Things to Consider When Closing Your Law Practice
There are many reasons that lawyers may choose to close their practices: a career change, disability, moving out of state, or retirement are the more common ones that we hear. You may be asking yourself, “How do I go about doing this?” Shuttering your practice can be daunting and seem overwhelming; therefore, it needs to be approached thoughtfully. It’s important to make sure that loose ends are tied up and all of your ducks are in a row. The following are some basic guidelines and organizational tips to make the transition of closing your practice as seamless as possible.
Considering when you will close your doors should be your first step. Will it be three months from now, six months, or a year or more? This timeline needs to be reasonable for everyone concerned – you, your office staff, and your clients. When thinking about your timeline, you will need to determine what matters can be finalized before closing, and you will need to allow enough time to wrap them up. If there are ongoing matters that cannot be concluded, discuss how to proceed with your client. Remember that during this transition time, you should not be taking on any new matters that cannot be finished by the closing date that you have established.
Notifying your clients is the next piece of business that you must address. You will want to do this in writing and, in some cases, face to face, as well. Your notification letter should be sent to current clients and, oftentimes, past clients. In your letter, you will need to address topics such as relevant time frames, instructions for obtaining a copy of their file, and assisting and/or advising them regarding finding a new attorney. Allowing clients plenty of time to make this transition with you should help ease any concerns that they might have. Don’t forget that this transition affects them, too, and needs to be made as comfortably as possible.
The list of housekeeping and banking matters that must be resolved will accumulate quickly. It’s important to stay organized and keep a checklist of tasks to be completed. All of the following are things that need to happen throughout the transition period. This is, by no means, a thorough list and will vary from lawyer to lawyer depending on your circumstances.
- Notify the Oklahoma Bar Association and other professional associations of your status
- Appropriately handle the clients’ trust account funds
- Prepare and submit final billings to your clients
- Terminate the location’s lease
- Cancel utilities, e.g., electric, phone, water, gas
(The OBA has a more comprehensive checklist.)
Finally, when all of your business is wrapped up, OAMIC stands ready to assist you in obtaining an Extended Reporting Endorsement (ERE), should you choose to put one in place. This endorsement is commonly referred to as “tail coverage.” The endorsement extends the reporting time that someone would have to make a claim against your past acts. Remember that your policy is issued on a claims-made basis, and, therefore, an ERE will give you the peace of mind that you should have as you are closing your doors.