Turning Out the Lights Without Leaving Clients in the Dark

Exit planning is a hot topic in North Carolina although we are certainly not the first state to tackle these issues.   Keith Kapp, President of the North Carolina State Bar, called for the Bar to re-examine and improve our approach to both the beginning and the end of law practice.  Despite this call to arms and recognition of a need for change in the legal profession, Warren Savage, a claims attorney with Lawyers Mutual, finds it surprising “how many lawyers avoid preparing for the inevitable end of their careers until after that end arrives at an unexpected time.”  He says, “While legal careers will almost certainly end because of a career change, retirement, health, or death, a surprising number of lawyers reach that end without having considered and prepared for the recurring issues common to winding down a law practice.”[1]  Therefore, exit planning appears to be both a big challenge for attorneys, as well as, an opportunity for improvement in the legal profession.

Exit strategies can encompass any one of a number of different scenarios:

(1)   Winding down and closing the doors of the practice;

(2)   Selling or merging the law practice; or

(3)   Internally transitioning the law practice to another attorney in the firm.

Each strategy comes with its own challenges, and it takes time and commitment to successfully implement.  Regardless of the road you choose, the key is to start early in developing your plan so your clients, your employees, and your family are protected.

Beginning in July and over the next few months, we will post a series of articles related to this issue.  Each subsequent article will tackle a specific aspect of exit planning and succession such as practical checklists for winding down a practice, the ethics of turning out the lights, the sale or merger of a law practice, and expecting the unexpected.  In the meantime, a great resource for attorneys interested in creating such a strategy is Turning out the Lights: Planning for Closing Your Law Practice, a publication of the North Carolina Bar Association Rich Harris Committee. The committee published the procedural guidebook to help lawyers plan for untimely events that might necessitate the closing of a law practice.