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LAW OFFICE MANAGEMENT

CLOSING A KENTUCKY

LAW OFFICE:

A GUIDE FOR

AFTER THE DEATH OF

A KENTUCKY SOLE

PRACTITIONER

By: Glenn David Denton,

Denton & Keuler, LLP

DISTINCTION BETWEEN THE ATTORNEY FORTHE ESTATE AND THE ATTORNEY CLOSING THELAW OFFICE

This guide draws a distinction between theattorney handling the estate of the de-ceased sole practitioner ( the “estate” at-torney ) and the attorney closing the law of-fice of the deceased sole practitioner ( the“closing” attorney ), although these tworoles may be filled by the same individual.In addition, this article proceeds from theassumption that the sole practitioner has noemployees who are licensed attorneys, nora spouse or heir who is a licensed attorney.Finally, the remainder of this guide pre-sumes the closing attorney to be an unre-lated, neutral, and disinterested third party,licensed to practice law in Kentucky, who ishired to close the law office.

BEGINNING

Before the closing attorney can take any ac-tion, he will have to be hired by the estateor someone with authorization from the es-tate to begin the work. Sole practitionershave been encouraged by both the Ameri-can Bar Association and Kentucky Bar Asso-ciation to have a plan already in place thatdesignates a closing attorney. Absent sucha plan, authorization becomes an importantissue, and it will not wait for even a coupleof weeks. Once authorization is obtained,work may commence. The most valuableassets that should be identified first are theemployees of the sole practitioner. The le-gal secretary will have invaluable institution-al knowledge and an understanding of theinner workings of the office and the clients.

A paralegal will have the same. The closingattorney is best served by immediately re-taining the services of these invaluable em-ployees as quickly as possible. At the sametime, the employees should be informed ofthe short-term duration of their retentionand instructed to plan for the eventual lastday of work at the office.

Before beginning work in earnest, the clos-ing attorney should read the following tworesources:

ABA Commission on Ethics and Profession-al Responsibility, Formal Opinion 92-369-Disposition of Deceased Sole Practitioner’sClient Files and Property (1992); and

Kentucky Bar Association Ethics Opinion-405.

Both of these opinions provide excellentguidance regarding issues that the closingattorney will likely face. The closing attor-ney should also review the following Ken-tucky Supreme Court Rules. While broaderin scope, they too provide guidance andcontext for the work that lies ahead.

1. SCR 3.130(1.1) Competence;

2. SCR 3.130(1.3) Diligence;

3. SCR 3.130(1.4) Communication;

4. SCR 3.130(1.15) Safekeeping Property;

5. SCR 3.130(1.16) Declining or Terminating Representation;

6. SCR 3.130(1.17) Sale of Law Practice;

7. SCR 3.130(1.18) Duties to Prospective Client;

8. SCR 3.395 Appointment of Special Commissioner to Protect Clients’ Interests;

9. SCR 3.820 Client’s Security Fund; and

10. SCR 3.830 Kentucky’s IOLTA Fund.

KEY DECISION

Under Kentucky law, it is now possible tosell a law practice. The closing attorneyshould consult SCR 3.130-1.17. Early on, adecision must be made by the estate as towhether the practice has value and whethera sale of the practice is feasible. An unex-pected death complicates this decision.Nevertheless, this represents a significantfork in the road. One path leads to preserv-ing the practice and selling it. The otherpath leads to closing the practice.

GOALS

The closing attorney must acknowledge anassignment with multiple goals. First, theclosing attorney’s role is to assist the estate.Second, the closing attorney must protectthe estate from any and all manner ofclaims, including but not limited to, legalmalpractice claims. Third, the closing attor-ney will review client files and determinewhich need immediate attention in order toprotect the clients’ interests. All the while,the closing attorney must remember thathe does not represent the clients of the de-ceased sole practitioner. As always, theclosing attorney should prepare a clear andconcise engagement letter with the clientwho hired him clearly defining the servicesto be rendered and the ethical considera-tions to be kept in mind.

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When a Kentucky sole practitioner dies suddenly, the inevitable question arises:

“What is going to happen to his law practice?” The purpose of this article is to

provide a primer to the attorney stepping in to protect the law practice of the

deceased sole practitioner and his clients. In the practice of law, time is of the

essence. Court dates, statutes of limitations, and document filing requirements

continue to roll forward without pause even in the event of an unforeseen death.

CHECK THE CALENDAR & TICKLER SYSTEM

The first thing to do is to examine the de-ceased attorney’s calendar to identify up-coming dates and deadlines. The closingattorney will then begin to triage clientmatters and tasks according to the priorityhe designates. After the calendar review iscomplete, the closing attorney should turnattention to any tickler system in place,which will provide additional dates anddeadlines and help to identify files thatneed to be reviewed immediately. Keep inmind that the hunt for statute of limitationsissues is ever present.

BEGINNING FILE REVIEWS

Beginning the review of a deceased attor-ney’s files is a daunting task. A conferenceroom with a large table, rather than the per-sonal office of the deceased attorney, ispreferable. Next, the closing attorney mustidentify the physical location of the files tobe reviewed. In an ideal world, all fileswould be found neatly organized in a filecabinet, but in the real world, files may befound in the file cabinet, the attorney’s of-fice, the conference room, the secretary’soffice, the paralegal’s office, the attorney’sbriefcase, the trunk of the attorney’s car,and possibly at the attorney’s personal resi-dence. Be sure to inquire about files thatwere previously closed, purged, destroyed,or lost. Wherever they may be, the filesshould be gathered and brought to a cen-tral location to be reviewed.

The closing attorney should then begin toidentify active versus inactive files. If thedeceased attorney did not maintain a com-puter system to provide a master list offiles, the closing attorney should create hisown master list (such as an Excel spread-sheet) to log in files that are reviewed andany actions that need to be taken.

It is crucial that the closing attorney under-stand the nature of the deceased attorney’spractice and develop categories. Civil cas-es, criminal cases, medical malpractice cas-es, domestic cases, and others must be re-viewed differently. Additionally, the closingattorney may need to seek outside assis-tance to review files that are beyond hiscomfort level. The closing attorney mustalso keep in mind the duty of confidentialityowed to the deceased attorney’s clients.The closing attorney is not practicing withinthe file, but rather only reviewing the file todetermine immediate needs and actionsthat must be taken.

THE TWO KEY DOCUMENTS TO CREATE

One of the primary duties that the closingattorney will perform is to notify clientsabout the deceased attorney’s untimelydeath. This notification will also place theclients on notice that the sole practitioner’srepresentation of them has come to anend. Develop a form template letter to besent to all clients providing them with notifi-cation and guidance. Use the deceased at-torney’s letterhead, if available.1 For lack ofa better term, this “end of representation”letter needs to emphasize that the solepractitioner had no partners or employeeswho will continue their legal representation.The letter should emphasize that the officecan no longer handle the client’s legal mat-ter. It should request instructions aboutsafekeeping the client’s property. It shouldrequest that the client make contact withthe office as soon as possible in order toobtain a copy of the file and emphasize theurgency of doing so.

A second document that will need to becreated is a “receipt of original file” form.As clients come in to retrieve their file, youwill want them to sign a receipt document-ing that they have received the file. The re-ceipt should include a basic description ofthe items received, such as pleadings, cor-respondence, legal research, evidence,and/or other items found in the file. Theclosing attorney should also considerwhether the receipt should contain an au-thorization to destroy the file at a later date.Keeping copies and a master list of these“end of representation” letters and “re-ceipt of original file” forms is an importantsystem to put in place early. Once a clienthas been notified, retrieved the file, andsigned a receipt, the closing attorney maymove on to another matter.

TRIAGE

With each passing day, new challenges willarise. Some of the things that the closingattorney may be doing are the following:

1. Contacting co-counsel or opposing counsel tostay or hold a matter in abeyance.

2. Contacting the secretary of a judge or courtclerk in order to stay or hold a matter inabeyance.

3. Corresponding with co-counsel or opposingcounsel to advise them of a matter that needs tobe addressed.

4. Drafting a notice to be filed in the record in-forming the court and all parties of the untimelydeath of the sole practitioner.

5. Holding teleconferences with clients regardingtheir legal issues, their file, and/or client funds.

6. Having teleconferences with insurance ad-justers, lien holders, and/or others with regardto specific matters within files.

7. Directing staff to send out updated or final billsfor services previously rendered by the practi-tioner.

8. Keeping a total of all costs incurred in closingthe law office.

With each passing day, the phone will con-tinue to ring and mail will continue to ar-rive. Remember that the telephone answer-ing machine can be a useful tool; record anew message and provide instructionsabout what clients should be doing. Addi-tionally, it is important to identify whetheror not the practitioner used e-mail. If so, ac-cess to the e-mail account may be needed.Of course, the closing attorney will have tobe sensitive to e-mails received that are ofa clearly personal nature.

PHOTOCOPYING

Early on, the closing attorney will have tomake various judgment calls in regard towhat files need to be photocopied. Doesthe file need to be photocopied in its en-tirety? Does only part of the file need to bephotocopied? Can you give the original ofthe file to the client and not photocopy it?While the safest answer is to photocopyeverything, such is not practical. Theamount of photocopying can be tremen-dous. The closing attorney may wish toconsider hiring one person to just makephotocopies. In other words, the closing at-torney must identify whether there are ade-quate resources to make copies of files,and if not, he will have to address this ne-cessity.

STATE BAR AND LOCAL BAR

One item that should not be overlooked isthat the closing attorney and/or the estateshould notify the Kentucky Bar Associationof the attorney’s passing. Local bar associa-tions should be notified. The closing attor-ney should also determine if the deceasedattorney was licensed in other states. It isbest not to rely upon word of mouth.

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LAW OFFICE MANAGEMENT

CLIENT FUNDS

One of the more difficult tasks the closingattorney will face is that of talking to the de-ceased attorney’s clients about money. Acommon question arises: “What happenedto the money I paid him?” Refunding mon-ey to clients is a matter that will have to behandled by the estate. In order to get mon-ey back, clients must file a claim against theestate. The closing attorney should directthem to the estate attorney with regard tothese matters. In the event that monies arenot available for whatever reason, the clos-ing attorney may direct clients to the Ken-tucky Bar Association Client Security Fund.The phone number and application tomake a claim with the Client Security Fundcan be found on the Kentucky Bar Associa-tion website. To learn more about the fund,the closing attorney may wish to consultSCR 3.820 and the KBA website.

REFERRALS

One of the more common questions fromclients will be: “Who is going to handle mycase?” The follow-up to this question typi-cally will be: “Are you going to handle mycase?” KBA Ethics Opinion 405 providesthat “clients may obtain other counsel oremploy the lawyer contacting them, subjectto any interest of the estate arising from anypreexisting contract.” This guidance, how-ever, is in reference to a lawyer formerlyemployed by the sole practitioner. As tothe closing attorney who is an unrelated,neutral, and disinterested third party, theopinion provides that the closing attorneyhas “no obligation to the clients or the es-tate of the responsible [deceased] attorneyto provide continuing professional servic-es.” Thus, the closing attorney must make adecision early on as to whether or not hewill take any cases he is reviewing. It isprobably best that the closing attorneydoes not in order to avoid situations or is-sues regarding solicitation or barratry.

This decision can lead to the client’s re-quest for a recommendation, which poses anew dilemma for the closing attorney, be-cause the issue of “negligent referral” rais-es its head. In an ideal world, the closing at-torney will make no recommendation or re-ferral and will simply end the conversationby telling the client that he needs to find anattorney as soon as possible. In the realworld, however, the closing attorney mayneed to develop a list of three to fournames of attorneys that could handle sucha matter competently. This will place theburden upon the client to find the attorney

of his choosing, but will not leave the clientcompletely in the dark.

In the event of an unforeseen death, it isnot uncommon for there to be an outpour-ing of goodwill towards the deceased attor-ney. Attorneys rise to the occasion and pro-vide the professional courtesy that each ofus would hope for. Colleagues and localpractitioners may offer to take cases on areduced fee or pro bono arrangement.Nevertheless, the closing attorney must ac-cept these gestures of goodwill cautiously.A client may not like the attorney who hasoffered free assistance, so the match doesnot work. Further, attorneys may receive afile and realize that it requires much morework than anticipated. This can lead to dis-cussions of a fee arrangement that theclient was not expecting, creating addition-al complications. If the closing attorneywanders into the quicksand of trying to playmatchmaker and negotiator of fee arrange-ments, he can potentially find himself withmore problems than he anticipated. This isnot to say that it cannot be done. It simplyshould be an endeavor that is entered intowith eyes wide open.

LEGAL MALPRACTICE INSURANCE

As soon as possible, the closing attorneyshould contact the deceased attorney’s le-gal malpractice insurance provider so thatlimits and terms of coverage can be identi-fied. The attorney for the estate or the clos-ing attorney should have a discussion withthe legal malpractice insurance carrier re-garding an extended reporting period thatmay be provided after an unforeseendeath. Remember that most legal malprac-tice policies are written on a “claims made”basis. A claim filed against the estate afterthe policy has expired can have a cata-strophic effect on the estate of the nowuninsured, deceased attorney. For this rea-son, a constructive and proactive dialogwith the attorney’s legal malpractice insur-ance carrier should occur very early in theprocess.

CLIENTS BEGIN TO PICK UP FILES

Shortly after clients learn of the attorney’sdeath, they will begin to come in to pick uptheir files. Ideally, the client comes in, picksup the file, signs the “receipt of originalfile” form and advises the closing attorneythat an appointment has been made withanother competent attorney who is goingto take over the matter. Sometimes, thenew attorney will make contact with the of-

fice and want to come in and sign a receiptfor the file. It is best to communicate withthe client to make sure that this is with per-mission and authorization. If the new attor-ney picking up the file will acknowledge onthe receipt that she is indeed taking overthe matter, this is wonderful. Beware of thenew attorneys who request to retrieve a filefor review, before deciding on representa-tion. Having an attorney return the file anddecide not to take the case does not helpand can hinder the closing attorney’s deal-ings with clients.

The closing attorney will have to makejudgment calls in regard to mailing files toclients that are located out of town.Theclosing attorney may also have to placefiles in the hands of a relative or other de-signee for the client that is imprisoned. Inall of these situations, the key to getting thefiles into the client’s hands is to follow up,follow up, and then follow up again.

COMPUTERS

The purpose of photocopying and retain-ing files is to protect the deceased attor-ney’s law practice and estate. In the eventof a legal malpractice claim, a copy of thefile is critical. We live in an electronic age,however, and much of the useful informa-tion that will need to be preserved may befound on computers. It is recommendedthat hard copies of the attorney’s calendarsand ticklers be printed out and retained.Further, the closing attorney may want tocontact a competent computer professionalabout backing up all electronic data and in-formation on an external hard drive. Re-member that the estate may very well wishto sell the computers for their value. Havingan external hard drive with all of the infor-mation that can be accessed later will bemost welcome in the event it is needed atsome point in the future.

A LOT OF WORK

The closing attorney who begins a projectsuch as this will wonder about how muchtime this assignment will take. Every situa-tion is different, and circumstances will vary.With that said, the closing attorney shouldanticipate that the assignment will last atleast one to six months, if not longer insome instances. The first 30 days will be in-tense. Closing someone else’s law practicewill divert almost all of the closing attor-ney’s time and attention from his own lawpractice. Entering into this engagementwithout carefully analyzing one’s own lawpractice is unwise.

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DISSOLUTION

Another item to be considered is the formof practice that the deceased attorneychose. Did he practice as a sole practitionerin his own name? Did he practice in theform of a PSC? The closing attorney and/orthe estate attorney should consider theproper way to dissolve the practice. For-mally dissolving a corporation can providecertain additional bars to claims that mayarise in the future.

BRINGING THINGS TO A CLOSE

At some point in time, the closing attorneymust begin to move things to a close. Filesthat have been reviewed should be storedin some sort of alphabetical or numericalorder. Failing to do so will make them hard-er to find later when needed. The closingattorney must consider where is best tostore all the files, taking into account thatthey contain confidential and personal in-formation. When the deceased attorney’sbuilding is sold or the lease runs out, thefiles must be moved and maintained else-where. The duty to maintain client files andproperty must be thoroughly considered.The closing attorney may be required torent a storage unit to separately maintainand secure the files until they can be de-stroyed after the proper passage of time.

The closing attorney should also determinehow the mail of the deceased attorneyshould be rerouted. Rerouting the mail tosomeone that can properly field it and noteany potential problems, inquiries, or needsis helpful. The deceased attorney’s phonenumber and website should be consideredin the same way. If they can be transferredto someone, this too may assist with pro-tecting the estate, the law practice, and theclients.

SOME CLIENTS WILL NOT RETRIEVE THEIR FILE

Inexplicably, some clients will not retrievetheir file. For some, it will be because theydo not care. For others, it will be becausethey did not receive notice as the lettersadvising them came back undelivered. Theclosing attorney must make diligent effortsto notify all clients. At the end, the closingattorney’s question will be “What do youdo about the lingering files when clients willnot come in to get them?” After multipleefforts to provide clients with notice and anopportunity to retrieve their file, the fileshould be retained with all others in theevent that they one day change their mind.

CONCLUSION

Accepting the assignment to serve as theclosing attorney for the law practice of adeceased sole practitioner is a formidabletask. The closing attorney is dealing withpersonnel and clients that he does notknow. The closing attorney is asked to dealwith unfamiliar legal files and unfamiliar lawoffice systems. The assignment, as de-scribed in KBA Ethics Opinion 405, is to“step into the deceased lawyer’s shoes, notfor the purpose of practicing law, but forthe purpose of notifying clients, arrangingfor the disposition of files, and winding upthe deceased lawyer’s affairs.” At times, itmay not seem like the closing attorney ispracticing law at all. Nevertheless, the clos-ing attorney must keep in mind that at theheart of the assignment there are clients.The clients have a legal matter, and their at-torney/client relationship has endedthrough no fault of their own. Regardless,their legal matter goes on. The closing at-torney must assist the deceased attorney’sclients with a transition as best as is possi-ble. If successful, the clients will continue onwith their legal matter with a new attorney.If successful, the deceased sole practition-er’s estate will be protected, and his goodname untarnished. All are worthy objec-tives.

ADDITIONAL RESOURCES

Del O’Roark, Post Mortem Professional Re-sponsibility: What does a sole practitionerowe those dearly beloved clients left be-hind? 57 Bench & Bar 2, Spring 1993 (page41).

ALI/ABA’s A Practical Guide to AchievingExcellence in the Practice of Law.

James E. Brill, Dealing with the Death of aSolo Practitioner, 4th Annual Advanced Es-tate Planning and Probate Course, Chapter8. This has an excellent Appendix with ad-ditional resources and citations.

1Caution should be taken to avoid misleading theclient since the closing attorney’s name will not be in-cluded on the deceased attorney’s letterhead.

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LAW OFFICE MANAGEMENT

Additional articles regarding Law Office Management have been placed on the

KBA Website under the Hot Topics page. The articles include:

“ Wage Theft in the Food Service Industry:

How Can Kentucky Fix It?” by Justin B. Brown

Look for this logo at www.kybar.org to find these additional articles.

Glenn David Dentongraduated from CentreCollege in 1992 andSalmon P. Chase Collegeof Law in 1995. He waspresented Chase’s Outstanding Recent Alumnus Award in 2005.

He is a partner at Denton Law Firm, PLLC in Paducah, Kentucky and practices throughout western Kentucky and southern Illinois.

He has been a member of the board of directors of Lawyers Mutual Insurance Company of Kentucky since 2006. He currently chairs LMICK’s audit and finance committee.

His practice encompasses complex civil litigation, estate and trust litigation, business law, employment law and insurance defense.