DEALING WITH THE DEATH OF A SOLO PRACTITIONER

(Including Sale of a Law Practice)

©JAMES E. BRILLJames E. Brill, P.C.

3636 Westheimer

Houston, Texas 77027

713/626-7272

713/626-3606 (FAX)

JEBrill@aol.com

Dallas Bar Association

Solo & Small Firm Section

September 7, 2011

JAMES E. BRILL3636 Westheimer

Houston, Texas 77027

713/626-7272

FAX 713/626-3606

email JEBrill@AOL.COM

Jimmy Brill is a 1957 University of Texas Law School graduate and a solo practitioner from Houston whosepractice emphasizes probate, estate planning, and real estate.

He currently serves as principal author and project director of the Texas Probate System first published by theState Bar in 1972 and updated six times since then (most recently in 2010) and he previously chaired the StateBar CLE and PEER Committees.

In 2007 he was the recipient of the Dan Rugeley Price Memorial Award from the Texas Bar Foundation. In 2009the Foundation recognized him with its award as one of the five outstanding fifty-year lawyers in Texas.

In 2006, the Real Estate, Probate and Trust Law Section of the State Bar of Texas presented him with its LifetimeAchievement Award as the Distinguished Texas Probate and Trust Attorney. He also received the DistinguishedService Award for 2000 from the Estate Planning, Probate and Trust Law Section of the Houston Bar Association.

The State Bar honored him with its Presidents’ Award in 1978 as the outstanding lawyer in Texas, with the GeneCavin Award For Excellence In Continuing Legal Education in 1994, and with a Presidential Citation in 2005 forchairing the State Bar Task Force On Starting Practice.

The College of the State Bar recognized him with its 1999 Professionalism Award and in 2000 recognized hisarticle “Dealing With The Death Of A Solo Practitioner” as that year’s best article from a State Bar course.

He chaired the Law Practice Management Section of the American Bar Association in 1982 and in 2004 washonored by that Section with its Samuel S. Smith Award For Excellence In Law Practice Management. He wasinducted into the first class and elected as an initial trustee of the College of Law Practice Management and servedas its treasurer.

For two and one-half years, Brill wrote a monthly column for solo practitioners in the ABA Journal. He receivedThe General Practice, Solo and Small Firm Section of the American Bar Association Donald C. Rikli LifetimeAchievement Award in 2000.

Starting in 1994 he served as mentor to five women lawyers in their first year as solo practitioners and continuedthe group’s monthly meetings for an additional four years. This group became a model for the mentor programof the State Bar of Texas. In 2004, he started a second group of five.

He was an organizer and continues to lead monthly meetings of a Houston group of lawyers known as SolosSupporting Solos. This informal group has met each month since September 1994 and provides solos with anopportunity to meet fellow solo practitioners in an informal setting.

Brill is listed in Best Lawyers In America, Trusts and Estates and has been designated as a Texas “Super Lawyer”by Texas Monthly in each of its compilations.

Brill is a director of TLIE (Texas Lawyers Insurance Exchange), a company that writes malpractice coverage forTexas Lawyers and was a five year member of the State Bar of Texas committee that unsuccessfully proposedrevisions to rewriting the Texas Disciplinary Rules of Professional Conduct.

In 2010 he was one of five graduates of Lamar High School (Houston) to be recognized as a DistinguishedAlumnus.

DEALING WITH THE DEATH OF A SOLO PRACTITIONER

TABLE OF CONTENTS

I. OVERVIEW 1A. Scope of Article 1B. Potential Effect 1C. Potential Conflicts 1D. Civil Liability 1E. Primary Focus 1F. Delicate Balance 1G. The Existing Situation 1H. The Most Significant Issues

II. JUDICIAL PROCESS 1

III. THE BLACKEST OF THE BLACK LETTER RULES 1

IV. DISCIPLINARY PROCEDURE RULE 13.01 1A. Notification of Attorney’s Cessation of Practice 1B. Application of the Rule 2C. Selected Compliance Problems 2

V. JURISDICTION 3A. In General 3B. District Court Jurisdiction 3C. Statutory Courts Exercising Probate Jurisdiction 3

Vi. RESTRICTIONS ON ATTORNEY WHO WANTS TO “TAKE OVER THE FILE” 3A. In Person or Telephone Contact 3B. Prohibited Written Solicitations 3C. Filing Requirements For Public Advertisements And Written Solicitations 4D. Prohibited Employment 4E. An Exception 4

VII. DEALING WITH A CLIENT’S FILES AND OTHER PROPERTY 4A. Confidentiality 4B. Safekeeping Property 4C. Funds or Other Property Held For Clients 5D. Attorney’s Lien 5

VIII. HANDLING PROBATE OF DECEASED LAWYER’S ESTATE 6A. General Problems 6B. Standard Operating Procedure For Estates of All Lawyers 7C. When Client Desires Referral To Other Counsel 7D. When Client Has Obtained New Counsel 7

IX. GOOD OFFICE PROCEDURES THAT PROVIDE INCREASED PROTECTION FOR OUR CLIENTS 7A. Fee Agreements 7

i

B. Docket Control 7C. Separate Files 7D. Action Plan 7E. Current Filing 7F. Trust Account 7G. Time Records 7H. Billing And Receivables 7I. Keep Up With Workload 7J. File Review 7K. Closure Letter 7L. Client Lists 7M. Don’t Hold Original Documents 8N. Don’t Take On Non-Lawyer Responsibilities 8O. Create Referral List 8P. Back-Up Attorney 8

X. GOOD PROCEDURES THAT INCREASE PROTECTION FOR YOURSELF AND YOUR FAMILY 8A. Written Employment Agreements 9B. Concluding Representation 9

XI. SALE OF A LAW PRACTICE 9A. Overriding Concern 9B. The Major Issues: Confidentiality, Solicitation, and

Fee Sharing With Non-Lawyers 9C. Closing A Practice 11D. ABA Model Rule 1.17 11E. Arguments Against Permitting Sale of Law Practice 11F. Arguments In Favor of Permitting Sale of Law Practice 11G. Valuation And Payment 12H. Is Sale Permitted If Not Specifically Prohibited? 12

XII. THE FUTURE 12

APPENDIX A. Has The Parade Passed Us By 13APPENDIX B. Excerpts From Rules of Disciplinary Procedure 14APPENDIX C. Texas Penal Code §38.12 (Barratry) 16APPENDIX D. Excerpts From Texas Disciplinary Rules of Professional Conduct 17APPENDIX E. Interpretive Comment 23 from Advertising Review Committee 18APPENDIX F. Special Provisions For Attorney’s Will 20APPENDIX G. File Documentation, Retention and Destruction 24APPENDIX H. Selected Issues in Retaining Original Wills 29APPENDIX I. Classified Advertising 36APPENDIX J. Closing A Law Practice 39APPENDIX L. Acknowledgements 44

ii

DEALING WITH THE DEATH OF A SOLOPRACTITIONER

I. OVERVIEW

A. Scope of Article. This paper dealsexclusively with issues arising due to theunexpected and unplanned death of a solopractitioner. To some extent, many of the sameconsiderations could apply if the solo wasdisabled, disbarred, suspended, simplyabandoned the practice or retired.

B. Potential Effect. According to a 1995report of the American Bar Foundation, almost47% of all lawyers in private practice were solopractitioners. In April 2000, approximately 36%of Texas lawyers in private practice were solos. See “Has The Parade Passed Us By?”, atAppendix A..

C. Potential Conflicts. In the nature of lawpractice, conflicting responsibilities areencountered. Virtually all difficult ethicalproblems arise from apparent conflict between alawyer’s responsibilities to clients, to the legalsystem, and to the lawyer’s own interests. Section 7, Preamble to Texas Rules ofProfessional Conduct (Article 10, §9 of the StateBar Rules).

D. Civil Liability. These rules do notundertake to define standards of civil liability oflawyers for professional conduct. Section 14,Preamble to Texas Rules of ProfessionalConduct. Violation of a rule does not give rise toa private cause of action nor does it create anypresumption that a legal duty to a client hasbeen breached. Section 15, Preamble to TexasRules of Professional Conduct. But it can havea devastating effect in the eyes of a jury.

E. Primary Focus. The overridingconsideration should be to protect the client’sbest interests and to do so as promptly,efficiently, and inexpensively as reasonablypossible.

F. Delicate Balance. As will be seen, someof the Texas Disciplinary Rules of Professional

Conduct (“DR”) tend to complicate thingsinvolving clients, leave many open issues for thelawyer’s family, and raise serious potentialproblems for attorneys who are involved inwinding down the practice of a deceased solopractitioner.

G. The Existing Situation. Few lawyers haveactually handled the estates of solo practitionersand portions of this paper are based onanecdotal remarks from those few who could belocated and interviewed.

H. The Most Significant Issues. When it allsorts out there are four main questions.

1. What can a solo do to protect theinterests of the solo’s clients?

2. What can a solo do to enhance thevalue of the solo’s practice?

3. What guidance and instructionscan the solo provide to the solo’s executor andfamily?

4. What changes could or should bemade to remove the uncertainties inherent inexisting Rules?

II. JUDICIAL PROCESS

Rules 13.02 and 13.03 provide a judicialprocedure for taking over and closing a lawyer’spractice. Few lawyers and judges are familiarwith these procedures and for that reason alonemost lawyers shy away from the courthouse. Indoing so they find themselves in the briar patchof conflicting ethical and disciplinary rules.

III. THE BLACKEST OF THE BLACKLETTER RULES.

Misconduct. A lawyer shall not fail tocomply with section 13.01 of the Texas Rules ofDisciplinary Procedure relating to notification ofan attorney’s cessation of practice. DR 8.04 (a)(10).

IV. RULE 13.01 OF RULES OFDISCIPLINARY PROCEDURE.

A. Notice of Attorney’s Cessation of Practice,Rule 13.01 provides an alternative to requesting

1

a court to assume jurisdiction over the practice ofa lawyer. Rule 13.01 spells out certainnotification requirements when an attorney diesor ceases to practice and no other attorney, withclient consent, has agreed to assumeresponsibility.

This Rule states that written notice ofsuch cessation of practice shall be mailed tothose clients, opposing counsel, courts, agencieswith which the attorney has matters pending,malpractice insurers, and any other person orentity having reason to be informed of thecessation of practice. If the attorney has died,the notice is to be given by the personalrepresentative of the estate or by any personhaving lawful custody of the attorney’s files andrecords including those persons who had beenemployed by the deceased attorney. SeeAppendix B for complete text.

B. Application of the Rule. Although this ruledoes not apply to non-lawyers, a lawyer servingas an executor or administrator seemingly wouldbe required to comply with its provisions evenwhen dealing with the probate of another lawyer.

C. Selected Compliance Problems.1. State of Decedent’s Files. Rule

13.01 assumes that the deceased lawyermaintained meticulous records, had well-organized files, and had a current address forevery one to whom notice will be given. Thismay not always be the case.

2. Notice Prior to April 1, 2007. Sincenotice under old Rule 13.01 required“information identifying the matter”, a generic orboiler plate type notice would not comply with therequirement and thus much effort was requiredto locate and describe all matters in each notice,even those handled decades ago. This was tobe an unnecessary burden and expense toimpose on the deceased lawyer’s family, staff,and personal representatives.

3. Content of Notice. The noticeshould identify the deceased attorney, indicatethe date of death, state that the attorney-clientrelationship ended with that death, advise of thelocation of the files, and recommend that theclient obtain other counsel.

4. Mailing. The envelope shouldinclude a legend such as “Address ServiceRequested” and certified mail should beconsidered. Undoubtedly some notices will bereturned as undeliverable.

5. Forbidden Conduct. A lawyer shallnot engage in conduct that constitutes barratryas defined by the law of this state. DR8.04(a)(9).

6. Barratry Issues Arising Out OfPersonal Or Telephone Contact. The criminaloffense of barratry is committed when a person,with intent to obtain an economic benefit, solicitsemployment, either in person or by telephone,for himself or for another. Texas Penal Code§38.12(a).

A professional who knowingly acceptsemployment within the scope of the person’slicense also commits the offense of barratry ifthe employment is the result of someone else’spersonal or telephone solicitation. Texas PenalCode §38.12(b).

An offense under either of theseprovisions is a felony of the third degree(imprisonment for a term of not more than 10years or less than 2 years with a possible finenot to exceed $10,000). Texas Penal Code§12.34.

It is an exception to prosecution under theforegoing paragraphs if such conduct isauthorized by the Texas Disciplinary Rules ofProfessional Conduct or any rule of court. Texas Penal Code §38.12(c).

7. Query. Is specific authorization inthe Rules required? Or is it enough if it is notprohibited? Do the Rules actually authorize suchcontact?

8. Barratry Issues Arising Out OfWritten Communications. An attorney commitsthe offense of barratry if, with the intent to obtainprofessional employment for himself or foranother, sends a written communication thatconcerns a lawsuit of any kind, including anaction for divorce, in which the person to whomthe communication is addressed is a defendantor a relative of that person, unless the lawsuithas been on file for more than 31 days beforethe date on which the communication wasmailed. Texas Penal Code §38.12(d).

2

An offense under §38.12(d) is a Class Amisdemeanor (a fine not to exceed $4,000,confinement in jail for a term not to exceed oneyear, or both). Texas Penal Code §12.21, but ifthe attorney has been previously convictedunder this Subsection (d), it is a felony of thethird degree. Texas Penal Code §38.12(h).

9. Final conviction of felony barratry isa serious crime for disciplinary purposes. TexasPenal Code §38.12(i).

10. Is relief possible?

V. JURISDICTION.

A. In General. At first glance, if wouldappear that a probate or county court wouldhave exclusive jurisdiction in dealing with issuesrelating to the winding up of the practice of adeceased solo practitioner (Probate Code,Section 4).

B. District Court Jurisdiction. However,under Section 13.02 of the Rules of DisciplinaryProcedure [Available in paperback edition ofWest Publishing Co. “Texas Rules of Court -State”], any “interested person may petition adistrict court in the county of the attorney’sresidence to assume jurisdiction over theattorney’s law practice.” When an attorney hasdied, the petition may be filed in a statutoryprobate court in the county of the attorney’sresidence.

Section 13.03 provides that following thefiling of the petition, the court shall set a hearingand issue an order to show cause, directing theattorney or his or her personal representative, orif none exists, the person having custody of theattorney’s files, to show cause why the courtshould not assume jurisdiction of the attorney’slaw practice. If the court finds that the attorneyhas died and that supervision of the court isrequired, the court shall assume jurisdiction andappoint one or more attorneys to examine files,contact clients and others who are affected bythe death of the attorney, apply for extensions oftime, and deliver files and other property toclients. No bond is required of the appointedlawyers and they are not to incur any liabilityexcept for intentional misconduct or grossnegligence. See also Appendix B for text of

Sections 13.02 and 13.03. Notice that theseRules do not address compensation for theappointees or the responsibility for its payment.

C. Statutory Courts Exercising ProbateJurisdiction. In counties where there is astatutory probate court, county court at law, orother statutory court exercising the jurisdiction ofa probate court, all applications, petitions andmotions regarding probate and administrationsshall be filed and heard in such courts ratherthan in the district courts, unless otherwiseprovided by the legislature. Probate Code,Section 5 (c).

Notwithstanding other provisions of theProbate Code, statutory probate courts may hearall applications filed against or on behalf of anydecedent’s estate, including estatesadministered by an independent executor. Allstatutory probate courts shall have the samepowers over independent executors that areexercisable by the district courts. In situationswhere the jurisdiction of a statutory probate courtis concurrent with that of a district court, anycause of action appertaining to estates orincident to an estate shall be brought in astatutory probate court rather than in the districtcourt. Probate Code, Section 5A (b).

A statutory probate court can hear apetition that follows Section 13.02 of the Rules ofDisciplinary Procedure and it can act on thatpetition in such a way as to provide the sameprotection to the appointed attorney.

Query. Is a temporary administration aworkable alternative?

VI. RESTRICTIONS ON ATTORNEY WHOWANTS TO “TAKE OVER THE FILE”.

A. In-Person or Telephone Contact. Inaddition to penalties under the Barratry Statutes DR 7.03 (a) prohibits an attorney who seeksprofessional employment from instituting in-person or telephone contact with the deceasedattorney’s former clients when a significantmotive for the lawyer’s doing so is the lawyer’specuniary gain. B. Advertising. DR 7.05 (a) prohibits certainwritten communications while DR 7.05 (b) setsforth certain other requirements for the content

3

of this “solicitation” including compliance with DR7.04 (a) through (c) relating to advertisements inthe public media.

1. Contingent fees. DR 7.04 (h)applies if services are to be rendered on acontingent fee basis and DR 7.04 (i) through (r)may also apply.

2. Retaining Copies. A copy of eachwritten solicitation communication, the relevantapproval thereof, and a record of the date ofeach such communication; the name andaddress to which each such communication wassent; and the means by which each suchcommunication was sent shall be kept by thelawyer or firm for four years after itsdissemination. DR 7.04 (d).

3. Special Marking. The solicitationshall be plainly marked “ADVERTISEMENT” onthe first page and on the envelope. DR 7.05 (b)(1).

4. Additional Requirements. See Rule 7.05.

C. Filing Requirements For PublicAdvertisements and Written Solicitations. Acopy of the written solicitation being sent,together with a representative sample of theenvelopes and the payment of the required fee($75 as of April 25, 2011) must be filed with theLawyer Advertisement and Solicitation ReviewCommittee of the State Bar of Texas, eitherbefore or concurrently with the mailing. DR 7.05(b) and 7.07 (a). The State Bar has a form forthis purpose. See Appendix C for excerpts ofthese Rules.

D. Prohibited Employment. A lawyer shallnot accept or continue employment when thelawyer knows or reasonably should know that theperson who seeks the lawyer’s services does soas a result of conduct prohibited by these rules. DR 7.06. If the criminal law doesn’t get you forbarratry, the grievance committee might.

E. An Exception? See Appendix D forInterpretative Comment 23.

VII. DEALING WITH A CLIENT’S FILE ANDOTHER PROPERTY.

A. Confidentiality. A lawyer should keep inconfidence information relating to representationof a client except so far as disclosure is requiredor permitted by the Texas Disciplinary Rules ofProfessional Conduct or other law. Section 3,Preamble to Texas Rules of ProfessionalConduct.

1. “Confidential information” includesboth “privileged information” and “unprivilegedclient information”. “Privileged information”refers to the information of a client protected bythe lawyer-client or attorney-client privilege. “Unprivileged client information” means allinformation relating to a client or furnished by theclient, other than privileged information, acquiredby the lawyer during the course of or by reasonof the representation of the client. DR 1.05 (a).

2. A lawyer shall not knowingly revealconfidential information of a client or formerclient to anyone other than the client, the client’srepresentatives, or the members, associates, oremployees of the lawyer’s law firm. DR 1.05 (b)(ii).

3. A lawyer may reveal confidentialinformation when the lawyer has been expresslyauthorized to do so in order to carry out therepresentation; when the client consents afterconsultation; or to the client, the client’srepresentatives, or the members, associates,and employees of the lawyer’s firm, except whenotherwise instructed by the client, or to the extentnecessary to enforce a claim. DR 1.05 (c) (1),(2), (3), (5)

B. Safekeeping Property. A lawyer shallhold funds and other property belonging in wholeor in part to clients or third persons that are in alawyer’s possession in connection with arepresentation separate from the lawyer’s ownproperty. Such funds shall be kept in a separateaccount, designated as a “trust” or “escrow”account, maintained in the state where thelawyer’s office is situated, or elsewhere with theconsent of the client or third person. Other clientproperty shall be identified as such andappropriately safeguarded. Complete records ofsuch account funds and other property shall bekept by the lawyer and shall be preserved for aperiod of five years after termination of therepresentation. DR 1.14 (a).

4

C. Funds Or Other Property Held For Clients. Every attorney licensed to practice law in Texaswho maintains, or is required to maintain, aseparate client trust account or account,designated as such, into which funds of clientsor other fiduciary funds must be deposited, shallfurther maintain and preserve for a period of fiveyears after final disposition of the underlyingmatter, the records of such accounts, includingcheckbooks, canceled checks, check stubs,check registers, bank statements, vouchers,deposit slips, ledgers, journals, closingstatements, accountings, and other statementsof receipts and disbursements rendered toclients or other parties with regard to client trustfunds or other similar records clearly reflectingthe date, amount, source and disbursements ofthe funds or other property of a client. Rules ofDisciplinary Procedure 15.10.

D. Attorney’s Lien. A lawyer shall notacquire a proprietary interest in the cause ofaction or subject matter of litigation the lawyer isconducting for a client, except that the lawyermay acquire a lien granted by law to secure thelawyer’s fee or expenses. DR 1.08 (h).

1. Upon termination of representation,a lawyer shall take steps to the extentreasonably practicable to protect a client’sinterests, such as giving reasonable notice to theclient, allowing time for employment of othercounsel, surrendering papers and property towhich the client is entitled and refunding anyadvance payments of the fee that have not beenearned. The lawyer may retain papers relatingto the client to the extent permitted by other lawonly if such retention will not prejudice the clientin the subject matter of the representation. DR1.15 (d).

2. There is no statutory attorney’s lienin Texas. To the extent that the lien exists, it isa passive, common law, possessory lien. Burnett v. State, Tex. Cr. App., 642 S.W. 2d 765. A demand for payment is a pre requisite to thelien. Smith v. The State of Texas, Tex Civ. App.,Corpus Christi, 490 S.W. 2d 902 (1972)rehearing denied.

3. Ethics Opinion 118, September1955. An attorney should not be required todeliver his entire set of files to his client upon

termination of the professional relationship. Anattorney should retain within his files all matterspurely personal to him and should turn over tothe client only those papers which would affecteither the rights or the exercise of the rights ofthe client. This is known as the “end productrule”. An attorney is privileged to delaydelivering items to the client until he has had anopportunity to make an inventory of his files anddetermine what should be turned over to theclient.

Note: The Professional Ethics Committeeof the Supreme Court is, a statutorily createdcommittee, charged with the task of issuingwritten opinions on ethical questions raised byTexas attorneys. The full text of all of theopinions is available at www.txethics.org.

4. Ethics Opinion 395, May 1979. The existence and enforceability of an attorney’slien with respect to a client’s property, papersand files is a question of law. In Texas, anattorney’s lien is recognized by the common lawunder certain circumstances. The Code ofProfessional Responsibility (the “Code”),however, does place restrictions upon thelawyer’s right to assert a possessory lien withrespect to the client’s property, papers and files.

The Code [former DR 2-110 (A) (2)]provides that a lawyer must take reasonablesteps to avoid foreseeable prejudice to the rightsof his client, including delivering to the client allthe papers and property which the client is“entitled”. Thus, a lawyer ethically may asserthis attorney’s lien with respect to a client’spapers and property only where the attorney’slien is enforceable under the law and, in anyevent, may not refuse to deliver the client’spapers and property to the client if retention ofthe file would prejudice the rights of the client.

Common law possessory attorney’s lienhas been held to be unenforceable if the lawyervoluntarily withdraws, is justifiably dischargedbecause of misconduct, relinquishes possessionof the client’s property, or has not demandedpayment of the debt.

EC 2-32 requires a lawyer “to minimizethe possibility of harm”.

While the Code does not expresslyprohibit the assertion of an attorney’s lien whererecognized under applicable law, it places

5

severe ethical restrictions on an attorney’s rightto assert his lien where the client’s legal rightswould be jeopardized.

The assertion of an attorney’s lien willpresent both ethical and legal questions whichmust be decided under the facts andcircumstances of each case.

Any lawyer who contemplates retainingpossession of the client’s property and papersshould be aware of the possibility that this actionmay be determined to be unethical because theattorney’s lien is legally unenforceable orenforcement of the lien resulted in damage orprejudice to his client’s rights. A jury could findthat the attorney was not trying to establish apossessory lien but was willfully and wrongfullyrefusing to relinquish a client’s documents. Thus, an attorney who refuses to relinquish theclient’s files does so at his peril.

5. Ethics Opinion 411, January 1984. Having first made demand for payment and inthe absence of limiting circumstances, anattorney may withhold the papers, money orproperty of a client until the outstanding fees anddisbursements have been paid.

Actual, foreseeable prejudice of a client’srights, as distinguished from mere inconvenienceor annoyance, creates an ethical violation incontravention of the Disciplinary Rules. Anattorney who has once been retained torepresent a client’s rights may not laterprecipitate actual harm to those rights merely tocollect a fee. The retaining lien does notconstitute an absolute shield against the chargeof unethical conduct.

6. Query. Is the possessory nature ofthe lien extinguished when a solo practitionerdies?

7. Query. Does the non-lawyerexecutor or heir have the right to the lien?

8. Query. Is it smart to admit such alien?

VIII. HANDLING PROBATE OF DECEASEDLAWYER’S ESTATE.

A. General Problems. 1. The lawyer’s will does not provide

adequate guidance for closing or selling the

practice. See Appendix E for possible provisionsfor an attorney’s will.

2. All of the other probate proceduresare applicable to a lawyer’s estate. These arejust a few of the “extras”.

3. Deceased lawyer practiced inareas where probating lawyer lacks expertise.

4. Deceased lawyer’s records may bedisorganized making it extremely difficult todetermine status, critical dates, andresponsibilities.

5. Someone, presumably a lawyer,must take time to review files, contact clients,and meet with clients to answer their questions. Where clients have obtained other counsel,arrangements must be made to transfer theirfiles. Should the client pay or be expected topay for these services? Can the probatingattorney afford to do this at a reduced rate? Canthe estate afford to pay for these services?

6. Personal representative shouldnotify the deceased lawyer’s malpractice carrierto obtain extended reporting period endorsement(commonly known as “tail policy”). This is not anew malpractice policy. It simply extends thetime to report a claim under the existing policywith its existing restrictions, limits, anddeductibles. The tail policy should cover theentirety of the time remaining under applicablestatutes of limitation that are typically two years. Texas Civil Practice & Remedies Code §16.003.

7. However, the Texas SupremeCourt has held that the statute of limitationsrelating to an attorney’s malpractice does notbegin to run until the discovery of the act oromission. Willis v. Maverick, 760 S.W.2d 642(Tex. 1988).

B. Standard Operating Procedures For AllEstates Of All Lawyers.

1. The first priority is to checkcalendar and active files to determine deadlinesand due dates.

2. Open and review all unopenedmail.

3. Review all unfiled documents andmatch to appropriate files.

4. Contact clients to advise ofsituation and need for prompt action. But seeSection IV.C. regarding barratry.

6

5. Contact courts and opposingcounsel for matters involving pressing deadlines.

6. Review files to determine whichfiles are open and which are closed and theextent to which copies or other materials shouldbe retained.

7. Maintain detailed records ofdisposition of all client files and get receipts.

8. Review all undeposited checks andeither return them to payor or deposit them.

9. Send final bills to clients.10. Analyze funds in trust account and

return unearned portion to clients.11. Notify bar associations of

attorney’s death.12. Notify malpractice carrier and

consider “tail coverage”.13. Determine ownership of client files

and their contents and take appropriate action. See Appendix F “File Documentation, Retention,and Destruction”.

C. When Client Desires Referral To OtherCounsel.

1. Is there a duty to recommend alawyer?

2. Should more than one berecommended?

3. What about recommending the barassociation referral service?

4. Is there liability for negligentreferral?

5. What if a review of the file containsclear evidence of malpractice or malfeasance? Is there a duty for a non-lawyer executor to makea disclosure? What about the lawyer/executor?

D. When Client Has Obtained New Counsel.1. Obtain written authorization from

client to deliver files to new counsel.2. Make copies of original documents

returned to clients.3. Arrange for substitution of counsel

in litigated matters and be sure of filing andapproval by the Court.

4. Deliver files and obtain receipt foreach.

IX. GOOD OFFICE PROCEDURES THATPROVIDE INCREASED PROTECTION FOROUR CLIENTS.

A. Fee Agreements. Have writtenengagement agreement for all client matters. See Section X.A. of this paper.

B. Docket Control. Maintain currentcalendaring system with built in redundanciesand enter all deadlines into calendaring system.

C. Separate Files. Create a separate file foreach client matter.

D. Action Plan. Create a plan of action foreach client matter and keep it updated.

E. Current Filing. Maintain filing on a currentbasis.

F. Trust Account. Maintain separate trustaccount with subsidiary ledger for each clientwhose funds you hold.

G. Time Records. Maintain current time andservice records.

H. Billing And Receivables. Bill regularly andmaintain records of aged accounts receivable.

I. Keep Up With Workload. Complete workpromptly and try to close as many files aspossible.

J. File Review. Review each file whenclosing it to return original documents to theclient, destroy extraneous material, note anyunusual circumstance or problems, and set adestruction date for the file.

K. Closure Letter. Send client a closureletter and return all original documents. SeeSection X. B. of this paper

L. Client Lists. Create and maintain acurrent listing of all present and past clients, theiraddresses, and a description of all mattershandled for them.

7

M. Don’t Hold Original Documents. Refrainfrom serving as the repository of clients’ originalwills and other documents. See Appendix G for“Selected Issues In Retaining Original Wills”.

N. Don’ t Take On Non-LawyerResponsibilities. Refrain from serving asregistered agent of a corporation or as anexecutor or trustee for a client.

O. Create Referral Lists. Create a list ofcompetent attorneys in all practice areas towhom referrals can be made.

P. Back-Up Attorney. Make an effort tolocate one or more lawyers who can back you upin emergencies. Courts are beginning to requirelawyers to designate at least one attorney whohas consented to act while the original lawyer ison vacation. Eg. Rule 9.1 of Trial Division ofFamily District Courts of Harris County, Texas. That rule requires client consent to thatrepresentation and the designated attorney’sparticipation is limited to emergencies.

X. GOOD PROCEDURES THAT INCREASEPROTECTION FOR YOURSELF AND YOURFAMILY.

A. Written Employment Agreements. Aproper employment agreement or engagementagreement can go a long way in avoiding manyproblems.

1. A lawyer may limit the scope,objectives and general methods of therepresentation if the client consents afterconsultation. DR 1.02 (b).

2. When the lawyer has not regularlyrepresented the client, the basis or rate of thefee shall be communicated to the client,preferably in writing, before or within areasonable time after commencing therepresentation. DR 1.04 (c). In addition to otherrequirements, a contingent fee agreement shallbe in writing. DR 1.04 (d).

3. Suggested language to include inagreement.

Client understands that in order toprotect Client’s interests in the event ofdisability or death of Lawyer, it may benecessary or appropriate for a staffmember, a personal representative(including someone acting under a powerof attorney), or another lawyer who isretained by any such person or by Lawyerto have access to Client’s files andrecords in order to contact Client, todetermine appropriate handling of Client’smatters and files, and with Client’ssubsequent approval, to make referrals tocounsel for future handling. Client grantspermission and waives all privileges to theextent reasonably necessary orappropriate for such purposes.

Furthermore, in the event ofLawyer’s death or disability, if furtherservices are required in connection withClient’s representation and anotherlawyer is subsequently engaged by Client,Client expressly authorizes a division offees based on the proportion of workdone or the responsibilities assumed byeach. Such division specificallyauthorizes the payment of fees andexpenses to Lawyer’s estate, personalrepresentatives, and heirs even thoughsome or all of them may not be lawyers.

Lawyer shall return all documentsprovided by Client as well as all originaldocuments generated in connection withthe representation. Lawyer may retaincopies of all such documents. Lawyershall own all other materials anddocuments.

Lawyer may destroy any of Client’sfiles at any time with Client’s writtenconsent and in any event, after five yearsfrom the conclusion of the representation. During that five year period, Lawyer shallmake such files available to Client forexamination and copying. No further

8

notice to client will be required prior tosuch destruction.

B. Conclude Representation. Uponconclusion of the lawyer’s responsibility withrespect to a particular matter, it is a good idea tosend a “termination letter”.

1. The letter should state that thelawyer’s services have been completed andshould specify any actions to be taken by theclient. Original documents and other materialsfurnished by the client should be returned.

2. Suggested language to include.

During our representation of you,we have created one or more filescontaining notes and documents relatingto this matter. All original documents andother materials furnished by you havebeen returned to you previously, sent toother appropriate parties, or are enclosedwith this letter.

It is our firm policy to destroy fileswhen we no longer need them. We inviteyou to examine your files during ournormal office hours to determine if youwould like copies of any of their contents. Please consider doing so as soon aspossible while this is fresh in our minds. We remind you that it is our policy todestroy most files after five yearsfollowing the conclusion of our servicesand that our initial agreement confirmedthis procedure. No further notice will begiven to you prior to such destruction.

3. This may have the effect ofidentifying the commencement of an applicablelimitations period. The general rule is thatmalpractice claims must be brought not laterthan two years after the day the cause of actionaccrues. Texas Civil Practice and RemediesCode §16.003. But note that Texas has adoptedthe rule that the limitations period commencesupon discovery of the attorney’s actions oromissions. Willis v Maverick, 760 S.W.2d 642(Tex. 1988).

4. This is a good time to review thefile to determine if there are any items thatshould be disposed of.

XI. SALE OF A LAW PRACTICE.

A. Overriding Concern. The overridingconcern that inhibits the sale of a law practice isprotection of the clients’ confidences, rights, andproperty. One of the concerns relating to theissue of multi-disciplinary practice (“MDP”) wasthe sale of a law practice. In that context, theissue involves the sale to a non-lawyer. Thispaper does not deal with that issue.

B. The Major Issues: Confidentiality,Solicitation, and Fee Sharing With Non-Lawyers.

1. Confidentiality. Every lawyer’s filescontain confidential information from clientswhich neither the lawyer nor the lawyer’s heirs orpersonal representatives may properly disclosewithout the clients express permission.

2. Ethics Opinion 464, August 1989. A lawyer may not sell accounts receivable to athird party factoring company unless each clientinvolved has previously given consent, afterconsultation with the lawyer, to the disclosure ofconfidential information incident to such sale.

In some cases, the fact that the lawyerwas engaged by the client may be confidential;in many cases, the nature of the legal servicesresulting in the fee statement would beconfidential; in most cases, the amount of thefee owing and the fact that the fee has not beenpaid would be confidential.

Consent of the client based on informedcommunication is the only permissible basis forthe disclosure of confidential information. Thatconsent can be a part of the engagement letteras a condition to the lawyer’s acceptingemployment.

3. Ethics Opinion 479, August 1991. DR 1.05 prohibits the disclosure of the names ofthe firm’s clients and the amounts owed by eachclient.

An attorney is an agent for the client andan agent may not disclose or use informationrelating to the principal where such information

9

is obtained during the course of the agent’semployment. The protections afforded underagency law exceed those which arise solely froman attorney-client privilege.

Confidential information includes bothprivileged information as well as unprivilegedclient information and both types are confidentialin nature. DR 1.05 (a) states in pertinent partthat a lawyer shall not knowingly revealconfidential information of a client or a formerclient to anyone else, other than the client, theclient’s representatives, or the members,associates, or employees of the lawyers law firm.

4. Query. How could a practice bedescribed, valued, or sold in light of thatrestriction?

5. Query. Does that restriction resultin unequal protection of the law as to solopractitioners?

6. What about using a confidentiallyagreement?

7. Solicitation. a. For more details, refer to

Sections IV and V of this paper.b. Advertising “Established

Clientele”. In Ethics Opinion 266, October 1963(Texas), a widow proposed to advertise in theTexas Bar Journal: For sale: library, furniture,good lease, and established clientele. Theopinion concluded that it was unethical for alawyer to purchase, to sell, or to advertise forsale a law practice with “established clientele”. The Committee concluded that while a non-lawyer heir is not bound by these ethicalrestraints, no Texas lawyer could purchase oraccept advertisement for publication in the BarJournal. Although it was proper to advertise forsale the library, office equipment, and unexpiredlease, it was a violation of old Canon 24 to solicit“established clientele” to continue their businesswith the purchaser.

The times they are a changing. SeeAppendix H for copies of actual ads published inthe Texas Bar Journal since 2006 offering lawpractices for sale.

c. Listing In Yellow Pages. Ethical Opinion 185, October 1958, regarded itas a violation for any attorney to list in the yellow

pages of the telephone directory the name of adeceased attorney.

d. Query. Does this restrictionprotect or harm the clients who are searching fortheir documents previously entrusted to theirnow deceased solo practitioner?

e. F i r m N a m e s A n dLetterhead. Ethics Opinion 375, October 1974,referred to then applicable DR 2-102 (A) (4)providing that a letterhead of a law firm may alsogive the names of members and associates andnames and dates relating to deceased andretired members.

This conclusion was formalized into thecurrent Disciplinary Rules which provide that alawyer in private practice shall not practice undera trade name, or a name that is misleading as tothe identity of the lawyer or lawyers practicingunder such name, or a firm name containingnames other than those of one or more lawyersin the firm . . . . and if otherwise lawful, a firmmay use as, or continue to include in, its namethe name or names of one or more deceased orretired members of the firm or of a predecessorfirm in a continuing line of succession. DR 7.01(a).

f. If practicing in any mannerother than as a sole proprietor, special attentionmust be paid to the entirety of DR 7.01(a).

g. Query. Are clients properlyprotected by permitting larger firms to operateunder what in essence is a trade name whileprohibiting it for solos? Does this deny equaltreatment to solos?

7. Fee Sharing With Non-Lawyers. Here, the debate rages, not only with respect tobarratry, ambulance chasers, runners, and thelike, but also regarding the key barriers to multi-disciplinary practice – confidentiality, conflicts ofinterest, control, and encouraging non-lawyers toengage in the unauthorized practice of law.

Lost in the shuffle are the concerns of thefamilies of deceased lawyers and their need torealize value from the practice of their nowdeceased solo practitioner.

There is an obstacle course in DR 5.04that must be traversed in order to obtain thepermitted benefits. That Rule provides, in part,

10

that a lawyer or law firm shall not share orpromise to share legal fees with a non-lawyer,except that a lawyer who undertakes to completeunfinished legal business of a deceased lawyermay pay to the estate of a deceased lawyer thatproportion of the total compensation which fairlyrepresents the services rendered by thedeceased lawyer. DR 5.04 (a). Note that thisRule does not recognize responsibility assumedas a basis for division.

The foregoing is in addition to DR 1.04 (f)relating to requirements for division of feesbetween living lawyers who are not in the samefirm. DR 1.04 (h) expands that rule by statingthat it does not prohibit payments to a formerpartner or associate pursuant to a separation orretirement agreement.

Note that DR 1.04 (f) emphasizes that thedivision of fees between lawyers not in the samefirm shall not be made unless the division is inproportion to the professional servicesperformed by each lawyer or when the division ismade between lawyers who assume jointresponsibility for the matter.

The evil to avoid is not the collecting offunds by the solo’s estate or heirs, but rather thepayment by the purchasing lawyer. Atkins v.Tinning. 965 S.W.2d 533 (Tex Civ App 1993)

C. CLOSING A PRACTICE.1. If closing a practice, see Appendix

I.2. Query. What if deceased attorney

was sole shareholder of a professionalcorporation?

D. ABA MODEL RULE 1.17.1. This rule permits the sale of a law

practice, including its goodwill. This Rule, orsome variation, has been adopted in all but fourstates with Texas being one of the four. Theother states are Alabama, Louisiana, andKansas.

2. The full text of the rule togetherwith explanations and rationale is set forth inAppendix J.

E. Arguments Against Permitting Sale of LawPractice.

1. Clients are not commodities thatcan be purchased and sold at will.

2. Clients have no control over theselection of the purchaser.

3. The seller would be motivated topoint clients to the firms that pay the highestreferral fees rather than to the best lawyers.

4. Purchasers would pay lessattention to files where they had to split fees.

5. If a value can be placed ongoodwill for this purpose, it could be anadditional asset subject to death taxes.

F. Arguments In Favor Of Permitting Sale OfLaw Practice.

1. Although clients cannot be boughtand sold, what is valuable to a purchaser is thepotential opportunity to handle their affairs.

2. There are two elements beingtransferred - the hard assets of the practice anda system for generating future revenues.

3. The purchaser, seller, and client allhave mutually beneficial interests. Thepurchaser wants an ongoing stream of incomefrom an established client base and referralsource. The seller wants to benefit from areputation built over a lifetime of serving clients,contacts, referral sources, current files, and aninfrastructure for delivering legal services. Clients want solutions to problems and issues,consistent advice and counsel, and theconvenience of not having to shop for anotherlawyer.

4. Clients benefit because someonewith a vested interest takes over the practice. Who is better to help the clients than someonewho has paid for the privilege of serving them?

5. When one lawyer takes over thepractice of another lawyer, the selling lawyer (orthe estate or heirs) should be able to obtaincompensation for the reasonable value of thepractice just as withdrawing partners of law firmsmay do.

6. Negotiations between thepurchaser and seller relating to specificrepresentation of identifiable clients no more

11

violates confidentiality than do discussionsconcerning firm mergers, lateral hires, oradmission of new partners and their respective“books of business”.

7. Sale to a lawyer who was not pre-approved by the clients is no different for theclients than a law firm hiring new associates oradmitting new partners who were not pre-approved by the clients.

8. All elements of client autonomysurvive the sale.

G. Valuation And Payment. The valuation ofthe practice presents many challenges. Thecomputer, library, and other tangible assets areof rapidly depreciating value. What is of value isthe potential for keeping the practice alive.

1. The seller wants to be assured thatthe clients have access to quality legal services,that the risk of seller’s malpractice is minimized,that seller receives a fair price for the opportunitybeing afforded to the purchaser, and that theseller is paid by the purchaser.

2. The purchaser wants a ready-made opportunity, an established clientele, theexisting telephone number and perhaps an officebuilding or favorable lease, and the ability to payfor all of this when, as, and if fees are collected.

H. Is Sale Permitted If Not SpecificallyProhibited?

Texas does not have a rule comparable toABA Rule 1.17 and thus the Texas rule is notclear. Even if permitted, there are many hurdlesto jump and some serious ethical risks areimposed on the purchaser.

XII. THE FUTURE. This paper has attemptedto describe the current situation and to stimulatediscussion of the issues. Some changes shouldbe made in our rules to facilitate the dispositionof the practice of a solo practitioner. Whether asale of an ongoing law practice should bepermitted is an issue for another presentation.

12

APPENDIX AHAS THE PARADE PASSED US BY?

It’s a familiar story. There is a parade. The band is playing. The soldiers are marching. Suddenly, a lady cries out, “They’re all out ofstep except for Johnny.”

Like Johnny, most solo practitionersmarch to a different drummer. Are we out ofstep with the rest of the profession? Is theparade passing us by? Can a lawyersinglehandedly cope with the demands of lawpractice in the late 20 century?th

Will the shrapnel from the informationexplosion be the ultimate weapon ultimateweapon that will bring about he demise of thesolo practitioner?

For years the prognosticators have saidthat it was just a matter of time before solopractitioners would be a relic of the past.

But an American Bar Foundationdemographic study indicates otherwise. It showsthat in 1988, approximately 46 percent of allpracticing lawyers were solo practitioners. AsMark Twain once said, “The news of my death issomewhat exaggerated.”

There is confusion among the troops. Just what is a solo practitioner? Is it the samething as a sole proprietor? What if the soloemploys other lawyers? Or is it the soleshareholder of a professional corporation? Andwhat about those quasi-solo practitioners whoparade in partners’ clothing? Does any of itmatter? Perhaps Proverbs 23:7 provided theanswer with “For as a man thinketh in his heart,so is he.”

Whatever a solo practitioner may be, thelawyer who chooses this life quickly learns thata solo is in charge of planning, businessdevelopment, administration, marketing,managing, accounting, and yes, production. Among lawyers, the solo must emulate the

qualities of the renaissance man and be allthings to all people at all times while remainingomni-competent.

Viewed from this angle, it is any wonderthat most people predict the disappearance ofsolo practitioners? Even Darwin might haveexpected natural selection to have favored grouppractice and the extinction of the solo.

But wait a minute. There is anindependent spirit of self-confidence that runs sodeep and is so strong in most solos that yousense that these people will be able to withstandthe winds of change that batter the profession. That confidence is combined with a burningneed for personal involvement with their clients,the desire to make a difference in the lives ofothers, and the firm belief that this can be donebest in the entrpreneurial ambience of solopractice.

The fabric of solo practice is woven iningenuity, independence, flexibility and strongself-images. Here and there, snags made bymisgivings and loneliness can be found, but thesolo practitioner presents a dashing figure whenclothed in the uniform made of this fabric.

Imagine a giant army of lawyers. Solopractitioners, corporate counsel, governmentlawyers,. And the partners and associates formfirms of all sizes line up, close ranks, and wait fortheir marching orders. The drums begin to rolland the band begins to play. Here they comenow. As they parade before you, look again. IsJohnny really out of step?

This article first appeared in Flying Solo,a 1984 publication of the Law PracticeManagement Section of the American BarAssociation and was reprinted in the January1992 issue of the Journal of the American BarAssociation as the first of the author’s SoloNetwork articles.

13

APPENDIX B

EXCERPT FROM CURRENT RULES OF DISCIPLINARY PROCEDURET.2, Subt.G, App.A-1

PART XIII. CESSATION OF PRACTICE

13.01 Notice of Attorney’s Cessation ofPractice

When an attorney licensed to practice lawin Texas dies, resigns, becomes inactive, isdisbarred, or is suspended, leaving an activeclient matter for which no other attorney licensedto practice in Texas, with the consent of theclient, has agreed to assume responsibility,written notice of such cessation of practice shallbe mailed to those clients, opposing counsel,courts, agencies with which the attorney hasmatters pending, malpractice insurers, and anyother person or entity having reason to beinformed of the cessation of practice. If theattorney has died, the notice may be given bythe personal representative of the estate of theattorney or by any person having lawful custodyof the files and records of the attorney, includingthose persons who have been employed by thedeceased attorney. In all other cases, noticeshall be given by the attorney, a personauthorized by the attorney, a person havinglawful custody of the files of the attorney, or byChief Disciplinary Counsel. If the client hasconsented to the assumption of responsibility forthe matter by another attorney licensed topractice law in Texas, then the above notificationrequirements are not necessary and no furtheraction is required.

13.02 Assumption of Jurisdiction

A client of the attorney, Chief DisciplinaryCounsel, or any other interested person maypetition a district court in the county of theattorney’s residence to assume jurisdiction overthe attorney’s law practice. If the attorney hasdied, such petition may be filed in a statutoryprobate court. The petition must be verified andmust state the facts necessary to show cause to

believe that notice of cessation is required underthis part. It must state the following:

A. That an attorney licensed to practicelaw in Texas has died, disappeared, resigned,become inactive, been disbarred or suspended,or become physically, mentally or emotionallydisabled and cannot provide legal servicesnecessary to protect the interests of clients.

B. That cause exists to believe thatcourt supervision is necessary because theattorney has left client matters for which no otherattorney licensed to practice law in Texas has,with the consent of the client, agreed to assumeresponsibility.

C. That there is cause to believe that theinterests of one or more clients of the attorney orone or more interested persons or entities will beprejudiced if these proceedings are notmaintained.

13.03 Hearing and Order on Application toAssume Jurisdiction

The court shall set the petition for hearingand issue an order to show cause, directing theattorney or his or her personal representative, orif none exists, the person having custody of theattorney’s files, to show cause why the courtshould not assume jurisdiction of the attorney’slaw practice. If the court finds that one or moreof the events stated in Section 13.02 hasoccurred and that the supervision of the court isrequired, the court shall assume jurisdiction andappoint one or more attorneys licensed topractice law in Texas to take such action as setout in the written of the court including, but notlimited to, one or more of the following:

14

A. Examine the client matters, includingfiles and records of the attorney’s practice, andobtain information about any matters that mayrequire attention.

B. Notify persons and entities thatappear to be clients of the attorney of theassumption of the law practice, and suggest thatthey obtain other legal counsel.

C. Apply for extension of time before anycourt or any administrative body pending theclient’s employment of other legal counsel.

D. With the prior consent of the client,file such motions and pleadings on behalf of theclient as are required to prevent prejudice to theclient’s rights.

E. Give appropriate notice to persons orentities that may be affected other than theclient.

F. Arrange for surrender or delivery tothe client of the client’s papers, files, or otherproperty.

The custodian shall observe the attorney-clientrelationship and privilege as if the custodianswere the attorney of the client and may makeonly such disclosures as are necessary to carryout the purposes of this part. Except forintentional misconduct or gross negligence, noperson acting under this part may incur anyliability by reason of the institution ormaintenance of a proceeding under this PartXIII. No bond or other security is required.

15

APPENDIX CEXCERPTS FROM TEXAS DISCIPLINARY RULES OF PROFESSIONAL CONDUCT

7.05. Prohibited Written Solicitations

(b) . . . . written . . . . communication to aprospective client for the purpose of obtainingprofessional employment:

(1) shall, in the case of a non-electronically transmitted written communication,be plainly marked “ADVERTISEMENT” on itsfirst page, and on the face of the envelope orother packaging used to transmit thecommunication.

(5) shall disclose how the lawyerobtained the information prompting thecommunication to solicit professionalemployment if such contact was prompted by aspecific occurrence involving the recipient of thecommunication, or a family member of suchperson(s).

(d) All written . . . communications madeto a prospective client for the purpose ofobtaining professional employment of a lawyer orlaw firm must be reviewed and either signed byor approved in writing by the lawyer or a lawyerin the firm.

(e) A copy of each written . . . solicitationcommunication, the relevant approval thereof,and a record of the date of each suchcommunication; the name, address, telephonenumber, or electronic address to which eachcommunication was sent; and the means bywhich each such communication was sent shallbe kept by the lawyer or firm for four years afterits dissemination.

(f) The provisions of paragraphs (b) and(c) of the Rule do not apply to a writtensolicitation communication

(3) if the lawyer’s use of thecommunication to obtain professionalemployment was not significantly motivated by a

desire for, or by the possibility of obtainingpecuniary gain.

Rule 7.07. Filing Requirements for PublicAdvertisements and Written Solicitations

(a) . . . . a lawyer shall file with theAdvertising Review Committee of the State Barof Texas, no later than the mailing or sending byany means of a written solicitationcommunication:

(1) a copy of the written . . .solicitation communication being sent or to besent to one or more prospective clients for thepurpose of obtaining professional employment,together with a representative sample of theenvelopes or other packaging in which thecommunications are enclosed;

(2) a completed lawyer advertisingand solicitation communication application form;and

(3) payment of the fee set by theBoard of Directors.

(e) The filing requirements of paragraph(a) . . . . do not extend . . .

(7) if the lawyers’s use of thecommunication to obtain professionalemployment was not significantly motivated by adesire for, or by the possibility of obtainingpecuniary gain.

16

APPENDIX DINTERPRETIVE COMMENT 23 FROM ADVERTISING REVIEW COMMITTEE

23. Notification of Death Solo Practitioner to Practitioner’s Clients (February 2004)A written communication notifying the clients of a solo practitioner of the practitioner’s death may beexempt from the provisions of Rules 7.05 and 7.07 if the communication provides nothing more thannotification of the death, the relationship between the author of the letter and the deceased practitioner,and the location and availability of the deceased practitioner’s files.

If a written communication notifying the clients of the death of a solo practitioner also contains contentdesigned to communicate the qualifications or the availability of legal services of any lawyer or law firm,then Part VII, Texas Disciplinary Rules of Professional Conduct apply.

17

APPENDIX ESPECIAL PROVISIONS FOR ATTORNEY’S WILL

INSTRUCTIONS REGARDING MY LAWPRACTICE

I currently practice law as a solopractitioner. In order to provide a smoothtransition for my clients and to assist my family,I am providing these guidelines to my Executorand any attorney(s) representing my Executorand beneficiaries under this Will.

If my practice can be sold to a competentlawyer, I authorize my Executor to make suchsale for such price and upon such terms as myExecutor may negotiate, subject, however, tocompliance with the Texas Disciplinary Rules ofProfessional Conduct and other applicableprovisions of law. If such sale is possible, Ibelieve that it will provide maximum benefits formy clients as well as for my employees andfamily.

If my practice cannot be sold and I haveclient files, I recommend that, subject to consentof my clients, estate planning and probate filesbe referred to (name); real estate files to (name);corporation, partnership, and limited liabilitycompany files to (name); family law matters to(name); and personal injury files to (name).

In either instance, I recognize that mypractice has developed because of personalrelationships with my clients and that they arefree to disregard my suggestions.

Regardless of the method of disposing ofmy practice, I authorize my Executor to take allactions necessary to close my law practice anddispose of its assets. In doing so and withoutlimiting the foregoing, my Executor may do eachof the following:

(a) Enter my office and utilize myequipment and supplies as helpful in closing mypractice.

(b) Obtain access to my safe depositboxes and obtain possession of items belongingto clients.

(c) Take possession and control of allassets of my law practice including client filesand records.

(d) Open and process my mail.

(e) Examine my calendar, files, andrecords to obtain information about pendingmatters that may require attention.

(f) Notify clients and those whoappear to be clients of my death and that it is intheir best interests to obtain other counsel.

(g) Obtain client consent to transferclient property and assets to other counsel.

(h) Provide clients with their propertyand assets and copies of material in their filesand return unearned retainers and deposits.

(i) Notify courts, agencies, opposingcounsel, and other appropriate entities of mydeath and, with client consent, seek and obtainextensions of time.

(j) File notices, motions, andpleadings on behalf of clients who cannot becontacted prior to immediately required action.

(k) Contact my malpractice carrierconcerning claims or potential claims, to notify ofmy death, and to obtain extended reporting or“tail” coverage.

(l) Dispose of closed and inactive filesby delivery to clients, storage, and arranging fordestruction, remembering that records of mytrust account are to be preserved for at least fiveyears after my death as required by TexasDisciplinary Rule of Professional Conduct 1.14and Rule 15.10 of the Texas Rules ofDisciplinary Procedure or other provisions of law,and files relating to minors should be kept forfive years after the minor’s eighteenth birthday.

(m) Engage one or more attorneys towind up my law practice, make arrangements tocomplete work on active files and to allocatecompensation for past and future services.

(n) Send statements for unbilledservices and expenses and assist in collectingreceivables.

(o) Continue employment of staffmembers to assist in closing my practice andarrange for their payment.

(p) Pay current liabilities and expensesof my practice, terminate leases, and discontinuesubscriptions, listings, and memberships.

18

(q) Determine if I was serving asregistered agent for any corporations and, if so,notify the corporation of the need to designate anew registered agent (and perhaps registeredaddress).

(r) Determine if I was a notary publicand, if so, deliver the notarial record books to thecounty clerk of the county where I was soappointed in order to comply with TexasGovernment Code, Section 406.022.

(s) Rent or lease alternative space if asmaller office would serve as well as my presentoffice.

In performing the foregoing, my Executoris to preserve client confidences and secrets andthe attorney-client privilege and to makedisclosure only to the extent necessary for suchpurposes.

My Executor shall be indemnified againstclaims of loss or damage arising out of anyomission where such acts or omissions were ingood faith and reasonably believed to be in thebest interest of my estate and were not the resultof gross negligence or wilful misconduct, or, ifmy Executor is an attorney licensed to practicein Texas, such acts or omissions did not relate tomy Executor’s representation of clients as anattorney retained by those clients. Any suchindemnity shall be satisfied first from assets ofmy law practice, including my malpracticeinsurance coverage.

19

FILE DOCUMENTATION, RETENTION AND DESTRUCTIONAPPENDIX F

I. BACKGROUND.

The most frequently asked question to theState Bar law practice management consultantsis “What do I do with all the files?”

The lawyer who wants to develop a policycovering file retention, disposition, anddestruction must grasp and deal with the swirlingmix of property rights, the client’s right toconfidentiality, other ethical considerations, andpractical practice management.

The reality is that with the advent of wordprocessing and high speed office copyingmachines, there has been an unprecedentedproliferation of paper with which every lawyermust deal. This has led to problems for storageof all of that paper as well as issues relating toaccess of stored paper and even to electronicmedia. Even inexpensive electronic storage hasits problems. Changing technology has nothelped. Remember 5 inch floppy discs?

Practical issues aside, the currentapproaches seem to exhibit an overwhelming, ifnot somewhat unrealistic, desire to “protect” theclients.

Nevertheless, at some point, ethical rules,professionalism, property law concepts, andgood old fashioned common sense must cometogether to recognize that a lawyer cannot keepeverything forever.

II. FILE OWNERSHIP.

A. The Starting Point. File ownershipis the starting point for records retention andmaking a decision but there is no uniform rulethroughout the states.

B. Entire File Rule. Some states haveadopted the entire file rule where all file materialbelongs to the client.

C. End Product Rule. Other statestake the exact opposite position that except forclient owned property, the entire file belongs tothe lawyer. This is referred to as the “end

product” and “work product” models of fileownership.

D. Typical Contents Of A Lawyer’sFile. What might be found in “the client’s file”.

1. Documents entrusted tolawyer by client.

2. Original documents obtainedfrom others.

3. Or ig ina l d o c umen tsprepared by the lawyer.

4. Photocopies of signeddocuments.

5. Unsigned copies ofdocuments.

6. Prior drafts of documents.7. Correspondence.8. Receipts for expenditures

made for clients.9. Research materials

a. Briefsb. Legal memorandac. Copies of cases,

statutes, articles10. Lawyer’s notes and other

legal pad items.11. Billing, time keeping, and

service records.a. P r e b i l l s t h a t

summarize the services and/or reflect time spentb. Paper on which initial

entries were recorded12. Multiple copies of any of the

foregoing.13. Electronic versions of any or

all of the foregoing.E. Entire File Rule Carried to the

Extreme. “When a former client asks for its file,a law firm must include any electronicdocuments or components or components of thefile as well as whatever may be on paper. Thecost of locating and compiling the electronicrecords has no bearing on the law firm’s duty inthis regard.” See New Hampshire BarAssociation Ethics Opinion 2005-06/-03.

20

F. The Fuzzy Middle Ground. Thefile, or at least most of it, belongs to the clientand the client has the reasonable expectationthat the lawyer will maintain the file so that it isavailable when the client needs it. The client’sinterest in the file has often been described as aproperty right and thus the file belongs to theclient.

III. WHO OWNS WHAT?A. Resolution Trust corp. v H --- ,

P.C., 128 FRD 647 (N.D. Tex. 1989) is usuallycited for the proposition that the client ownsevery scrap of paper in the file and stating thatthe attorney has “no right or ability to unilaterallycull or strip from the files created or amassedduring his representation of that client . . .”

B. Another Real Case. Estate ofRobert Daniel Eichenour, Deceased, ProbateCourt Number 4, Harris County, Texas, DocketNumber 264,493-402.

Client died. Administratorsdemanded lawyer to deliver legal files that were“owned” by the Decedent. Lawyer files fordeclaratory judgment and claims attorney-clientprivilege and confidentiality of client informationand turns over original papers or documentsowned by the client but denied that Decedent“owned” files maintained by his attorney. Administrators were Decedent’s children whohad been involved in litigation with Decedent. Lawyer stated that Decedent gave confidentialinformation to his attorney with the reasonableexpectation that the information andcommunications would remain confidential.

Lawyer asked Court to determine(a) what portion of legal files other than originalclient papers were “owned” by Decedent andtherefore property which Administrators have aright to possess, and whether Administratorshave legal right to compel Decedent’s attorney toreveal confidential information and privilegedcommunications with Decedent.

On February 2, 1995, JudgeWilliam C. McCullough found that all files andthe entire contents thereof maintained by thelawyer, which are in his possession or under hiscontrol, were the property of Decedent during his

lifetime and that the Independent Administratorsare entitled to possession of them and orderedthe lawyer to deliver the files to theAdministrators.

C. Stop The Presses. In a morecurrent development, the Supreme Court ofTexas holds that there is no legal bar preventingan estate’s personal representative frommaintaining a legal malpractice claim on behalfof the estate against the decedent’s estateplanners. Kristin Terk Belt et al v. Oppenheimer,Blend, Harrison & Tate, Inc., et al., 192 SW 3rd

780 (TX 2006) It would not be much of a stretch to

believe that the personal representatives couldrequire lawyers to produce client files and theircontents.

D. Ethics Opinion 570 (2006) decidedthat the work product doctrine does not protectthe lawyer from the lawyer’s own client withrespect to notes created by the lawyer. Theopinion “does not address the issue with respectto other types of documents or informationcontained in a lawyer’s file” and that “withholdingsuch notes from a client denies the client the fullbenefit of the services the lawyer agreed toprovide to the client”.

E. Based on the foregoing, it appearsthat Texas either has adopted or is leaningstrongly to the entire file rule.

F. Suggested Language For AccessTo Client Files.

Client understandsthat in order to protect Client’sinterests in the event of disabilityor death of Lawyer, it may benecessary or appropriate for astaff member, a personalrepresentative (including someoneacting under a power of attorney),or another lawyer who is retainedby any such person or by Lawyerto have access to Client’s files andrecords in order to contact Client,to determine appropriate handlingof Client’s matters and of Client’sfiles, and to make referrals withClient’s subsequent approval to

21

counsel for future handling. Clientgrants permission and waives allprivileges to the extent necessaryor appropriate for such purposes.

Furthermore, in the event ofLawyer’s death or disability, iffurther services are required inconnect ion wi th C l ien t ’ srepresentation and another lawyeris subsequently engaged by Client,Client expressly authorizes adivision of fees based on theproportion of work done or theresponsibilities assumed by each. Such division specif ica l lyauthorizes the payment of feesand expenses to Lawyer’s estate,personal representatives, andheirs.

Lawyer shall return alldocuments provided by Client aswell as all original documentsgenerated in connection with therepresentation. Lawyer may retaincopies of all such documents aswell as all other materials.

Lawyer may destroy any ofClient’s files at any time withClient’s written consent and in anyevent, after five years from theconclusion of the representation. During that five year period,Lawyer shall make such filesavailable to Client for copying. Nofurther notice to client will berequired prior to such destruction.

IV. PARTING IS SUCH SWEET SORROW

A lawyer who leaves a firm may leave withthat firm the documents of those clients that thelawyer represented while with the firm, but thatlawyer must ensure that the lawyer reasonablybelieves that the firm has appropriatesafeguarding arrangements. So long as a

lawyer has custody of client’s documents, thelawyer must take reasonable steps inarrangements for storing, using, destroying, ortransferring them. If the jurisdiction allows alawyer’s practice to be sold to another lawyer,the lawyer must comply with the rules governingthe sale. If a firm dissolves, its members musttake reasonable steps to safeguard documentscontinuing to require confidentiality, for exampleby entrusting them to a person or depositorybound by appropriate restrictions.

1. Duties of attorneys inpossession of the inactive client files ofdeceased attorneys.

a. Is notice to lastknown address adequate?

b. How long shouldclients have to retrieve their records?

2. A l a w f i r m h a sresponsibilities to a client who was notrepresented by the firm but whose files are inpossession of the law firm.

3. Responsibility to the clientand for the files is a joint and several obligationof the lawyer who represented the client and thelawyer in possession of the files.

4. Frequency is exascerbatedwhen lawyers leave the firm (and leave the fileswith the firm), a lateral hire joins the firm, orwhen a firm dissolves.

V. SPECIAL CIRCUMSTANCES.

A. Lawyer, Insured, Insurer. Considerthe relationship of lawyer who represents aninsured and is retained and paid by an insurancecompany. Does the insured own the file? Ordoes the insurer? Are the insured’s medicalrecords “property of the client?” Does HIPAAapply? Can the attorney deliver the entire file tothe insurer without the consent of the insured?

B. Solo Practitioner. What about thesituation where a sole practitioner dies? Mustthe widow(er) or the estate store those filesindefinitely? Is there a different duty with regardto active files and inactive files? What dutiesbefall the lawyer who settles the estate?

22

VI. ALTERNATIVE PROVISIONS FOREMPLOYMENT AGREEMENT

A. Possible Alternative Language.

Client is entitled uponwritten request to any files in theFirm’s possession that relate tolegal services performed by theFirm for the Client, subject to theFirm’s right to make copies of anyfiles withdrawn by Client.

All client supplied materialsand all attorney end product(collectively “client material”) arethe property of Client. Examplesof attorney end product includefinalized contracts or estateplanning documents, deeds, andcorporate records.

Attorney work product is theproperty of the Firm. Examplesinclude photocopies of clientmaterials, drafts, notes, internalmemoranda, administrationmate r ia l s , a t t o rney-c l i en tcorrespondence, and electronicversions of both client material andattorney work product.

After completion of thematter, the Firm will notify client ofthe existence of client materialsthat remain in the Firm’spossession. Client has anaffirmative duty to retrieve thoseclient materials or to direct theFirm to forward the client materialsat Client’s expense. If Client failsto retrieve the materials or requestthe Firm to forward them, thisfailure shall be regarded asClient’s authorization for the Firmto destroy the client materialswithout further notice to Client.

VII. WHY CAN’T WE HAVE BRIGHT LINERULES LIKE THE DOCTORS?

The rules for the custodianship, transfer,and disposal of medical records are cited in Title22, Part 9, Chapter 165 of the TexasAdministrative Code.

Rule Section 165.1(a) defines in greatdetail the content of “adequate medical record”.

Pursuant to Rule Section 165.1(b), Texasphysicians are required to maintain a patient’srecords for at least 7 years from the last date oftreatment, or in the case of a patient youngerthan 18 years old, until the patient is 21 years oldor 7 years from the last treatment, whichever islonger.

VIII. CONCLUSION.

The current system is based largely on animpractical idealism that might have worked inanother era. Lawyers simply cannot beexpected to maintain clients files into perpetuity. They and their families need guidance as to howlong and what portion of the client files must bekept.

Texas should adopt the end product rule. The lawyer should return original documents andother documents needed by the client andshould provide information of special interest tothe client that may not be readily availablethrough another source. Everything else shouldbelong to the lawyer.

The client should have access to the fileto determine if the client desires other items. Once the client has had this opportunity, thelawyer should be free to dispose of theremainder of the file at any time and without anyfurther notice.

23

SELECTED ISSUES IN RETAINING ORIGINAL WILLSAPPENDIX G

I. WHY WOULD A LAWYER HOLD ACLIENT’S WILL FOR SAFEKEEPING?

Although more altruistic reasons arefrequently given, the historical reason is to obtainan advantage in being hired to probate the will. Other reasons include:

1. Client does not have a safe placefor keeping the will.

2. Clients are pleased that someoneelse will be responsible for safekeeping theirwills.

3. Custom of the legal community. “Perhaps the custom varies geographically, butI am not personally familiar with any firm in theNew York area that does not routinely hold clientwills.” (Comment by New York City ACTECFellow.)

4. Avoiding inadvertent revocation byclient who tries to save legal fees by makingchanges to the original will.

5. Avoiding presumption of revocationwhen a will, last in the possession of the client,cannot be produced.

6. Precluding unlawful destruction. Ifthe Lawyer has the will, an unlawful actor will beunable to destroy it, thereby gaining the upperhand.

II. THE LAWYER’S OBLIGATION.

The lawyer has an absolute obligation toreturn the will to the client even without anexpress agreement to do so and without specificauthorization, the lawyer may not deliver it to athird person or otherwise dispose of it.

So What? If client’s will is lost, damaged,destroyed, or misdelivered, the lawyer may beliable for damages.

III. SOME OF THE PROBLEMS

A. No Or Insufficient Bailment Agreement. At best, many lawyers merely write a letterstating that the client left the will with the lawyerand that the lawyer will deliver it when requestedby the client. It is an easy situation when theclient makes a personal request, but what if therequest comes from a spouse? A child? Aperson holding a power of attorney? A personshown in the client’s obituary as the client’s onlysurviving relative? What proof of authority doyou require?

“I do not want clients to think I’mattempting to tie them into probate. I do notwant to impose the responsibilities of bailmentupon myself, especially with regard to powers ofattorney.” (Comment by board certified Texaslawyer).

B. Proper Safekeeping. Many lawyers keepthe original will in the file that is stored with allthe other files. Some have separate fireprooffiles and even special rooms with “fire doors.” Others use safe deposit boxes at their bank.

Query. How do we define “safekeeping”in light of Tropical Storm Allison that flooded safedeposit boxes located in a Houston bank’sbasement and the Fort Worth tornado that blewpapers all the way to Dallas?

C. Continuing Representation. By retainingthe client’s will, the lawyer may owe a continuingduty to the client and the client would have abasis for contending that the engagement neverconcluded and therefore, the statute oflimitations never began to run.

D. Firm Splits Or Dissolves Or the DraftingLawyer Dies. If the drafting lawyer dies, theresponsibility for safekeeping the will passes tothe survivors (partners, associates, staff, orfamily), some or all of whom may not want or be

24

willing to accept that responsibility or may noteven be lawyers.

Query. What about confidentiality issueswhen there is no lawyer involved?

If the testators were clients of the firm ofAble, Best, and Capable and that firm dissolveswith the lawyers going their own ways, thereoften are wills that were not prepared by any ofthe current lawyers. This is another problem.

E. Trying To Return The Wills. The lawyeror firm that decides to get out of the safekeepingbusiness will find it difficult. As one ACTEClawyer wrote “The process of returningdocuments is an expensive one because it istime intensive.”

If the lawyer or firm has encouragedsafekeeping of clients’ wills, then after a periodof ten or more years, there will be wills for clientswho no longer can be located.

There are a number of good internet sitesfor trying to locate people. These includewww.accurint.com, www,switchboard.com, andwww.worldpages.com.

F. Who Owns The Files? It seems clear thatin Texas, if the client doesn’t own all contents ofthe file, the courts will take that position anyway. The lawyer is generally entitled to make andretain copies.

Query. If the client can not be found,does this obligate the lawyer to retain an originalwill for an indefinite time?

G. Depositing the Wills With County Clerk. Texas has a statutory procedure for depositing awill with the county clerk of the testator’sresidence. Probate Code, Section 71. The feecurrently is $5.00 per will. Many lawyers believethis provides the answer when the client cannotbe located.

Although Section 71(a) permits thetestator or someone acting for the testator todeposit the will, the clerk may require proof ofthe testator’s identity and residence and Section71(b) requires the will to be in a sealed wrapperendorsed “Will of,” followed by the name,address, and signature of the testator and with

the name and current address of each personwho shall be notified of the deposit of the willafter the death of the testator. The full text ofSection 71 appears at Attachment I.

Query. If testator cannot be located or didnot sign the envelope, etc., can this provision bethe salvation?

Query. If even this procedure does notapply, what must the lawyer do with the originalwill?

IV. THE BIGGEST PROBLEM.

A. A Continuing Relationship? From aclient’s point of view, the lawyer who holds theoriginal will is that client’s lawyer – at least for awhile. The big question is what is “a while?”.

B. Trying To Start Limitations To Run. Thelawyer may think that the lawyer-clientrelationship terminated when the will was signedand the fee was collected. Perhaps the lawyereven sent a “termination” letter to the client. But,if the lawyer holds the client’s will, has therebeen a real termination that would be enough forthe statute of limitations to commence?

C. An Ongoing Duty? A lawyer who retainsan original will may have an affirmative duty toadvise the client of changes in the law that couldaffect the client’s estate plan. A 1969 Californiacase held that the lawyer had a continuing dutyto a client whose will the lawyer had draftedwhere the attorney-client relationship continued. Heyer v. Flay. 499 P 2d 161. This duty is notunlimited and the lawyer is not a guarantor forthe client’s failure to act on the lawyer’s advice.

The issue of a continuing duty to ourestate planning clients is a troublesome grayarea. It appears that the answer turns onwhether or not the client is a “present” client or a“former” client and in all likelihood, that will bedecided on whether the client has reasonableexpectations that the lawyer will advise the clientof future developments. Note here theimportance of having something in writing thatdelineates the lawyer’s responsibility or lackthereof for such future advice and services.

25

Query. If there is such a duty to advise ofchanges, can that duty be satisfied by sending ageneral summary of changes in the law?

Query. Would there be a greater duty toinform the client of major tax law changes suchas the unlimited marital deduction, or the so-called repeal of the estate tax, or the increase ofthe tax free amount of the exemption equivalent?

Query. Would there be a duty for thelawyer to examine all of the original wills beingheld to determine if a new law actually affectedthe plan of each client? If so, how could thelawyer then know about the client’s particularcircumstances?

D. The Effect of the Passage of Time. Signing the documents might end the activephase, but it does not end the lawyer-clientrelationship since the lawyer remains bound bythe duty of confidentiality. With many clients, nofurther legal services will be provided. In thatinstance, the lawyer-client relationship couldexpire after the passage of an extended periodof time. This dormant or inactive phase is of anindeterminate duration and the retention of theoriginal documents suggests that the lawyer-client relationship is continuing.

E. Another Ethical Issue. While retainingoriginal documents may be useful to the client,there are those who believe that it isinappropriate, if not unethical, for the lawyer todo so because of the “advantage” it gives to thelawyer custodian when it is time to select alawyer to handle the probate.

F. Conflicts Of Interest. Still another issue isthat as a result of a lawyer holding the client’soriginal will, that lawyer or that lawyer’s firmcould be disqualified from representing current orprospective clients whose interests may beadverse to the client. At least one law firm’sagreement to retain the will is conditioned thatthe firm would not be so disqualified. A furthercondition is that the firm is not charged withinforming the client or any other person namedin the will of any change in tax, probate, trust, orother applicable laws.

G. Risk Management. Estate planning andproper drafting is a highly complex area requiringfar greater care due to constantly changing taxlaws, the nature and mobility of clients, andvarious ethical rules.

1. No longer can lawyers realisticallyview will writing and estate planning as a lossleader. Present economics of law practice nolonger permit a lawyer to wait twenty years orlonger to attempt to recoup estate planning feesfrom the client’s estate.

2. Although computers are standardhelpers in the production of documents, they areof equal use of management of files, capturinginformation about the clients and detailsconcerning their estate planning documents, andin providing a reliable reminder system.

H. Completion Letter. Once an estate planis implemented, the lawyer should considersending the client a “completion letter”. Thisletter could caution the client regarding the effectof changing title to assets or beneficiarydesignations or reminding the client to review theplan on a regular basis. Sample languagefollows:

“We have now completedthe active phase of our estateplanning work for you and havedelivered the originals to you. It isyour responsibility to safeguardthese signed originals. A safedeposit box is a reasonable placeto store and safeguard youroriginal documents.

“Please do not write on theoriginals. This could invalidateyour will. We suggest that youcontact us if you want to make anychanges to ensure that thosechanges are made legally.

“Our fee for the preparationand supervision of the signing ofthe documents and the relatedadvice does not include a

26

continuing responsibility by us toensure that the documentscontinue to comply with changes inthe law as they occur. Frequentlythese changes are of importanceto only a few of our clients and,since individual circumstances areso unique, it is not possible tocontact each of our clients to alertthem to changes that could thenaffect them personally. Becauseof this difficulty, we are not in aposition to undertake an obligationto so notify any of our clients.

“We do recommend thatyou review your wills and yourbasic estate plan at least everyyear or so to ensure that theycontinue to meet your needs. Some events that would cause youto review your plan at a differentinterval include deaths ofbeneficiaries or executors;divorces; mental and physicaldisabilities of a beneficiary orexecutor; disaffection with anyonenamed in your will; a financialdisaster affecting the size of yourestate or the size of proposed giftsthat you would otherwise make; oron the bright side, a windfall suchas a large inheritance or winningthe lottery. Finally, should you feeluneasy about any aspect of yourplan, you should come back for areview. ”

V. HANDLING REQUESTS FOR DELIVERYOF ORIGINAL WILL AND OTHERDOCUMENTS

A. Request By Testator. This is the easyone. Deliver in the manner requested. Ifpersonal delivery, get a written receipt. Ifrequest was by mail, the testator’s letter shouldbe sufficient in most cases.

B. Request By Someone Else. Here thedecision becomes more complicated unless yoursafekeeping agreement provides for delivery toa third party. Absent the “appropriate language”in your agreement, there is no totally safeprocedure other than to refuse to answer anyinquiry. That refusal could ensure that you arethe former lawyer for the family.

If you do choose to respond, there is noright answer but your response could lead to agrievance, a malpractice claim, or a suit fordamages.

For purposes of the following questions,assume that you prepared wills for both husbandand wife and both are alive.

Query. If one spouse requests delivery ofwills for both husband and wife, should you (a)comply with the request, (b) deliver only the willof the requesting spouse pending “proper”authorization from the other spouse, or (c) dosomething else?

Query. If an adult child requests deliveryof the will of either or both parents, should you(a) comply with the request if you know the child,(b) comply with the request even if you do notknow the child, (c) require “proper” authorizationfrom the parents(s), or (d) do something else?

Query. If the request comes fromsomeone acting as an agent under a statutorydurable power of attorney, should you (a) complywith the request only if you know the agent, (b)comply with the request even if you do not knowthe agent, (c) require verification from thetestator(s), (d) refuse to deliver the will(s), or (e)do something else?

VI. HANDLING THIRD PARTY REQUESTSFOR INFORMATION

If you receive a request as to whether youprepared a will for a particular client, you arefaced with a dilemma. Probably the only “safe”answer is to refuse to answer withoutauthorization from the client, but consider thefollowing:

Query. If the inquiring person is a spouseor an adult child, will you (a) state whether or notyou prepared a will, (b) refuse to answer even if

27

you have represented that family member, (c)refuse to answer if you know the identity of buthave not represented that family member, (d)refuse to answer regardless of the identity andrelationship of the family member?

Query. If the inquiring person is anotherlawyer, will you (a) state whether or not youprepared the will, or (b) refuse to answer?

Query. If the inquiring person is neither afamily member or another lawyer, will you (a)state whether or note you prepare the will, or (b)refuse to answer?

Query. If you learn or already know of thetestator’s death, will your response be different?

VII. WHAT TO DO WITH THE ORIGINALWILL WHEN YOU LEARN OF TESTATOR’SDEATH

A. The Rubber Hits The Road. Presumablyone reason for holding the original will was theexpectation (anticipation?) (hope?) that youwould be hired to probate the will and “handlethe estate.”

B. The Testator Has Died. Now What? When you learn about Testator’s death, which ofthe following do you do?

1. Wait to be contacted and hope tobe hired? If so, how long do you wait?

2. Write or call a member of thefamily to advise that you are holding the will forsafekeeping? If so, will you deliver the originalwill to that person?

3. Write or call the first namedexecutor to advise that you are holding the willfor safekeeping? If so, will you deliver theoriginal will to that person?

4. Deliver the original will to thecounty clerk as contemplated by Probate CodeSection 71?

VIII. CONCLUSION.Winston Churchill had the answer. In his

famous commencement speech dealing withperseverance, Churchill is quoted as saying“Never give up. Never give up. Never. Never.Never . . . .” That is advice worth heeding whenit comes to retaining a client’s original will. Neverretain. Never retain. Never. Never. Never . . .

28

29

30

31

32

33

34

35

CLOSING A LAW PRACTICEAPPENDIX I

I. OVERVIEW

A. Potential Effect. According to a 1995report of the American Bar Foundation, almost47% of all lawyers in private practice were solopractitioners. In April 2007, approximately 28%of Texas lawyers in private practice were solos.

B. Potential Conflicts. In the nature of lawpractice, conflicting responsibilities areencountered. Virtually all difficult ethicalproblems arise from apparent conflict between alawyer’s responsibilities to clients, to the legalsystem, and to the lawyer’s own interests. Section 7, Preamble to Texas Rules ofProfessional Conduct (Article 10, §9 of the StateBar Rules).

C. Delicate Balance. As will be seen, someof the Texas Disciplinary Rules of ProfessionalConduct (“DR”) tend to complicate thingsinvolving clients, leave many open issues for thelawyer’s family, and raise serious potentialproblems for attorneys who are involved inwinding down or trying to dispose of theirpractices.

II. COMMUNICATING WITH YOUR OWNCLIENTS

Once you have established an attorney clientrelationship, open communication with the clientby a lawyer is not only authorized, it is activelyencouraged.

1. There is no prohibition against alawyer recommending another lawyer to a clientor referring a client to another lawyer.

2. There are many restrictions onnon-affiliated lawyers who want to “take over”your practice or selected matters. These includebarratry [a penal code violation in addition tobeing a violation of DR 8.04 (a)(9)], certain in-person or telephone contacts [DR 7.03(a)],certain written “solicitations” [DR 7.05(a)], andcompliance with the advertising rules [DR 7.04and 7.05].

III. HANDLING CLIENT MATTERS.

A. New Or Prospective Matters. If you areattempting to close your practice, do not acceptnew work no matter how interesting or lucrative.

B. Incomplete Matters. Review these filesand do the work necessary to conclude therepresentation. If that is not practical, arrangefor a referral to another lawyer.

1. When Client Desires Referral To Other Counsel.

a. Is there a duty torecommend a lawyer?

b. Should more than one berecommended?

c. What about recommendingthe bar association referral service?

d. Is there liability for negligentreferral?

2. When Client Has Obtained NewCounsel.

a. Obtain written authorizationfrom client to deliver files to a new counsel.

b. Consider making copies oforiginal documents returned to clients.

c. Arrange for substitution ofcounsel in litigated matters and be sure of filingand approval.

d. Deliver files and obtainreceipt for each.

C. Withdraw As Attorney Of Record. Ifmatters are to be taken over by other lawyers, besure that you withdraw as attorney of record andthat the client consents for the other lawyerbeing substituted in your place.

D. Review Client Files. Ensure that you haveprovided all agreed services. Provide clientswith all original documents and the opportunity toreview and copy the contents of their files. Butsee Section V. Record Retention or Whose FileIs It Anyway?

E. Review Calendar and To Do Lists. Besure to note pending actions, some of which mayimpact the timing of closing your office, and all ofwhich may relate to services that must beperformed for the clients.

36

F. Send Final Bills. The value of unbilledtime and expenses will deteriorate even morerapidly if you wait to bill until you no longer havean office.

G. Return Unearned Fees And Deposits. Pay earned fees and accrued expenses asauthorized from client deposits and return theunearned and unused deposits to clients.

H. Withdraw as Registered Agent. If you arethe registered agent and/or your office is theregistered address for a business, arrange forsubstitution and prepare and sign appropriatedocuments.

V. EMPLOYEE RELATIONS.

A. Inform Employees And Keep ThemInformed. Your employees “know” thatsomething is going on. Give them straight factsso that you do not prematurely lose the one(s)who have “shut down skills” who you need untilthe lights go off and so that others can have anopportunity to seek other employment.

B. Calculate And Arrange To Pay AccruedBenefits. Examples include unused vacationand sick leave allowances, cafeteria plans,severance pay, bonuses, contributions toretirement plans, COBRA.

VI. FURNITURE, FIXTURES, LIBRARY,EQUIPMENT.

A. Take Inventory. List what you haveincluding model numbers and software (includingthe version).

B. Software Licenses. Determine if they aretransferrable. Remember: There are specialproblems with deleting hard drives.

C. Consider Getting Appraisals.

D. Determine What Is Leased And What IsOwned. If leased, what can be done to returnthe item or to buy out the lease?

E. Law Books. The reality is that they havelittle, if any, market value and most of the lawschools have what you have.

F. Sell, Donate, Or Take Home. Cancelsubscriptions to supplements, updates, newvolumes, etc. and to newsletters and magazines. Decide what to do with what you have.

G. Telephone Service.1. Cancel Yellow Page advertising.2. Get and maintain forwarding

number.3. Change greeting on incoming calls.

VI. PREMISES.

A. Terminate, Assign, Sublease. Reviewoffice lease to determine rights, responsibilities,expiration date, notification requirements, andrights to assign or sublease.

B. Separately Metered Utilities. Arrange toterminate service and obtain refund of deposits.

C. Security System. Arrange to terminateservice.

VII. INSURANCE.

A. Notify Agents, Brokers, and Carriers.

B. Terminate Coverages.1. Premises liability2. Tenant policies3. Group health coverages (N.B.

Possible COBRA coverage issues). 4. Workers Compensation

C. Professional Liability. Notify themalpractice carrier to obtain extendedendorsement (commonly known as “tail policy”). This is not a new malpractice policy it simplyextends the time to report a claim under theexisting policy with its existing restrictions, limits,and deductibles. The tail policy should coverapplicable statutes of limitations that are typicallytwo years.

37

VIII. FINANCIAL.

A. Send Final Bills.

B. Collect Outstanding Receivables.

C. Obtain Refunds For Deposits And PrepaidItems.

D. Pay Outstanding Bills And CloseAccounts.

E. Cancel Business Credit Cards.

F. Safe Deposit Boxes. Remove andproperly dispose of client documents. Considerclosing box.

G. Change Signature Authority At Banks.

H. Trust Accounts.1. Return deposits and unearned fees

to clients.2. Clients who cannot be located.

a.. IOLTAb. Escheat

3. Retain records for at least fiveyears. DR 1.14.

I. Update Books of Account.

J. Operating Account. Keep this accountopen for future receipts and expenditures.

IX. TAXES AND OTHER GOVERNMENTALTASKS.

A. Prepare and File Final Forms.1. Form W-2 for employees2. Form 1099 to appropriate payees3. Form 9414. Federal unemployment5. Texas unemployment

X. NOTIFICATION.

A. Comply With Rule 13.01 of the Rules ofDisciplinary Procedure.

B. Specific Notifications.1. Clients

2. Opposing Counsel3. Employees4. Suppliers and vendors5. Professional advisors6. Internal Revenue Service (Form

8822 For Change of Address).7. Building management8. Adjoining offices9. Bar Associations and other

member organizations

C. Post Office.1. File change of address with post

office. It is possible to do this on-line for fee of$1.00.

2. Close post office box.

D. Automatic Response On Email.

E. Post Notices On Website.

38

APPENDIX J

ABA MODEL RULE 1.17American Bar Association Rules of Professional Conduct

SALE OF LAW PRACTICE

A lawyer or a law firm may sell orpurchase a law practice, including good will, ifthe following conditions are satisfied:

I. The seller ceases to engage in theprivate practice of law [in the geographic area][in the jurisdiction] (a jurisdiction may elect eitherversion) in which the practice has beenconducted;

(a) The practice is sold as an entirety toanother lawyer or law firm;

(b) Actual written notice is given to eachof the seller’s clients regarding:

(1) the proposed sale; (2) the terms of any proposed

change in the fee arrangement authorized byparagraph (d);

(3) the client’s right to retain othercounsel or to take possession of the file; and

(4) the fact that the client’s consentto the sale will be presumed if the client does nottake any action or does not otherwise objectwithin ninety (90) days of receipt of the notice.

If a client cannot be given notice, therepresentation of that client may be transferredto the purchaser only upon entry of an order soauthorizing by a court having jurisdiction. Theseller may disclose to the court in camerainformation relating to the representation only tothe extent necessary to obtain an orderauthorizing the transfer of a file.

(c) The fees charged clients shall not beincreased by reason of the sale. The purchasermay, however, refuse to undertake therepresentation unless the client consents to paythe purchaser fees at a rate not exceeding thefees charged by the purchaser for renderingsubstantially similar services prior to the initiationof the purchase negotiations.

COMMENT

The practice of law is a profession, notmerely a business. Clients are not commoditiesthat can be purchased and sold at will. Pursuant

to this Rule, when a lawyer or an entire firmceases to practice and another lawyer or firmtakes over the representation, the selling lawyeror firm may obtain compensation for thereasonable value of the practice as maywithdrawing partners of law firms. See Rules 5.4and 5.6.

TERMINATION OF PRACTICE BY THESELLER

The requirement that all of the privatepractice be sold is satisfied if the seller in goodfaith makes the entire practice available for saleto the purchaser. The fact that a number of theseller’s clients decide not to be represented bythe purchaser but take their matters elsewhere,therefore, does not result in a violation. Neitherdoes a return to private practice as a result of anunanticipated change in circumstances result ina violation. For example, a lawyer who has soldthe practice to accept an appointment to judicialoffice does not violate the requirement that thesale be attendant to cessation of practice if thelawyer later resumes private practice upon beingdefeated in a contested or a retention electionfor the office.

The requirement that the seller cease toengage in the private practice of law does notprohibit employment as a lawyer on the staff ofa public agency or a legal services entity whichprovides legal services to the poor, or as in-house counsel to a business.

The Rule permits a sale attendant uponretirement from the private practice of law withinthe jurisdiction. Its provisions, therefore,accommodate the lawyer who sells the practiceupon the occasion of moving to another state. Some states are so large that a move from onelocale therein to another is tantamount to leavingthe jurisdiction in which the lawyer has engagedin the practice of law. To also accommodatelawyers so situated, states may permit the saleof the practice when the lawyer leaves thegeographic area rather than the jurisdiction. Thealternative desired should be indicated by

39

selecting one of the two provided for in Rule1.17(a).

SINGLE PURCHASER

The Rule requires a single purchaser. The prohibition against piecemeal sale of apractice protects those clients whose matters areless lucrative and who might find it difficult tosecure other counsel if a sale could be limited tosubstantial fee-generating matters. Thepurchaser is required to undertake all clientmatters in the practice, subject to client consent. If, however, the purchaser is unable to undertakeall client matters because of a conflict of interestin a specific matter respecting which thepurchaser is not permitted by Rule 1.7 or anotherrule to represent the client, the requirement thatthere is a single purchaser is neverthelesssatisfied.

CLIENT CONFIDENCES, CONSENT ANDNOTICE

Negotiations between seller andprospective purchaser prior to disclosure ofinformation relating to a specific representationof an identifiable client no more violate theconfidentiality provisions of Model Rule 1.6 thando preliminary discussions concerning thepossible association of another lawyer ormergers between firms, with respect to whichclient consent is not required. Providing thepurchaser access to client-specific informationrelating to the representation and to the file,however, requires client consent. The Ruleprovides that before such information can bedisclosed by the seller to the purchaser the clientmust be given actual written notice of thecontemplated sale, including the identity of thepurchaser and any proposed change in theterms of future representation, and must be toldthat the decision to consent or make otherarrangements must be made within 90 days. Ifnothing is heard from the client within that time,consent to the sale is presumed.

A lawyer or law firm ceasing to practicecannot be required to remain in practice becausesome clients cannot be given actual notice of theproposed purchase. Since these clients cannotthemselves consent to the purchase or direct

any other disposition of their files, the Rulerequires an order from a court having jurisdictionauthorizing their transfer or other disposition. The Court can be expected to determinewhether reasonable efforts to locate the clienthave been exhausted, and whether the absentclient’s legitimate interests will be served byauthorizing the transfer of the file so that thepurchaser may continue the representation. Preservation of client confidence requires thatthe petition for a court order be considered incamera. (A procedure by which such an ordercan be obtained needs to be established injurisdiction in which it presently does not exist.)

All elements of client autonomy, includingthe client’s absolute right to discharge a lawyerand transfer the representation to another,survive the sale of the practice.

FEE ARRANGEMENT BETWEEN CLIENT ANDPURCHASER

The sale may be financed by increases infees charged the clients of the practice. Existingagreements between the seller and the client asto fees and the scope of the work must behonored by the purchaser, unless the clientconsents after consultation. The purchaser may,however, advise the client that the purchaser willnot undertake the representation unless theclient consents to pay the higher fees thepurchaser usually charges. To prevent clientfinancing of the sale, the higher fee thepurchaser may charge must not exceed the feescharged by the purchaser for substantiallysimilar service rendered prior to the initiation ofthe purchase negotiations.

The purchaser may not intentionallyfragment the practice which is the subject of thesale by charging significantly different fees insubstantially similar matters. Doing so wouldmake it possible for the purchaser to avoid theobligation to take over the entire practice bycharging arbitrarily higher fees for less lucrativematters, thereby increasing the likelihood thatthose clients would not consent to the newrepresentation.

OTHER APPLICABLE ETHICAL STANDARDS

Lawyers participating in the sale of a law

40

practice are subject to the ethical standardsapplicable to involving another lawyer in therepresentation of a client. These include, forexample, the seller’s obligation to exercisecompetence in identifying a purchaser qualifiedto assume the practice and the purchaser’sobligation to undertake the representationcompetently (see Rule 1.1); the obligation toavoid disqualifying conflicts, and to secure clientconsent after consultation for those conflictswhich can be agreed to (see Rule 1.7); and theobligation to protect information relating to therepresentation (see Rules 1.6 and 1.9).

If approval of the substitution of thepurchasing attorney for the selling attorney isrequired by the rules of any tribunal in which amatter is pending, such approval must beobtained before the matter can be included inthe sale (see Rule 1.16).

APPLICABILITY OF THE RULE

This Rule applies to the sale of lawpractice by representatives of a deceased,disabled or disappeared lawyer. Thus, the sellermay be represented by a nonlawyerrepresentative not subject to these Rules. Since,however, no lawyer may participate in a sale ofa law practice which does not conform to therequirements of this Rule, the representatives ofthe seller as well as the purchasing lawyer canbe expected to see to it that they are met.

Admission to or retirement from a lawpartnership or professional association,retirement plans and similar arrangement, and asale of tangible assets of a law practice do notconstitute a sale or purchase governed by thisRule.

This Rule does not apply to the transfersof legal representation between lawyers whensuch transfers are unrelated to the sale of thepractice.

MODEL CODE COMPARISON

There is no counterpart to this Rule in theModel Code.

LEGAL BACKGROUND

Rule 1.17 recognizes the potential

existence of and market for the good will of a lawpractice and establishes guidelines to protectclients when a law practice is sold.

Goodwill, long recognized in the sale ofother business assets, first gained officialrecognition and acceptance in the context of alaw practice in divorce proceedings. See, e.g.,Dugan v. Dugan, 92 N.J. 423, 457 A.2d 1(N.J.1983) (concluding that goodwill exists in a lawpractice, but cannot be sold because of theModel Code prohibition, thereby diminishing itsvalue; that payments to a retiring partnerrepresenting goodwill are acceptable under theCode; and that therefore good will can beequitably distributed as an intangible asset of themarital estate).

Rule 1.17 is similar to a California rulethat took effect in 1989. California Rules ofProfessional Conduct, Rule 2-300, West’s Ann.Cal. 23, Pt. 2, Rule 2-3000 (Supp. 1991)

INDIRECT METHODS OF TRANSFERRINGGOOD WILL

Unofficially, goodwill has been part of thebusiness of law for some time. Two commonmethods of transferring good will existed beforeRule 1.17.

One way coupled an inflated value for thephysical assets of a law practice with the seller’sagreement to refer clients to the purchaser. See, e.g., Geffen v. Moss, 125 Cal. Rptr. 687, 53Cal. App. 3d 215, 78 A.L.R.3d 1232 (1975)(sales contract terms, though not mentioninggood will, expressed seller’s intention toencourage clients to use buyer’s services in thefuture and called by payments to the seller inexcess of the stated value of the physical assets;the court invalidated contract terms for thosepayments).

The second method was the formation ofa “quickie” partnership from which one partnerwould soon retire and receive compensation,leaving the remaining partner with the clientbase. Some lawyers who attempted to usevariations of this method faced sanctions forviolations of related ethical considerations. Seee.g., In re Laubenheimer, 113 Wis. 2d 680, 3354N.W.2d 624 (1983) (a supposed employer-employee contract providing for the transfer offiles without prior client notification held to be a

41

breach of some duty of confidentiality).Some commentators questioned whether

a proscription against the sale of goodwillsurvived the adoption of the Model Rules. SeeKalish, The Sale of a Law Practice: The ModelRules of Professional Conduct Point in a NewDirection, 39 U. Miami L. Rev. 471(1985)(arguing that although judicial decisionsindicated such a proscription existed, cases wereinfrequent and unless a problem arose betweenthe seller and purchaser, there was no greatconcern about the use of one of the indirectmethods described above). But see also G.C.Hazard, Jr., & W.W. Hodes, The Law ofLawyering 1:17:102 at 489 (2d ed. 1990)identifying a “rule of tradition”) against the sale oflaw practice on the basis of the “public interest”and the fact that law is a profession that dealswith people, not merchandise).

Passage of Rule 1.17 removed any doubt,negated the need for the indirect methods, andhelped to ensure that procedures to protectclients would be created and followed.

HISTORICAL JUSTIFICATIONS FORPROHIBITING SALE OF GOODWILL

EC 4-6 of the ABA Model Code ofProfessional Responsibility stated that “a lawyershould not attempt to sell a law practice as agoing business because, among other reasons,to do so would involve the disclosure ofconfidences and secrets.” However, nodisciplinary rule directly addressed this issue.

Further justification for the prohibition wasfound in DR 2-108, stating “a lawyer shall not beparty to or participate in a partnership oremployment agreement with another lawyer thatrestricts the right of a lawyer to practice law afterthe termination of a relationship created by theagreement, except as a condition to payment ofretirement benefits.”

The underlying public pol icyconsiderations for the prohibition found in DR 3-102(A) against sharing fees with nonlawyershave also been used as a basis for striking downattempted sale of good will of deceased lawyers. See, e.g., O’Hara v. Ahlgren, Blumenfeld &Kempster, 158 Ill. App. 3d 562, 511 N.E.2d 879,aff’d, 127 Ill.2d 333, 537 N.E.2d 730 (1989).

RELATED ETHICAL OBLIGATIONS

The seller of a law practice must complywith Rule 1.6 by not revealing any clientconfidences when discussing the practice withthe prospective purchaser.

With the adoption of Rule 1.17, Rule5.4(a)(2) was amended to allow the purchaser ofa law practice to pay a deceased lawyer’s estatean amount that does not necessarily representthe same proportion to the total fees as that ofthe services rendered, thereby allowing for theconcept of good will.

Rule 7.2(c) was also amended to allowpayment to the seller of a law practice in returnfor client referrals to the practice purchaser.

The Comment to Rule 5.6 was expandedto make it clear that right-to-practice restrictionsare permissible when a practice is sold.

The seller must act competently inaccordance with Rule 1.1 in selecting a qualifiedpurchaser.

Though Rule 7.3 was not amended, it isimplicit that clients who are notified pursuant toRule 1.17(c) and do not object or take any actionare not “prospective clients” within the context ofRule 7.3, and that the law practice purchaserwho contacts these clients is not engaged inprohibited solicitation.

BASIS OF REGULATION

Two justifications were initially advancedfor permitting a lawyer to sell a law practice thatincluded good will.

• Client Protection: The first justificationwas client protection. See Report to the ABAHouse of Delegates No. 8A, at 204 (1990Midyear Meeting). Some commentatorssuggested a disparity existed between thetreatment afforded clients of retiring solepractitioners and that afforded clients of lawfirms when the individual attorney handling theclient matter leaves the firm. The new rulereflects solicitude for the clients of a retiring solepractitioner.

Between the time that Rule 1.17 was firstproposed to the House of Delegates at the 1988Annual Meeting and its adoption at the 1990Midyear Meeting, the Rule was revised so that

42

not only individual lawyers but also law firmswere allowed to sell a law practice. If an entirefirm ceases to practice, its clients are left withoutrepresentation just as if they has beenrepresented by a single lawyer. Though neitherRule 1.17 nor its Comment specifically states it,the logical reading of the rule in this context isthat each individual member of the firm mustcease to engage in the private practice of law inthat jurisdiction or geographical area, not just thefirm as an entity. Under this reading, thejustification for the rule premised upon clientprotection would survive the change in wordingbefore passage.

• Sole Practitioners in Unfair FinancialPosition: Retiring members of law firms andestates of deceased lawyers have been able toreceive benefits including an allotment for thatlawyer’s share of the firm’s good will. Before thepassage of Rule 1.17, sole practitioners andtheir estates could not ethically obtain the samebenefit. The rule eliminated this inequality,although at least one commentator hadsuggested that valid reasons existed for treatingsole practitioners differently from partnerships.

See Sterrett, The Sale of a Law Practice, 121U.Pa.L. Rev. 306 (1972).

FURTHER SUGGESTIONS

It has been suggested that the sale of alaw practice by an estate be treated differentlyfrom the sale by a lawyer leaving privatepractice. See Minkus, The Sale of a LawPractice: Toward a Professionally ResponsibleApproach, 12 Golden Gate U. L. Rev. 353(1982) (suggesting that estate representativemay have a duty to obtain the best price for thepractice regardless of the quality of thesuccessor counsel, thereby creating a potentialconflict with the duty of competence under Rule1.1).

It has also been suggested that thepurchase price for the law practice should not bein the form of a lump sum. See Minkus, supra(reasoning that if the sale is based upon apercentage of fees, the seller will be encouragedto find a purchaser who will do the quality ofwork that will result in the retention of theclients).#

43

APPENDIX KACKNOWLEDGMENTS

Resources relating to the death of a solo practitioner and to the sale of a law practice are limited but havebeen drawn upon unashamedly. They include the following:

“Retirement of A Solo Practitioner’s Law Practice” by Thomas G. Bousquet, Houston, Texas, firstpublished in 29 Law Office Economics and Management 428 (1989) and updated in 33 The HoustonLawyer 37, January/February (1996)

“Preparing For Retirement, Disability And Death” by Wesley P. Hackett, Jr., Michigan Lawyer’s Manual,September 1994 Revision, Lawyers Cooperative Publishing.

Articles by Laura Gatland (“Sunsetting A Law practice”), Robert L. Ostertag (“Sale of A Law Practice”),James D. Cotterman (“Valuation of A Law Practice”), GP Solo Magazine January/February 2000,General Practice, Solo and Small Firm Section, American Bar Association.

“What Will Happen to Your Practice If You Die” by Leigh P. Perkins, Lawyers Weekly USA, November21, 1994.

“A Solo’s ‘Back-Up Lawyer’: How to Set Up a Relationship That Works” by Michael M. Bowden, LawyersWeekly USA, September 22, 1997.

“What Happens When A Lawyer Dies” by Stephen N. Maskaleris and Vivienne K. Cooperman,Experience Magazine, Summer 1997, Senior Lawyers Division, American Bar Association.

“Big Shoes To Fill: The Job of the Inventory Attorney” by J. R. Phelps and Terri Olson, The Florida BarJournal, January 1991.

“When I Die . . . “ by Ross A Sussman, Chapter 51, Flying Solo, Law Practice Management Section,American Bar Association.

“Why Shouldn’t Solos Be Able To Sell Their Practices” by Barry S. Martin and Frank Babb, American BarAssociation Journal, April 1984.

“Purchase or Sale of a Solo Practice” by Demetrios Dimitriou, Law Practice Management Magazine,November/December 1993, Law Practice Management Section, American Bar Association.

“A Death Shutters A Law Firm” by Mark Hansen, American Bar Journal, October 1994

“The Toolkit For Buying or Selling a Law Practice” by Ed Poll, 1995 LawBiz Publishing Company.

“Checklist for Closing Another Attorney’s Office”, “Death of a Sole Practitioner: Special Considerations”,“Checklist: Protecting Clients’ Interests in the Event of the Lawyer’s Death, Disability, Impairment, orIncapacity” by Barbara S. Fishleder reprinted in GP Solo Magazine, January/February 2000, GeneralPractice, Solo and Small Firm Section, American Bar Association.

“Planning Ahead: A guide to Protecting Your Clients’ Interests in the Event of your Disability or Death -A Handbook and Forms”, copyright 1999 by Barbara S. Fishleder, Oregon State Bar Professional LiabilityFund. NOTE: Certain materials adapted from that publication have been modified in this paper toconform with Texas practice but have been used with permission. All rights were reserved except that

44

permission is granted for law firms and sole practitioners to use and modify those documents in their ownpractices. Those documents may not be republished, sold, or used in any other form without the writtenconsent of the Oregon State Bar Professional Liability Fund.

The Legal Malpractice Self-Audit from Texas Lawyers’ Insurance Exchange by Jett Hanna and TLIE,1995

ABA Annual Meeting (1986) materials from General Practice Section Program: Preparing For AndDealing With The Consequences of the Death of a Sole Practitioner.

Rodney C. Koenig, Houston, Texas, provided a memorandum dealing in general with cessation ofpractice and in particular with the procedures in Texas Rules of Disciplinary Procedure 13.01, 13.02,13.03 and Texas Disciplinary Rules of Professional Conduct 1.14 (a).

Wesley P. Hackett, Jr., Saranac, Michigan, Steven N. Maskalaris, Morristown, New Jersey, and RobertL. Ostertag, Poughkeepsie, New York, were interviewed regarding the sale of a law practice.

Roy W. Moore, Houston, Texas, was interviewed regarding the valuation of a law practice in the contextof a divorce.

“Will Vaults - Profits Center Or Malpractice Trap?” by James E. Brill as part of the course materials forthe State Bar of Texas 27 Annual Advanced Estate Planning and Probate Court (2003).th

“File Documentation, Retention and Destruction” by James E. Brill as part of the course materials for theState Bar of Texas 18th Annual Advanced Drafting: Estate Planning and Probate Course (2007).

“Closing The Lawyer’s Practice: Your Own Or Someone Else’s” by James E. Brill, presentation toAmarillo Area Bar Association (2008).

“The Lawyer’s Guide To Buying, Selling, Merging, And Closing A Law Practice” American BarAssociation (2008).

ABA Annual Meeting (2009) materials from Senior Lawyers Division Program: An Ethical Approach ToThe Sale Or Purchase Of A Law Firm.

“Closing a Solo Practice: A Lawyer’s Exit To-Do List” by Sheila Blackford and Peter Roberts, LawPractice, May/June 2011, Law Practice Management Section, American Bar Association.

45