What makes shutting down a law firm distinct from closing down a different type of business operation? In “Checklist for Closing or Preparing for the Closing of a Law Practice, ” author Jay G. Foonberg explains the distinctions. “The major differences are the ethical conditions superimposed on the task, which makes the task difficult and sometimes impossible to accomplish,” he writes. “Most of the ethical conditions ... are designed either to protect the confidentiality of client information or to prevent other lawyers from offering to help the clients because of solicitation concerns.”
Because of these complexities, Foonberg warns that closing a firm requires preparation and organization. To this end, he provides a checklist to prepare for such action. However, because closings occur for different reasons—for example, the death of a lawyer or the decision to make a change in career—each firm's checklist may vary.
“One of the first considerations is who is going to be doing the work?” Obviously, if a sole practitioner passes, someone else will need to take charge. In that case, it could be the executor of the lawyer’s estate or the practitioner’s surviving spouse who handles the closing of the firm.
Some of the tasks may include:
Contacting current or most recent staff to get help with the closing
Opening mail to find bills that need to be paid, information on pending client matters, or income that may come in
Locating a possible assuming attorney who may have previously agreed to assume the practice
Asking local court clerks to run a search to find out if the practitioner is the lawyer of record on any open matters
Handling closed files requires particular attention. Closed files must be examined before destruction or return to clients. However, examining these files raises questions of possible violations of confidence. Since the rules of confidentiality vary from state to state, the lawyer handling the closing should research regulations
Additionally, examining the rules concerning time periods for file retention and file destruction that also vary from state to state and usually depend on various statutes of limitations is important.
Among the additional issues relating to closing a firm are considerations relating to insurance, taxes, computers, client lists and office files.
“The Checklist for Closing...” is part of “The Lawyer’s Guide to Buying, Selling, Merging and Closing a Law Practice.” It is part of the General Practice, Solo and Small Firm Division, and the Senior Lawyers Division book program. Foonberg is one of several contributors to the publication. You may learn more, or purchase the book at the ABA Web Store.
