Get Your Game On: By-Law 7.1 and the Art of Contingency Planning for Estates Lawyers

As Wills and Estates lawyers, we are in the unique position of guiding clients through the intricacies of preparing for the unexpected. We know that every journey has its final chapter, but it doesn't have to be a chaotic affair. Rather than a poorly executed disaster, we can pave the way for a seamless transition. Embracing this responsibility allows us to shine as exemplars of effective contingency and succession planning, especially in light of the new By-Laws. We come with a preexisting skill set to transform potential pitfalls into opportunities for peace of mind and lasting legacies.

Effective January 1, 2025, By-Law 7.1 requires all lawyers in private practice to create a comprehensive client contingency plan. This crucial plan is designed to be activated if a lawyer unexpectedly becomes unable to continue their practice. By taking proactive steps now, we ensure that our clients’ needs are met seamlessly, even during unexpected transitions.

Contingency Plan Requirements

Any such plan requires contemplation of the following elements (The 5 A’s):

• Name an Administrator: Lawyers are required to designate a licensed administrator who can step in to assume their professional obligations should they become unable to continue practicing. This administrator will oversee the wind-up of the lawyer’s professional duties, which includes notifying the Law Society, transferring client files, accessing trust accounts, and facilitating the transition to a successor, if one has been designated.

• Access to physical documents: The plan must specify where all client files, wills and will indices are stored and how to access them. This might include access to keys and security pass codes.

• Access to electronic files: The plan must include instructions for accessing digital records, including passwords, email, digitally stored will indices and accounting systems.

• Access to finances: The plan must outline the location of all trust accounts and financial records, along with contact details for bookkeepers or accountants. Document the authority and conditions for the administrator to access the funds.

• Additional elements: The plan must include any other necessary arrangements to wind up the lawyer’s business and protect client interests.

Practical Issues Specific to Wills and Estates Lawyers

1.      Finding an appropriate administrator:

If your administrator is also designated as your successor, they must have a level of expertise comparable to your own. For instance, if your practice primarily involves drafting straightforward wills, it would be appropriate to select a practitioner with similar qualifications. Conversely, if you specialize in servicing high-net-worth clients with complex cross-border estate issues, it is essential to choose someone who has the necessary expertise to meet those specific needs.

It is important to note that your administrator does not have to be your successor. You may opt to close your practice entirely or designate a successor who differs from your administrator. Practically speaking, it can be more beneficial to find an administrator who is geographically nearby, rather than focusing solely on their ability to serve your clients. For solo practitioners or small firms, establishing a reciprocal arrangement with a similarly situated practice can be a viable option, while larger firms may also be willing to assume this role.

2.      Discuss the issue of payment:

Administering a law practice is akin to serving as an executor—it can be time-consuming. Your administrator will need to manage this responsibility alongside their existing caseload. It’s crucial to clarify how they will be compensated for this additional role. Will the funds come from the firm’s operating budget, the sale of the practice, a contingency fund, or another source?

Additionally, consider whether your successor will be required to pay for the practice. If so, how will its value be assessed? If the administrator also serves as your successor, they may take on this role in exchange for the opportunity to expand their own practice.

3.      Make it as easy as possible for your administrator:

Before approaching a potential administrator, ensure that you have taken steps to make the role as manageable as possible. It is significantly easier for someone to agree to such a responsibility when it appears achievable. Be prepared to demonstrate that you have “put your affairs in order” through clear organization and effective communication.

Conversely, if you are asked to consider becoming the administrator for another practice, take the time to assess whether these matters have been adequately addressed.

4.      Consider centralized will storage:

Managing your will bank can present one of the greatest challenges for your administrator. To alleviate this burden and simplify your life now, consider utilizing Custodius (custodius.ca). This service offloads the responsibility of paper will storage, providing your law firm with an organized online will index without incurring ongoing storage costs.

Using Custodius not only enhances the value of your practice to potential successors, but also offers them a turn-key will bank that helps retain future business for both you and your successors. Furthermore, this solution eliminates the typical ongoing costs and liabilities associated with will storage. By adopting Custodius, you ensure that your clients' wills can be easily located after any transition.

5.      Communicate your contingency plan well:

A contingency plan is only useful if the right people know it exists. Ensure your staff are aware of the plan and where to find it. Your personal executor and attorney for property should also be informed and know how to contact your designated administrator.

6.      Revisit the plan annually:

Filing the LSO annual report is the perfect time to quickly review your contingency plan. Ensure your administrator is still appropriate, your team knows where to find your plan, and how to contact your administrator in the event of a crisis.

Final Thought: As lawyers who frequently advise clients on the importance of preparing for the unexpected, it’s time we embody the principles we advocate. A well-considered contingency plan not only fulfills a lawyer’s regulatory obligations, but it also represents a professional legacy worth leaving behind. Such a plan exemplifies best practices and helps maintain the credibility of our profession.