When It s Time to Say Goodbye: Selling a Law Practice / Closing a Law Practice

Transcription

1 When It s Time to Say Goodbye: Selling a Law Practice / Closing a Law Practice I. Acknowledgments. Thomas Nolan, Esq. Virginia Wills, Trusts & Estates PLC Charlottesville, Virginia [email protected] April I want to acknowledge up front that I borrowed freely (and with permission) from a small number of sources. These include (i) Leslie A.T. Haley, Assistant Ethics Counsel with the Virginia State Bar, and an outline she prepared for the VSB entitled Planning Ahead: Protecting Your Client s Interests in the Event of Your Disability or Death, and (ii) Barbara Fishleder, Director of Personal and Practice Management Assistance with the Oregon State Bar Professional Liability Fund, and that organization s handbook entitled Planning Ahead: A Guide to Protecting Your Clients Interests in the Event of Your Disability or Death. I have also drawn upon several fine articles that appear in The Lawyer s Guide to Buying, Selling, Merging, and Closing a Law Practice (2008), edited by Butler and Paszkiet and published by the ABA. I also want to thank Jay G. Fooberg for granting permission to reprint his superb Checklist for Closing or Preparing for the Closing of a Law Practice. His website reports that his book - How To Start and Build a Law Practice (5th edition) - is the most frequently stolen book from law libraries in the United States and has been the ABA s best seller every year since If that s not a great recommendation, I don t know what is. II. Ending a Career as a Practicing Lawyer. A. Everyone Retires. Every practicing attorney will some day cease the practice of law. The graveyards are full of indispensable men. A day will come when each one of us will craft our last trust, bill our last hour, and join the ranks of former practicing attorneys. It does not have to be a sad occasion. For some of us, it might rank up there with one of the very best days of our lives. B. Why We Cease Practicing. Voluntary retirement and involuntary retirement - death, disability, disbarment, etc.

2 C. The Most Important Ethics Concern. Clients and client files are at the heart of every lawyer s law practice. Our profession is very concerned that we dispose of our law practice, particularly client files, in ways that will not cause harm to our clients. There are essentially two ways to retire your practice. 1. Sell your law practice. 2. Close down your law practice. D. Big Firm v. Sole Practitioners. For obvious reasons, the retirement of a partner in a large law firm does not trigger great concerns about protecting clients and client confidences. But a sole practitioner (or a partner in a small firm) who has built up a large client base and who wishes to retire has significant ethical responsibilities to his active and inactive clients. As of June 2006, according to the ABA: 1. There were 1,116,967 lawyers licensed to practice in the United States % were sole practitioners % were in a firm of 2 to 5 attorneys. E. Relevant Ethics Rules. 1. A lawyer may sell a law practice, partially or in its entirety, including good will, if the conditions set forth in Rule 1.17 of the Virginia Rules of Professional Conduct are satisfied. See Attachment No. 1 for the text of Virginia Rule 1.17 and related comments. 2. A lawyer s duty of competent representation includes arranging to safeguard a clients interests in the event of the lawyer s death, disability, impairment, or incapacity. ABA Formal Op See Attachment No. 2 for text of this opinion. 3. A lawyer should plan for client protection in the event of the lawyer s death, disability, impairment, or incapacity. The plan should be in writing and should designate a responsible attorney capable of making, and who has agreed to make, arrangements for the protection of client interests in the event of the lawyer s death, impairment, or incapacity. Comment [5] to Rule 1.3 of the Virginia Rules of Professional Conduct. 4. To the extent a lawyer reasonably believes necessary, the lawyer may reveal information necessary to protect a client s interests in the event of the representing lawyer s death, disability, incapacity or incompetence. Rule 1.6(b)(3) of the Virginia Rules of Professional Conduct. -2-

3 III. Selling a Law Practice. A. Traditional View. Less than a generation ago, sole practitioners were prohibited by state bar ethical guidelines from selling the law practices that they had built up, and were limited to selling the office equipment, fixtures, and other tangible personal property. B. EC 4-6 of the Code of Professional Responsibility. The old Code of Professional Responsibility contained an explicit prohibition. The obligation of a lawyer to preserve the confidences and secrets of his client continues after the termination of his employment. Thus a lawyer should not attempt to sell a law practice as a going business because, among other reasons, to do so would involve the disclosure of confidences and secrets. A lawyer should also provide for the protection of the confidences and secrets of his client following the termination of the practice of the lawyer, whether termination is due to death, disability, or retirement. For example, a lawyer might provide for the personal papers of the client to be returned to him and for the papers of the lawyer to be delivered to another lawyer or to be destroyed. In determining the method of disposition, the instructions and wishes of the client should be a dominant consideration. C. ABA Model Rule In 1989, the California Supreme Court amended that state s ethics rules to permit the sale of a law practice, becoming the first state to do so. Following California s lead, the ABA propelled the change nationwide with its enactment of Rule 1.17 of the Model Rules of Professional Conduct. Now, in virtually every jurisdiction, sole practitioners and small firms may sell their law practices as going-concerns. D. Adoption of Virginia Rule In adopting Virginia s version of Rule 1.17, the Virginia State Bar s Standing Committee on Legal Ethics (referred to in the Virginia Rules of Professional Conduct as the Committee ) was persuaded to overturn Ethical Consideration 4-6 by several arguments: 1. Sole practitioners and their clients are often unreasonably discriminated against when the attorney s practice is terminated. When lawyers who are members of firms retire, the transition for the client is usually smooth because another attorney of the firm normally takes over the matter. Such a transition is usually more difficult for the clients of a sole practitioner, who must employ another attorney or firm. 2. Some attorneys leaving practice, firm members and sole practitioners alike, indirectly sell their practices, including its good will, by utilizing various arrangements. For example, firm members sometimes receive payments from their firm pursuant to retirement agreements that have the effect of rewarding the lawyer for the value of his/her practice. Sole practitioners contemplating leaving the practice of law may sell their tangible assets at an inflated price or bring in a partner prior to retirement, then allow the partner to take over the -3-

4 practice pursuant to a compensation agreement. Such arrangements do not always involve significant client participation or consent. 3. An attorney s practice has value that is recognized in the law. Under Virginia divorce law, for example, a professional s practice, including its good will, may be subject to equitable distribution. (Russell v. Russell, 11 Va. App. 411, 399 S.E.2d 166 (1990)). Therefore, under the Virginia Code, an attorney in a divorce proceeding may be required to compensate his/her spouse for the value of the practice, yet be forbidden to sell it. The Committee recommended, after considering all of these factors, that adopting a carefully crafted rule allowing such sales without resort to these alternate methods would be preferable and would assure maximum protection of clients. See Committee Commentary to Rule E. Elements of Virginia s Rule A lawyer or a law firm may sell or purchase a law practice, partially or in its entirety, including good will, if the following conditions are satisfied: 1. The seller ceases to engage in the private practice of law in the geographic area in which the practice has been conducted, except the lawyer may practice law while on staff of a public agency or legal services entity which provides legal services to the poor, or as inhouse counsel to a business. Rule 1.17(a). 2. Actual written notice is given by the seller to each of the seller s clients (as defined by the terms of the proposed sale) regarding: (a) (b) (c) (d) (e) the proposed sale and the identity of the purchaser. Rule 1.17(b)(1). any proposed change in the terms of the future representation including the fee arrangement. Rule 1.17(b)(2). the client s right to consent or to refuse to consent to the transfer of the client s matter, and that said right must be exercised within ninety (90) days of receipt of the notice. Rule 1.17(b)(3). the client s right to retain other counsel and/or take possession of the file. Rule 1.17(b)(4) the fact that the client s refusal to consent to the transfer of the client s matter will be presumed if the client does not take any action or does not otherwise consent within ninety (90) days of receipt of the notice. Rule 1.17(b)(5). See item 5 below. -4-

5 3. If a client involved in a pending matter cannot be given notice, the representation of that client may be transferred to the purchaser only upon entry of an order so authorizing by a court having jurisdiction. The seller may disclose to the court in camera information relating to the representation only to the extent necessary to obtain an order authorizing the transfer of a file. Rule 1.17(c). 1.17(d). 4. The fees charged clients shall not be increased by reason of the sale. Rule 5. Note this important distinction between the Virginia rule and the ABA s Model Rule. In the Model Rule, client consent to the transfer of the file is presumed if the client does not object within ninety days of receipt of the notice. In the Virginia Rule, the client s refusal to consent to the transfer of the client s matter will be presumed if the client does not take any action or does not otherwise consent within ninety (90) days of receipt of the notice. 6. Admission to or retirement from a law partnership or professional association, retirement plans and similar arrangements, and a sale of tangible assets of a law practice, do not constitute a sale or purchase governed by Rule Rule 1.17 comment [14]. F. Who May Sell a Law Practice? 1. Retiring Sole practitioners. 2. Law firms from which one, some or all members are retiring or otherwise abandoning the practice. 3. Personal representatives of deceased, disabled, or missing lawyers. This includes estate executors, administrators, court-appointed guardians, committees, and conservators. Rule 1.17 applies to the sale of a law practice by representatives of a deceased, disabled or disappeared lawyer. Thus, the seller may be represented by a nonlawyer representative not subject to the Rules. Since, however, no lawyer may participate in a sale of a law practice which does not conform to the requirements of this Rule, the representatives of the seller as well as the purchasing lawyer shall see to it that they are met. Rule 1.17 Comment [13]. G. Who May Purchase a Law Practice? A lawyer or a law firm. H. Protecting Client Secrets and Confidences. A prospective selling lawyer may provide a prospective purchaser with as much information about clients and their files as will disclose the existence of conflicts of interest, or their absence, that is not protected as client confidences or secrets under applicable ethical code provisions. In Virginia, providing the purchaser access to client-specific information relating to the representation and to the file, -5-

6 however, requires client consent. Before such information can be disclosed by the seller to the purchaser, the seller must follow the procedures set forth in Rule 1.17, i.e., give the client written notice of the contemplated sale, etc. Furthermore, all the elements of client autonomy, including the client s absolute right to discharge a lawyer and transfer the representation to another, survive the sale of the practice. Rule 1.17 Comments [7] and [9]. I. Tips on Selling a Law Practice. The literature on the sale of a law practice stress the same common themes. 1. Develop a Timeline for Selling. The selling process is usually undertaken in stages. A seller should develop a written timeline to guide the process, particularly these key elements: (a) (b) (c) (d) arranging the appraisal and valuation. preparing a sales prospectus and advertising that the practice is for sale. finding qualified buyers. negotiating the final purchase price and payment terms, and then implementing the transfer of the practice to the buyer. 2. Hire outside expertise. Even the smallest and most personal practices might be saleable for the right price and under the right terms. How do you determine appropriate price and terms? (a) (b) (c) Contract with an outside expert to conduct a proper valuation of the practice. Retain a professional consultant or broker for the actual selling process. Look for someone with experience in a practice purchase or sale in your geographic area or practice specialty. 3. Create a How-to-Run-my-Law-Firm manual. The manual should include everything you can think of: how to set up a file, when to destroy a file, how to close out a case, how to set fees, how to market to get clients, etc. 4. The literature suggests that niche practices are much more saleable than a typical general practice. The good will connected with a niche practice can be very valuable. One seller of a niche practice wrote I spent so much time and money building my name in the community that when I sold the practice, one of the valuable things I sold was the use of my name. John Ventura, Selling a Niche Practice, from The Lawyer s Guide to Buying, Selling, Merging, and Closing a Law Practice (2008), edited by Butler and Paszkiet. -6-

7 5. Be sure you are serious about getting out. If you sell your practice and decide at a later time you want to start back in practice, this would probably be a violation of both contract law and Rule A number of state bars require that after selling a practice, you either resign from the bar or adopt inactive status. Accordingly, your intent in selling should be to retire from the practice of law and move on to the next chapter of your life. It is possible to sell your practice and move to another city or a different firm to start a new one absent a covenant not-to-compete. There is also this out. Neither does the seller s return to private practice after the sale as a result of an unanticipated change in circumstances result in a violation. For example, a lawyer who has sold the practice to accept an appointment to judicial office does not violate the requirement that the sale be attendant to cessation of practice if the lawyer later resumes private practice upon leaving the office. Virginia Rule 1.17, comment [10]. J. Approaches to Valuation of a Law Practice. I am taking a calculated risk that anyone reading this outline who wants to know how to price his or her law practice will look at the literature and perhaps obtain outside expert advice. I would refer you to James Cotterman, Valuation of a Law Practice, from The Lawyer s Guide to Buying, Selling, Merging, and Closing a Law Practice (2008), edited by Butler and Paszkiet. K. What Exactly Are You Selling or Buying? I particularly liked this answer, again from James Cotterman s Valuation of a Law Practice. One cannot value a law practice without answering what s being transferred, although many people try. In the sale of a law practice, the seller is providing the accumulated efforts of establishing trust-based relationships with clients, building relationships with contacts and referral sources, creating a market presence professionally and among desired clients, and developing the infrastructure to deliver legal services. The buyer is looking for an ongoing stream of income that is represented primarily by the client base and referral sources of the seller. The buyer is hopeful that he or she can assume the trust position with clients and market presence of the seller. In addition, there are hard (often called tangible) assets and intangibles, such as an established business operation, that make up the practice s infrastructure. IV. Closing Your Own Practice. A. A Checklist for Closing Your Practice. See Attachment No. 3 for a reprint of a Checklist for Closing or Preparing for the Closing of a Law Practice by Jay G. Foonberg, a prolific writer on law practice management issues. It is exhaustive and excellent and would be very valuable to any lawyer contemplating the closure of his or her law practice. -7-

8 B. Ethical Concerns in Closing Your Practice. Closing a law practice requires most of the same steps one would take in closing any business. However, attorneys must deal with ethical conditions and requirements that are superimposed on the process. Most of these ethical concerns are intended to ensure that a client s legal interests are not compromised by the closing of the practice and to protect the confidentiality of client information. Here s a short checklist of some of those checklist items that have ethics implications. 1. Plan way ahead. It will probably take you longer than you think to completely extricate yourself from the tar baby you have been building for half your life. 2. Stop taking new clients and new cases. documents. 3. Return client property, such as unearned fees and original estate planning 3. Separate active and inactive files. Dispose of inactive ones. Regarding destruction of client files, see Article V of this outline. 4. Write to clients with active files, advising them that you are unable to continue representing them and that they need to retain new counsel. Your letter should inform them about time limitations and time frames important to their cases. The letter should explain how and where they can pick up copies of their files and should give a time deadline for doing this. 5. All clients should either pick up their files (and sign a receipt acknowledging that they received them) or sign an authorization for you to release the files to their new attorneys. If a client is picking up the file, original documents should be returned to the client and copies should be kept in your file. 6. All clients should be told where their closed files will be stored and whom they should contact in order to retrieve them. If a closed file is to be stored by another attorney, get the client s permission to allow the attorney to store the file for you and provide the client with the attorney s name, address, and phone number. Regarding destruction of client files see Article V. C. Malpractice Tail Coverage. For the solo practitioner who decides to retire, the choice seems fairly simple and staightforward. Simply put, the solo practitioner contemplating retirement should seek a policy which provides free tail coverage upon retirement or at least permits the purchase of such coverage. Either unlimited or a long term tail provision should be sought... At the very minimum, three years prior to contemplated retirement is not too soon to begin thinking and planning... Edward J. Hutchins, Why Attorneys Need Tail Insurance, Maryland Bar Journal, July/August

9 Article V. Destruction of Client Files. A. File Retention and Destruction Policy. Does your firm have one? If not, a good place to begin might be by reading Preservation of Files: To Destroy or Not to Destroy, by Jay G. Foonberg, reprinted as Chapter 11 in The Lawyer s Guide to Buying, Selling, Merging, and Closing a Law Practice (2008), edited by Butler and Paszkiet. B. LEO 1305 (1989). This opinion declares that a Virginia lawyer does not have a general duty to preserve indefinitely all closed or retired files. See Attachment No. 4 for its complete text. The opinion offers the following procedures as cautionary guidelines, but failure to follow the procedures would not result in any ethical impropriety. 1. The lawyer should screen all closed files in order to ascertain whether they contain original documents or other property of the client, in which case the client should be notified of the existence of those materials and given the opportunity to claim them. 2. Having culled those materials from the closed files, the lawyer should use care not to destroy or discard materials or information that the lawyer knows or should know may still be necessary or useful in the client's matter for which the applicable statutory limitations period has not expired or which may not be readily available to the client through another source. Similarly, the lawyer should be cognizant of the need to preserve materials which relate to the nature and value of his legal services in the event of any action taken by the client against the lawyer. 3. Having screened the files for the removal of any materials as indicated, the lawyer may at the appropriate time dispose of the remaining files in such a manner as to best protect the confidentiality of the contents. C. ABA Informal Opinion 1384 (1977). We cannot say that there is a specific time during which a lawyer must preserve all files and beyond which he is free to destroy all files. Good common sense should provide answers to most questions that arise. See Attachment No. 5 for its complete text. The opinion offers the following guidance. 1. Unless the client consents, a lawyer should not destroy or discard items that clearly or probably belong to the client. Such items include those furnished to the lawyer by or in behalf of the client, the return of which could reasonably be expected by the client, and original documents (especially when not filed or recorded in the public records). 2. A lawyer should use care not to destroy or discard information that the lawyer knows or should know may still be necessary or useful in the assertion or defense of the client s position in a matter for which the applicable statutory limitations period has not expired. -9-

10 3. A lawyer should use care not to destroy or discard information that the client may need, has not previously been given to the client, and is not otherwise readily available to the client, and which the client may reasonably expect will be preserved by the lawyer. 4. In determining the length of time for retention of disposition of a file, a lawyer should exercise discretion. The nature and contents of some files may indicate a need for longer retention than do the nature and contents of other files, based upon their obvious relevance and materiality to matters that can be expected to arise. 5. A lawyer should take special care to preserve, indefinitely, accurate and complete records of the lawyer s receipt and disbursement of trust funds. contents. 6. In disposing of a file, a lawyer should protect the confidentiality of the 7. A lawyer should not destroy or dispose of a file without screening it in order to determine that consideration has been given to the matters discussed above. 8. A lawyer should preserve, perhaps for an extended time, an index or identification of the files that the lawyer has destroyed or disposed of. D. Keeping Clients Original Wills. A no-no in all the literature, but many of us do it anyway. See Why In The World Did We Ever Keep Original Wills (Attachment No. 6). At least appreciate it will slow down the closing of your practice - perhaps enormously so - one day. Article VI. Protecting Clients Interests in the Event of Attorney s Disability or Death. A. The Ethical Obligation to Prepare for Your Own Death or Disability. 1. A lawyer s duty of competent representation includes arranging to safeguard a clients interests in the event of the lawyer s death, disability, impairment, or incapacity. ABA Formal Op A lawyer should plan for client protection in the event of the lawyer s death, disability, impairment, or incapacity. The plan should be in writing and should designate a responsible attorney capable of making, and who has agreed to make, arrangements for the protection of client interests in the event of the lawyer s death, impairment, or incapacity. Comment [5] to Rule 1.3 of the Virginia Rules of Professional Conduct. -10-

11 3. To the extent a lawyer reasonably believes necessary, the lawyer may reveal information necessary to protect a client s interests in the event of the representing lawyer s death, disability, incapacity or incompetence. Rule 1.6(b)(3) of the Virginia Rules of Professional Conduct. B. Agreement with Another Attorney to Close Law Practice. 1. Entering into an Agreement to Close Law Practice is an increasingly common response to Comment [5] of Rule 1.3, particularly for sole practitioners. In the agreement, the Planning Attorney (the PA ) recognizing the importance of protecting the interests of his clients in the event that he is unable to practice law by reason of his death, disability, incapacity or other inability to act, and wishing to plan for the orderly closing of his law practice if he is unable to practice law for the above stated reasons, enters into an agreement with the Assisting Attorney (the AA ) empowering the AA to act as the PA s agent to take all necessary actions to close the PA s practice. 2. For a widely used form of such an agreement, see Attachment No. 7, promulgated by the Oregon State Bar Professional Liability Fund. For a shorter form of the agreement, see Attachment No The first step in the planning process is for the PA to find another attorney willing to serve as the AA. Although the designation of another lawyer to assume responsibility for a deceased lawyer's client files would seem to raise issues of client confidentiality, Rule 1.6 now authorizes such disclosure under the circumstances. 4. The arrangements should include a signed consent form authorizing the AA to contact the PA s clients for instructions on transferring their files, authorization to obtain extensions of time in litigation matters when needed, and authorization to provide all relevant people with notice of closure of the PA s law practice. 5. If the AA represents the PA as his attorney, he may be prohibited from representing the PA s clients on some, or possibly all, matters. Under this arrangement, the AA would owe his or her fiduciary obligations to the PA. For example, the AA could inform the PA s clients of the PA s legal malpractice or ethical violations only if the PA consented. Here is a sample clause I did not find in the forms but is probably in the PA s best interests. -11-

12 While fulfilling the terms of this Agreement, the Assisting Attorney is the attorney for the Planning Attorney. Unless otherwise required by the Virginia Rules of Professional Conduct, the Assisting Attorney does not have permission (i) to inform the Virginia State Bar of errors or potential errors of the Planning Attorney, (ii) to inform the Planning Attorney s clients of any errors or potential errors, or (iii) to inform the Planning Attorney s clients of any ethics violations committed by the Planning Attorney. 6. If the AA is not the PA s attorney, he may have an ethical obligation to inform the PA s clients of the PA s errors. Here s a clause that I would suspect most AA s would prefer: While fulfilling the terms of this Agreement, the Assisting Attorney is not the attorney for the Planning Attorney. The Assisting Attorney has permission to inform the Virginia State Bar of errors or potential errors of the Planning Attorney. The Assisting Attorney has permission to inform the Planning Attorney s clients of any errors or potential errors and instruct them to obtain independent legal advice. The Assisting Attorney also has permission to inform the Planning Attorney s clients of any ethics violations committed by the Planning Attorney. 7. In addition to arranging for an AA, the PA may also want to arrange for an Authorized Signer on the PA s trust account. It may be best to choose someone other than the AA to act as the Authorized Signer. This provides for checks and balances, since two people will have access to your records and information. It also avoids the potential for any conflicting fiduciary duties that may arise if the trust account does not balance. C. Should You Allow Others to Access Your Client s Trust Account? When an attorney is arranging to have someone take over or wind down his law practice, he should also consider whether to grant someone access to the attorney s trust account. 1. If you do not make arrangements to allow someone access to the trust account, your clients' money will remain in the trust account until a court orders access. The AA would be unable to transfer money from the PA s trust account to pay appropriate fees, to provide the PA s clients with settlement checks, and to refund unearned fees. This is likely to cause delay and put a client at a disadvantage, since settlement funds or unearned fees held in trust are often needed in order to hire a new lawyer. 2. If yes, keep in mind allowing access to your trust account is a serious matter. The attorney must give careful consideration to whom you give access and under what circumstances. If someone has access to your trust account and that person misappropriates money, you will be held responsible. -12-

13 3. There are alternatives to consider, varying from general access to access contingent upon the occurrence of an event (disability, incapacity or some other reason you are unable to conduct your business affairs). For instance, the attorney might select someone (such as spouse or other family member) to hold the original power of attorney until the holder makes the determination that the specific event has occurred. If you are going to have the authorization for access to your trust account contingent upon an event or for a limited duration, the terms should be specified in a written agreement, and you should consult with your bank manager for confirmation that the bank will honor the agreement. D. Additional Planning Steps Attorneys Should Enact. Lawyers can take a number of steps while still practicing to make the process of closing down a law practice smooth and inexpensive. 1. Be sure to have an office procedures manual that explains how to produce a list of client names and addresses for open files. 2. Keep all deadlines and follow-up dates on a calendaring system. 3. Keeping time and billing records up-to-date. 4. Familiarizing your Assisting Attorney and/or Authorized Signer with your office systems. 5. Renew your written agreement with the Assisting Attorney and/or Authorized Signer each year. 6. Include a clause like this in your own will. With respect to my law practice, my personal representative is authorized and directed to carry out the terms of the Agreement to Close Law Practice I have made with XXX as Assisting Attorney and YYY as Authorized Signer on December 21, If these Agreements are not in effect, my personal representative is authorized to enter into similar agreement with other attorneys that my personal representative, in his or her sole discretion, may determine to be necessary or desirable to protect the interests of my clients and dispose of my practice. Or if you have not signed such agreements, -13-

14 My personal representative is authorized and directed to take such steps as he or she deems necessary or desirable, in my personal representative s sole discretion, to protect the interests of the clients of my law practice and to wind down or dispose of that practice, including, but not limited to, selling of the practice, collecting accounts receivable, paying expenses relating to the practice, providing trust accounting and returning unearned retainers to my clients, employing an attorney or attorneys to review my files, completing unfinished work, notifying my clients of my death and assisting them in finding other attorneys, and providing long-term storage of and access to my closed files. 7. Maintaining Sufficient Funds. For many sole practitioners, the legal practice may be the only asset subject to probate. Other property will likely pass outside probate directly to a surviving joint tenant. This means that unless you keep enough cash in your law practice bank account, there may not be adequate funds to retain the attorney or continue to pay staff and other expenses during this transition period. Consider life insurance and disability insurance to fill this need. -14-

15 Index to Attachments 1. Rule 1.17 of the Virginia Rules of Professional Conduct. 2. ABA Formal Op Jay G. Foonberg, Checklist for Closing or Preparing for the Closing of a Law Practice. 5. Virginia LEO ABA Informal Opinion Why In The World Did We Ever Keep Original Wills, reprinted from In Brief, Oct Model Agreement to Close Law Practice, from the Oregon State Bar Professional Liability Fund. 8. Model Consent to Close Office, from the Oregon State Bar Professional Liability Fund.