Disaster Planning Series #2: Checklist: Preparing Your Agreement with Your Back-Up Attorney

Lawyers Mutual of Kentucky understands the idea of tackling a disaster plan can often feel overwhelming.  In this series, we will explore small yet impactful steps attorneys can take each month to begin preparing for the inevitable.  Click here for our other installments and more disaster preparedness resources.

After you have identified an appropriate back-up attorney and reached a verbal agreement, we recommend formalizing the agreement in writing.  Once executed, we also recommend updating client engagement letters to notify them of the arrangement as discussed below.

Checklist: What to Include in the Written Agreement

  • State the purpose and intent of the agreement. The purpose should be limited to only addressing the duties of the back-up attorney in your absence.  Include language clarifying that the agreement is not intended to create a partnership or law firm.
  • Define the scope of the agreement. Although most attorneys will have a single back-up attorney, it is possible one attorney may be the right fit to help wrap-up your practice in the event of your death or disability while a second attorney may be better suited to cover you on shorter or planned leaves.  You may also desire to have the scope limited to certain matters (litigation only, transactional matters only, etc.).  Once you determine the best fit for your practice, describe it in the written agreement.
  • Determine fee arrangements. The agreement should cover when and how much the back-up is to be compensated.  Many attorneys agree to perform back-up services for no or nominal compensation, which should be memorialized in the agreement.  If a fee will be shared, consider the time spent on the matter by you, the back-up, and whether the case is on a contingency fee basis. Identify the source of payment, e.g., accounts receivable, settlements, or fees received for the back-up’s services only. It is almost certain that SCR 3.130(1.5(e)) on fee sharing will apply. Be sure to comply with its disclosure and client consent provisions.
  • Discuss how client funds will be handled. Consider making arrangements for the back-up to handle your client trust account. One way is to make the back-up a signatory on the trust account. A better way is a special power of attorney that permits the back-up to act for you only in specified circumstances.
  • Outline any administrative or practice management duties. For solo practitioners without administrative staff, will the back-up also be handling payment of your office utilities or other firm bills?  Are there other tasks that are not client-facing but still need to be handled?  Provide a general description of these items and your expectations of the back-up attorney.
  • Identify what information has been exchanged. Document what information you have shared.  This could include items such as:
    • Law office entry permission and information
    • Professional calendar location and access
    • Client file information and access
    • Contact information for our professional liability insurance provider including the policy number
    • Contact information for key persons to be notified other than clients (which you may want to simply list in the agreement for ease of access)

Our next installment will discuss in more detail what information you will want to compile for your back-up attorney.

Additional considerations

If the reason for closing a practice is the death of a sole practitioner, planning agreements designating a closing lawyer may become void. It will probably be necessary for the estate’s executor to authorize the designated lawyer to close the practice. For this reason, part of the planning process should include making sure there is a provision in the lawyer’s will directing the executor to appoint the designated lawyer to close the practice.

Client Engagement Letters and Back-Up Attorney Arrangements

Back-up arrangements may be implemented only with client consent. The best practice is to notify clients of the identify of your back-up attorney and the agreed upon scope of his or her work in advance in an engagement letter acknowledged in writing by the client.  This has the advantage of in-place client consent for a back-up to take over a matter without delay.  Remember to update this clause in your engagement letter if this back-up attorney changes.  Additionally, if the back-up attorney changes during the course of representation, provide written notice to those existing clients of the change and request their consent.

Sample Clause for Engagement Letter:

Back-up Attorney Notice:  In order to meet my ethical obligation to protect your interests in the event I am unavailable due to an extended leave, I have appointed [INSERT NAME HERE] to act as my back-up attorney.  [INSERT NAME] will have the authority to [DESCRIBE SCOPE HERE.  EXAMPLE: handle matters that arise during a planned leave and will step in to assist wrapping up my practice should the need arise.]

Stay tuned for more, small yet impactful steps you can take to prepare for the inevitable.