Solo Attorneys: Plan For Disaster

By Law Firm Suites - April 24, 2014
Solo Attorneys: Plan For Disaster

“So I was on my way to work . . . “ – Adventures in Contingency Planning for Solo Attorneys by Thom Chu, solo trusts and estates practitioner

 

Solo Attorneys: Plan For DisasterWorking solo has its benefits and burdens

Whether you have just gone solo, been living and working this way for a while, or still contemplating making the leap, you probably don’t or won’t miss the idea of interminable staff meetings, meeting the unreasonable demands of partners, or reaching a firm’s impossibly-high billable-hour goal. Instead, you get to shape your own expectations and frame your own plan for your law practice.

Things to love about working solo:

  • Getting to focus on a practice specialty that I am good at performing and enjoy
  • Getting to choose my clients
  • Getting to conduct business my way in an order that suits me (while meeting clients’ needs)

Things to hate about working solo:

  • Having to decide everything myself
  • Having to finance everything myself
  • Having to develop a “neurotic mind” that considers contingencies not only for my clients but for myself as well

Most solo attorneys are so busy “doing” that there seems to be little time for “planning”

When your days are filled with the structured-unstructured realities of hustling for work (also known as marketing, client cultivation, and networking), meeting with clients, and actually doing the work required, there seems to be little time for maintenance and ongoing administration, including the need to plan for the “what-ifs” of everyday practice life.

While many BigLaw operations have written contingency plans for a myriad of possibilities, even if some of those plans are disused or otherwise impractical (remember the firms with 100% fireproof safes full of documents safely tucked away in waterlogged basements in lower Manhattan?), most small and solo firms have nothing in writing, and few have even considered these possibilities seriously.

“What, me worry? I’m not even dead yet . . .”

As I like to advise my trusts and estates clients, planning isn’t just for “when you die,” it should also be in place for lifetime contingencies and disability.  Here are some practical thoughts about lifetime contingencies that might pique your interest:

1) Many malpractice insurers require contingency plans to be in writing, you should check your policy. Some may not require them but will consider this when calculating your risk premium.

2) You may be held liable for work that is not completed or significantly delayed, resulting in disciplinary action or possibly a malpractice claim.

3) If you suffer even a temporarily-disabling event in a solo practice (such as a slip-and-fall), lacking a clearly-documented office procedure and a willing substitute to carry out your work-in-progress can mean lost revenue, erosion of your professional reputation, and extensive penalties for missed deadlines (think court, rent, and bank, for a start).

4) Having a general durable power-of-attorney may be useless in your professional practice because your designee legally holds all the appropriate powers but has neither the technical nor specific knowledge to help you in the ways that you need.

5) If you have anyone who relies on your income (or if you are alone but also have recurring bills to pay), consider accumulating a rainy-day fund (three-months’ of regular expenses) and/or taking out disability insurance to cover the period when you are unable to generate the funds yourself.

Funniest responses to my questions about lacking a plan (not all from people who are lawyers):

a)      “No problem, my spouse is my backup person” (who, as it turns out, doesn’t even know the PIN number to the firm’s bank card let alone know anything about the business, e.g. what the email password might be).

b)      “Now that you mention it, I have so many ‘secret’ passwords that I have to reset certain accounts because even I forget them now and again  . . .”

c)       “Did you mean by telling me LegalZoom is being sued for the unauthorized practice of law that their stuff might not hold up in court or in real life?”

OK, now I’m worried, what am I supposed to do?

At minimum, consider the following:

1)      Find a trusted colleague who is willing to act as your springing power-of-attorney.

2)      Document all of your office’s practices and procedures in a systematic way so that your designate can take over, even if only for a short time. This should also have an office closure procedure.

3)      Have a springing power-of-attorney drafted that is specifically keyed to your new (or updated) practice and procedure manual.

4)      Take out disability insurance or at least self-insure by establishing a “rainy-day” fund.

5)      Set up an online repository for all of your information, preferably with tiered access, to share your “secret” codes with the appropriate person at any given time. I offer my clients a free one-year subscription to MyPersonalDataSafe, a consumer-facing product that comes with my paid use of Xchangeport, a secure document exchange service. https://www.mypersonaldatasafe.com/indexHome.php, http://www.xchangeport.com/

6)      If you are like 55% of Americans who haven’t already taken care of your basic planning documents (will, durable power of attorney, health care proxy, living will), get this together now. It is that other half of your life that needs attention.

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Solo Attorneys: Plan For DisasterThom Chu started his own estate and business succession planning practice in December 2013 at Law Firm Suites right out of law school. Prior to his current adventure, he worked for 18 years at the headquarters of The Episcopal Church, a Christian denomination of 2 million members, directing its work in education and faith formation. He considers the discipline of planning a form of professional “worrying” so that clients don’t have to do it all by themselves.

 

About Law Firm Suites

Law Firm Suites is the leading NYC shared office space for solo attorneys and small law firms. At Law Firm Suites, attorneys get headache free sublet office space, virtual office rentals and litigation hotel services. Law Firm Suites has two locations in Manhattan, one in White Plains NY, and one in Annapolis MD. Law Firm Suites' community of self-employed lawyers are eager to help colleagues succeed, and routinely exchange over $2.5 million in legal business every year in each LFS business center. Connect with Law Firm Suites on Twitter and .

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