By Margeaux Green
So it’s time to close your law practice. Whether it’s because of a change in career, family matters, or a hard-earned retirement, you’re ready to shutter the windows and close the door to your business. Now what? This article lays out the basic components of closing your practice: financial considerations, giving notice, insurance issues, closing accounts, what to do with open cases, retaining documents, and handling directory and online listings.
1. CREATE A TIMELINE
It is important to establish and follow a timeline. To create your timeline, ask yourself two preliminary questions:
- When do you want to close your practice?
- How long will it take to close your practice?
Give yourself six months to a year to fully wind down your practice. Set a future closing date considering your active cases and the steps involved to close your office doors.
2. LAW PRACTICE CLOSURE TO-DO LIST
Collect your accounts receivable. Before you announce your office closure to clients, be sure to collect outstanding fees. Be diligent in your collection efforts. Upon learning of your plans to close your office, some clients may use this as an opportunity to avoid paying their bills.
Reconcile and close your trust account. Ensure that you are continuing to properly reconcile your trust account in compliance with Rule of Professional Conduct (RPC) 1.15B.11 https://www.courts.wa.gov/court_rules/pdf/RPC/GA_RPC_01_15B_00.pdf. Refund or transfer any unused funds from fee deposits per RPC 1.15A.22 www.courts.wa.gov/court_rules/pdf/RPC/GA_RPC_01_15A_00.pdf. Treat funds you are holding for clients or third parties that you cannot locate as unclaimed property and file a report with the Department of Revenue.33 https://ucp.dor.wa.gov/app/submit-a-report. Additionally, be sure to comply with RPC 1.15B regarding preserving trust account records. Contact your bank about fees associated with closing your trust account and be sure your account has sufficient funds to cover the fee. (Do not use client funds to cover this fee—you are responsible for this charge.) See the WSBA’s Managing Client Trust Accounts Booklet44 www.wsba.org/docs/default-source/licensing/iolta/managing-client-trust-accounts-booklet(00455604).pdf?sfvrsn=29a13cf1_10. for additional trust account information.
Address outstanding liabilities. Pay balances and then cancel firm credit cards. Meet with lenders regarding outstanding loans.
Announce your plan internally. Provide your staff with ample notice of your intention to close your practice. Walk through your office closure plan with them and delegate tasks where you can. As an incentive for staff to stay and help you to close, consider offering bonuses. Also consider helping staff find new employment by reaching out to your network to ease the transition.
Announce your plan externally and stop accepting new
cases. Inform your clients, past and present, that you are closing your law practice. Per RPC 1.16(d), to the extent reasonably practicable, a departing lawyer shall protect a client’s interests such as giving reasonable notice to the client, surrendering papers and property, and refunding any fee that has not been earned. Document the communications you make of your office closure, including information about when and how you told your clients. Inform clients of the closing date, the status of their case with you, and how to transfer their files to themselves or a new lawyer. Address any client funds you hold in trust. Notify opposing counsel, courts, and other tribunals of your office closure as well. For additional information regarding notice, see Advisory Opinion 201801 Lawyers Moving from Firm-to-Firm in Private Practice.55 https://ao.wsba.org/print.aspx?ID=1688.
The WSBA offers forms to help notify clients and track file transfers:66 Available at www.wsba.org/for-legal-professionals/member-support/practice-management/transition-your-practice#close.
- Client Authorization of File Transfer Form
- Letter Advising that Lawyer is Closing Office
- Client Acknowledgment of File
- File Closure Tracking Spreadsheet
- Timelines for File
Tail policy. Contact your malpractice carrier and inform them of your office closure. Consider adding a tail policy. A tail policy adds coverage to your malpractice insurance, providing protection for claims reported after your insurance policy ends.
Health insurance. Make a health insurance plan for after you close your office. An insurance broker can help to guide this process. Consider enrolling in a plan from the Health Insurance Marketplace.77 www.healthcare.gov/quick-guide/getting-marketplace-health-insurance/.
Manage and contact (and maybe close) digital subscriptions and databases. Software services often limit the amount of time a past subscriber has access to their data post cancellation. Be sure to export all information and data you intend to keep before you lose access to it. Check your terms of service for software data policy. The document retention section below describes how to track your files.
Forward mail, email, and calls. Arrange your mail forwarding with USPS.88 https://moversguide.usps.com. Also forward calls and emails. Consider including an automatic response in your emails, stating the date of your office closure and your contact information thereafter.
Close utilities and manage lease/rental agreements. End your phone and internet services when your practice closes. Finalize arrangements with your landlord and with vendors such as office equipment rentals.
Dispose of furniture, fixtures, art, electronics, and library. Consider selling, donating, offering items on a WSBA list serve, using a furniture disposal service, or taking the items to the dump.
Cancel other services, like process service and remote receptionists.
Finish what you can. In addition to notifying your current clients of the office closure, plan and manage the client work you can finish. For client matters that cannot be resolved prior to the firm closure date, address continuances, upcoming hearing dates, and attorney referrals to continue the client’s legal work. For forms to notify your clients and transfer files, see the “Notice” section above.
Contact counsel for opposing parties and third parties involved in current matters. Other parties and entities may include social workers, financial advisors, experts, and guardians ad litem.
Manage client files according to your document retention policy. Remind clients of your file retention and destruction policy. Review the WSBA’s Law Firm Guide to Document Retention99 www.wsba.org/for-legal-professionals/member-support/practice-management/guides/document-retention-guide. for your professional obligations for document retention, the scope of the client file and property of the client, suggested best practices for document retention, and practice forms.
Directory and Online Listings
Address existing advertisements, legal directory listings,1010 www.courts.wa.gov/court_rules/pdf/APR/GA_APR_13_00_00.pdf. Google listing, website, and social media. Update your information on legal directory listings. Make it clear on your website the date of your office closure and update your free Google business listing to say that your office is closed.
3. RELATED ISSUE
This article does not cover the related issue of closing another attorney’s law office (see the WSBA’s “Checklist For Closing Another Attorney’s Office”).1111 www.wsba.org/docs/default-source/resources-services/practice-management-(lomap)/checklist-for-closing-another-attorneys-office.pdf?sfvrsn=fdb139f1_0.
For specific questions about professional responsibility and ethics issues related to closing a law office, contact the WSBA Ethics Line1212 www.wsba.org/Resources-and-Services/Ethics. at 1-800-945-9722.
4. ADDITIONAL RESOURCES
For personalized advice, WSBA members can schedule a free confidential consultation with a practice management advisor.1313 www.wsba.org/pma. The Practice Management Assistance page on the WSBA website1414 www.wsba.org/for-legal-professionals/member-support/practice-management. provides guidance on starting, managing, and transitioning your practice. You can also download and explore other practice guides and accompanying forms on disaster planning and recovery,
cybersecurity, hanging your own shingle, and document retention.
. . .
Titles Available From the WSBA Lending Library
The WSBA Lending Library is a free service to WSBA members offering the short-term loan of books on topics related to practice management, wellness, and career development. Titles relevant to closing a law practice include the following:
- Lawyers at Midlife: Laying the Groundwork for the Road Ahead. By Michael P. Long, et al, DecisionBooks, 2009.
- The Lawyer’s Retirement Planning Guide. By Susan Berson, 2nd ed., American Bar Association, 2015.
- Passing the Torch Without Getting Burned. By Peter A. Giuliani, ABA, Law Practice Management Section, 2014.
- Lawyer Interrupted. By Amy Impellizzeri, American Bar Association, Solo, Small Firm and General Practice Division, 2016.
- The Lawyer’s Guide to Succession Planning. By John W. Olmstead, American Bar Association, 2016.
- Second Acts for Solo and Small Firm Lawyers. By Jennifer J. Rose, American Bar Association, Senior Lawyers Division, 2020.
- Dangerous Opportunity: Making Change Work. By Chris Musselwhite Ed.D., and Randell Jones, M.B.A., Xlibris Corp, 2004.
- You’ve Earned It, Don’t Lose It: Mistakes You Can’t Afford to Make When You Retire. By Suze Orman, and Linda Mead, William Morrow, 1997.