succession plan doesn’t exist, how to wind down a lawyer’s practice using Rule of Civil Procedure 244 to get a court-appointed inventory counsel. 

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