This article was originally published in the January/February 2022 issue of San Diego Lawyer Magazine.
By Edward McIntyre
2022 is now upon us, with its “resolutions” — some of which did not survive January. If, however, you are a sole practitioner, or even in a partnership with another lawyer or two, you might consider — or even make a resolution regarding — what happens to your law practice when you’re no longer here.
Not a cheery thought. Sorry. But the statistics for living forever are not in our favor. Not even for young (or younger) lawyers.
Assume you’re a sole practitioner, maybe with a part-time secretary or paralegal. None of your family — not your spouse, nor your now-grown children — are lawyers. They know little, likely nothing, about the inner workings of your practice — just the war stories, at times exaggerated, that we all tell.
You have a client trust account, an operating account, and perhaps others. You are the signatory on all those accounts. You maintain them meticulously. But if you suddenly pass away — heart attack, stroke, fatal accident — what burdens will fall on your family to wrap up your practice? How will they know who your clients are? How will they get client files returned or into the hands of successor lawyers? What do they do about pending deadlines, or even know about them? How do they determine what unearned funds in your client trust account are due to which client? How do they figure out what client matters should be billed, and to which client? After all, your estate is entitled to those funds.
“But,” you think, “I have an estate plan; a family trust with appropriate successor trustees. That takes care of everything if I’m no longer here.”
Maybe, maybe not.
Some banks in San Diego will not allow a non-lawyer to access a deceased lawyer’s client trust account, or even that lawyer’s operating or other accounts, even if the non-lawyer is the estate administrator and successor trustee of the deceased lawyer’s estate — at least, not without court orders.
Assume you and a partner practice together. For convenience, you are signatory on the client trust account; your partner, on the operating account. The accounts may even be in separate banking institutions — frequently a sensible risk mitigation strategy to avoid inadvertent commingling. If one of you suddenly passes away, however, the bank may not let the non-signatory lawyer access the account — again, at least not without a court order.
Yes, there is a process for the Superior Court to assume jurisdiction over a deceased lawyer’s practice. It’s in Business and Professions Code section 6180, et. seq. But it requires another lawyer, on behalf of the deceased lawyer’s practice, to prepare and file a verified petition with supporting papers and notice hearings; to step into and essentially take over the practice. In some instances, the State Bar’s Office of
14 SAN DIEGO LAWYER | January/February 2022
Chief Trial Counsel — the State Bar’s arm of discipline — has stepped in and done it. But its nearest office is in Los Angeles and, as certain news outlets have emphasized, it has other things on its plate at the moment.
Why should a lawyer’s family, in addition to the grief and many other details related to the lawyer’s passing, also have to take care of winding up the lawyer’s practice, including getting a lawyer, or the State Bar, to go to court? Think about another solution.
If you have a trusted lawyer friend, consider asking her or him to be an additional signatory on your client trust and other accounts. Yes, that requires trust — but you still have the check book in your desk drawer. You might also offer a reciprocal service.
And, should not the two-lawyer firm have each partner listed as a signatory on every account? Additionally, could they rethink whether they need a “dual signature” requirement on client trust account checks? Clearly a worthwhile risk mitigation failsafe — but is it necessary?
Assume you and your lawyer friend, or partner, agree to the requisite additional signatories on client trust and other bank accounts. After making sure the bank will recognize what you propose, is there more you might consider? In addition to those meticulous records you keep, might you not get together from time to time to update each other on pending matters, clients, files, and bills (outstanding and to come)?
When any of us should suddenly pass away, think of the comfort to our families if a lawyer friend can say: “I share your grief. But know that I’ll step in and wind up your beloved’s law practice with as little involvement from you as I can.”
A resolution to make and keep?
Edward McIntyre (edmcintyre@ethicsguru.law) is a professional responsibility lawyer.