Have you considered what the impact would be on your legal practice if you passed away, lost capacity or suffered a sudden illness or accident?
Have you thought about how this unexpected absence might place your clients in a position of prejudice?
Is there a duty or obligation on legal practitioners to create a contingency plan?
There is no strict legal obligation to create a contingency plan in Queensland, although certainly, legal practitioner directors are under an obligation to establish and maintain appropriate management systems.1 An appropriate management system ought to include risk management strategies and contingency plans.
Additionally, all legal practitioners in Queensland are subject to the Australian Solicitor Conduct Rules 2012,2 which imposes on the practitioner a fundamental duty to the court and the administration of justice,3 to act in the best interests of a client,4 and to deliver legal services competently, diligently, and as promptly as reasonably possible.5
It wouldn’t be a far stretch of the imagination for a court to consider that these provisions require a practitioner to make appropriate arrangements for their practice in the event of death, incapacity or sudden illness or accident.
Sole practitioners and sole legal practitioner directors make up the majority of our legal practices in Queensland.6 For practitioners operating on their own or with a small team, the consequences can be significant. The vulnerability of small and micro practices are exposed when one considers the sudden impact of the principal’s absence from the practice.
While this article has our sole practitioners/sole legal practitioner directors clearly in mind, it is also important for practitioners in partnerships to address contingencies in their partnership agreements.
When you think about all the aspects of your legal practice, how many people spring to mind as being ready, willing, and able to step into your shoes?
How many different ‘hats’ do you wear when running your practice? Are you the accounts manager, legal technician, business development manager, marketing guru, administration assistant and all things in-between – or do you have a team supporting you? Sole practitioners/legal practitioner directors are often wearing more ‘hats’ than partners in mid-large firms.
An added consideration for our suburban and regional practices are what roles do you and your practice play within your local community and business network?
All things considered, you are a critical element of your legal practice, and for many of you, without you there would be no legal practice. If you were selling your practice or transferring ownership, you would probably plan for that transition over a period of six to 12 months, yet we pay little attention to the effect of a sudden exit (either permanently or temporary) due to the perception that ‘business as usual’ takes precedent.
Think about the advice you would provide to your client if they were establishing a business.
Stay tuned for Part 2 of this article, where we will offer some suggestions.
If you would like to discuss the impact that the issues raised in this article may have on your practice, please reach out to our Practice Advisory Service for a complimentary consultation for Queensland Law Society members at firstname.lastname@example.org or submit your expression of interest online today!
1 Legal Profession Act 2007 (Qld) s117 (LPA).
2 Presently under review and available for consultation.
3 Queensland Law Society, Australian Solicitors Conduct Rules 2012(at 1 June 2012) r3.
4 Ibid 4.1.1.
5 Ibid 4.1.3.
6 Current estimates (according to data held by Queensland Law Society) provide that 87.67% of all law practices in Queensland are sole or micro practices.