Ethics/Practice Management
Seven Habits of Highly Effective Estate Planners
By Alan F. Rothschild, Jr.

Estate planning lawyers face many challenges today that mandate a renewed focus on ways to provide more efficient and client-focused estate planning services. Encroachments into this area of practice have been made by the following developments:

• The increased performance of "traditional" estate planning services by nonlawyers;

• An ever-changing legal environment, including the phased-in repeal of the federal estate tax;

• More cost-conscious consumers of legal services; and

• Increased practice overhead, particularly associate salaries and staff labor costs.

This article discusses seven techniques that distinguish successful trust and estate practices in today's business environment and contains self-audit questions that will guide you in incorporating these procedures into your practice.

Define your practice. The range of prospective estate planning clients is increasingly broad. The following questions can help determine what segment of the estate planning field is most appropriate for your practice:

• What do you and your law practice offer to prospective clients?

• Who is your competition for estate planning services?

• How can you distinguish your practice from this competition?

• Which areas of the estate planning field do you find personally rewarding?

• What are the estate planning needs of the individuals that you interact with in the community?

• What do you perceive to be the growth areas in the field, particularly in your community?

• Which areas of the field are, or have the potential to be, the most financially rewarding?

Expand your base. Your existing client base is both a direct source of additional business and an indirect source for new business opportunities through referrals. Because current clients are so valuable to your practice, periodically review the following questions:

• What are the primary reasons you lose clients?

• What have you done or can you do to address this?

• Would you be better off without some clients?

• What are the most important actions you can take to keep current clients?

• How can you ethically encourage referrals from existing clients?

In addition to client retention, marketing to existing clients, referral sources, and prospective clients is an important component of a successful estate planning practice. Marketing, however, is effective only if it attracts work you desire to do and can professionally and profitably handle. When designing a marketing strategy, consider the following:

• What marketing techniques fit your community, client base, and personal style?

• What marketing would be effective in your practice environment?

• Have past marketing efforts attracted the "right" clients?

• How can you market without tarnishing the professional aspects of your practice?

Communicate effectively. The efficient practice of law requires a written engagement letter. By defining the relationship and fee arrangements upfront, you will greatly limit questions and misunderstandings later. Most estate planners also use a closing or disengagement letter to define the attorney's role and responsibilities after the completion of the initial estate planning project.

Estate planners must efficiently gather accurate client information. Using an estate planning worksheet that is mailed to the client before the initial conference or completed during the initial conference streamlines this process.

Regular communications with clients during an engagement maintain a strong relationship and avoid unnecessary telephone calls seeking status updates. Thorough communication with estate planning clients should include the following:

• Keeping promised deadlines for the delivery of documents;

• Confirming important information with clients in writing;

• Copying clients on letters, legal memos, and court filings related to their matters; and

• Providing summaries of draft documents and illustrations when delivering and discussing proposed plans.

Because one of the most reliable sources of new estate planning business is your existing client base, a periodic newsletter or update on estate planning developments is a professional and efficient way to maintain and expand these relationships. Points to consider in planning communications with clients include:

• Do you send new or prospective clients sufficient information to ensure the best use of your time and staff?

• Do you use third-party resources such as state bar materials to explain the estate planning, probate, or administration process?

• Have you considered maintaining a lending library of estate planning and administration books and articles for clients?

• Can any of this information be delivered to your clients via the Internet?

Billing strategies. Estate planners must develop billing systems and techniques that take into account the value of the services delivered to the client and the resources involved in delivering these services. For many estate planners, reliance on time as the primary measure of value is outdated and not reflective of practice realities. Lawyers should consider the effort involved in all aspects of estate planning to determine whether billing by the hour is appropriate and what alternatives exist.

Regular billing is another important office system. The initial client conference or engagement letter should discuss upfront retainers and periodic billing procedures. Bills should clearly explain the services performed and value delivered, so that the client can understand and pay the bill. Questions to consider when reviewing your billing system are:

• How do you bill for routine estate planning documents?

• Does the traditional "by the hour" method accurately reflect the value to the client?

• What alternatives to hourly billing could you offer?

• When are alternatives appropriate?

• Does your engagement letter properly describe your actual billing method?

• How frequently do you bill?

• Do you have systems in place to monitor past-due accounts?

Ethics issues. You must anticipate and address ethics issues in estate planning engagements before they arise. Areas that frequently raise ethical concerns include client capacity, joint spousal engagements, multi-generational engagements, client identification in estate administration, continuation or termination of client relationships, and the lawyer's competency to undertake the project.

Common questions to consider about ethics in estate planning include the following:

• What policies and procedures has your firm adopted to identify and address possible ethics issues effectively?

• How can an engagement letter help clarify ethics issues?

• Should you close the relationship after completing the estate planning project? If so, how? If not, what ongoing obligations do state rules place on you as a result of this relationship?

Effective staffing. Using staff effectively should be a major practice management focus. When reviewing your staffing needs, cover the following points:

• Would it be most cost effective to hire a new law school graduate, an experienced practitioner, or a paraprofessional?

• Are staff properly trained?

• Do you and your colleagues delegate effectively?

• Is every employee's potential as a revenue source being maximized?

• Is everyone aware of ethical issues that arise when using nonlawyers?

Using technology. Today's technology helps lawyers practice more efficiently. Estate planners in particular can use specific programs to do the following tasks:

• Create customized documents in less time and with fewer errors,

• Locate documents quickly,

• Easily research cases and topics,

• Monitor client contacts and calendars, and

• Stay current on legal developments.

The most concrete products of an estate planning practice are the documents produced for particular clients. Because documents often vary only slightly for different clients, good management should include document assembly software, which can replace tedious cutting and pasting. In addition, a top-notch document management and retrieval program can organize all your documents in an electronic filing system, without the drawbacks of paper storage.

Traditional legal book publishers now offer an array of case, Code, and subject-based CD-ROM and Internet products--available with or without hard copies. Remote access makes these tools available anywhere, anytime. Remember, however, that it is almost as easy to have too much technology as too little-- make sure the technology you select fits your office and practice methods.

Alan F. Rothschild, Jr., practices law with Hatcher, Stubbs, Land, Hollis & Rothschild in Columbus, Georgia.

Copyright © 2002 by American Bar Association; Alan F. Rothschild

Copr. (C) 2004 West, a Thomson business. No claim to orig. U.S. govt. works. This article is reprinted with permission from West, a primary sponsor of the General Practice, Solo and Small Firm Division.