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Reasons To Close Your Practice

In this section we will review:

• Reasons attorneys consider closing their practices.
• Warning signs that closing your practice will be important.
• Ways of evaluating your own competence to practice.

For Those Considering Closing Your Practice

Closing your practice can feel like a significant and emotionally laden experience. In addition to the logistics of notifying clients and addressing ethical and financial responsibilities, it can also feel like you are walking away from one of the great endeavors of your life. Practicing law can feel like a momentum game: when you take a break you may question whether you will be able to return to the profession later. The sunk cost fallacy is the tendency for people to continue an endeavor or course of action even when abandoning it would be more beneficial. Many lawyers think about the financial and emotional investment that has gone into becoming a lawyer and use this as a rationale for not walking away. Many attorneys discover that once they are able to disengage from legal practice their lives become substantially better!

There are so many reasons for closing your practice, some optimistic, others distressing:

• You may have plotted your retirement for a while and the time is right.
• You may be in the throes of addiction or depression and feel like you are not able to practice law.
• You may want to close your practice with a plan to take a break for a few years.
• Perhaps you are trying a different career or taking time to be with family.
• You may be concerned about cognitive impairment and your ability to successfully represent a client.
• All sorts of life events from health, to struggles in one’s families, to financial challenges can play a role.

Warning signs that closing your practice will be important

The greatest warning sign is when you are just not able to feel engaged in your work over a long period of time. While attorneys are used to persevering and triumphing over the adversity that can play a role in creating work product, when this challenge becomes a daily and consistent feature of your workday it is a sign that your work is not matching your interest or abilities.

What follows is an avoidant relationship to your office. You may procrastinate in getting back to clients, dread briefs that need to be written, or have a deep reluctance to take on new cases or market your practice. An alternate life can start appearing filled with features of everything you would rather be doing.

The key with your career is to be able to harness your body and mind in a way that is synchronous and engaged with the challenge you are taking on. If there is a disconnect that has not responded to best practices from productivity experts, trainings, and other supports, stepping away from your current career may be the simple necessity.

Some features of this disconnect include:

• Taking longer to get things done, losing track.
• Thinking a lot about what you would rather be doing.
• Not having enough time to take care of your health and relationships.
• Doubting your abilities.
• Burnout.

It is not uncommon to struggle with recall of names and some of the details of previous events as one enters their 50s and 60s. But at what point is this a sign of dementia? There is not a simple answer to this question. To diagnose dementia-related conditions, physicians may use medical history, mental status tests, physical and neurological exams, diagnostic tests, and brain imaging. Dementia’s onset can be incredibly subtle and accumulate gradually over the course of years or decades. In some cases, crystallized intelligence of memories in one’s earliest years, like the name of your second-grade schoolteacher may be intact while fluid intelligence that involves the use of short-term memory and requires the integration of multiple features of intelligence can degrade more precipitously.

What happens when the warning signs might not be as apparent?

Read through the next set of prompts to guide you through the self-evaluation around closing your practice. These prompts can help you internally or be shared in a conversation with others who may help you decide on closing your practice.

• I have little interest in achieving and completing my work.
• I struggle waking up in the mornings on my workdays.
• I often daydream about what my life would look like outside of my practice.
• I am drained and exhausted at the end of my workday.
• I do not find my work rewarding.
• I look forward to the end of my workday before it has started.
• I can no longer tolerate my clients.

Evaluating Your Competence to Practice

If this is a concern, the most important thing you can do is work with your doctor to answer these questions. A psychological evaluation testing features of cognition can be a useful practice even if you are not concerned about your performance. It will offer a baseline for evaluation in future tests. These evaluations will show where your strengths and weaknesses lie and to what degree they are present. It is important not to be fearful of information. The Member Wellness Program manages a list of names of psychologists and psychiatrists who provide these assessments.

In addition, it is important to tease out whether you are struggling with dementia, depression, or both. These conditions can really look a lot alike and there is a concept called pseudodementia where depression imitates dementia. It is common for those with cognitive impairments to take anti-depressant medication to see if cognitive issues resolve. If they do, that would be great news and a simpler fix.

The Member Wellness Program can also recommend psychologists and psychiatrists who specialize in cognitive assessment.

Reasons You Resist Closing Your Practice

You may resist closing your practice for various reasons. You may even resist closing your practice without really being aware of why. Making a list of your fears is a useful way of breaking through minimization, rationalization, and denial. The key here is doing what you can to answer your concerns.

• If you are concerned about your finances in retirement you can work with a financial advisor as well as family members to estimate your budget. If you are not sure how to go about receiving Social Security and Medicare, you can find answers with some simple research.
• If you are concerned about how retiring will affect the dynamic in your household, taking time to speak with family members, or even engaging a couple’s therapist, can help you brainstorm ways to make retirement seem exciting and filled with opportunity.
• Not really knowing how to spend your time in retirement is a common concern. Starting this brainstorm early and nourishing new interests over time will help fill out large chunks in your days that were previously spent in the office.
• Perhaps you are concerned about letting your clients down. Lawyers often come to the profession with a uniquely sharpened sense of responsibility. Taking time to recognize that you cannot serve your clients forever and trusting other attorneys to handle matters in their own way is inevitable. Working with a therapist to resolve the conflict between responsibility and your own needs can make the difference.

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Ethics:

Evaluating Your Ability to Practice  and Your Responsibilities to Clients

Lawyers and their family members considering closing down a practice have to consider many issues. Besides the practical components of closing a business, lawyers must also be mindful of the ethical rules that may come into play. Below, we’ll walk you through many of the rules that commonly apply in this transition.

1. Act in the Client’s Best Interest

Keep your clients’ interests foremost in mind. RPC 1.2.

Don’t rush client matters to suit your retirement and remember the decision to settle a matter must be made by the client. If a matter can’t be concluded in your time frame, consider referrals to other practitioners. RPC 1.2, 1.16. Keep in mind that lawyers need to be competent to handle client matters. RPC 1.1. If you are concerned about your own ability to have the requisite facilities to practice law, stay in compliance with the Rules of Professional Conduct, and act in your client’s best interests don’t hesitate to contact the Member Wellness Program for a consultation or the WSBA’s Professional Responsibility Counsel, also known as the Ethics Line, at 206-727-8284. If you are concerned about another attorney’s competency, look to resources available through the WSBA Member Wellness Program.

2. Terminating Representation

RPC 1.16(d) states that “Upon termination of representation, a lawyer shall take steps to protect the client’s interests, such as giving reasonable notice to the client, allowing time for employment of another legal practitioner, surrendering papers and property to which the client is entitled and refunding any advance fee that has not been earned or incurred.”

3. Communicate With Your Clients

Keep your clients informed. All during a representation, a lawyer has an obligation to reasonably consult, inform, and explain matters to the client. RPC 1.4. A lawyer must explain matters to the extent reasonably necessary to permit the client to make informed decisions regarding all stages of the representation. If a lawyer’s personal plans to wind down their practice will affect a client’s matter, the lawyer must share that information with the client. RPC 1.4, Comment 7: A lawyer may not withhold information to serve the lawyer’s own interest. After representation has ceased, be sure to send a closure letter and document it in your files.

4. Document Retention and Trust Account Closure

• Return all property you are holding for clients and third persons. RPC 1.15A. If there is a dispute about who is entitled to the property or funds, you may consider interpleading the funds with the court. RPC 1.15A (g).
• No ethics rule requires you to keep all prior client files, but you must keep records to document return of property, and trust account activity for 7 years. RPC 1.15A(c)(3), RPC 1.15B(a). Consider retaining files if there is the potential for continuing litigation or a malpractice claim. More information can be found here.
• RPC 1.15A(c)(3) also requires attorneys to keep records of any property held for a client that is not money for seven years. In addition, the client file is the property of the client at the conclusion of the legal representation and has to be provided to the client if they ask for it. See also WSBA Advisory Opinion 202401 for organizing and determining what documents must be, should be and should not be provided to a former client.
• Confidentially destroy all files that you are not keeping or returning. Consider what you will do with items of intrinsic value/ documents with original legal significance (such as wills) which cannot be destroyed. Where will you securely maintain the files you are retaining?
• If you are holding funds for a person you cannot locate, you should treat the funds as unclaimed property under the Uniform Unclaimed Property Act, RCW 63.30. RPC 1.15A Comment 6. 

5. Questions About Fees

If you had a flat fee agreement with a client, and the agreed upon services have not been completed, the client may be entitled to a refund of a portion of the fees. RPC 1.5(f).

If you left a firm, you may still receive a portion of the fees to be received in the future for previously done work. RPC 1.5 Comment 8.

6. Stop Practicing Law

If you gave up your law license, remember you may no longer practice law. GR 24 defines the practice of law as the application of legal principles and judgment with regards to another entity or person. Refrain from giving legal advice if you no longer have an active license.

7. Selling Your Practice

You can sell your law practice, including good will, but the sale of your practice must be in its entirety, detailed notice must be given to clients, and fees can’t be increased because of the sale. RPC 1.17.

8. The Ethics Line

Call the Ethics Line at 206-727-8284 if you have a question about your prospective ethical conduct. It’s completely confidential with no record. We’d love to hear from you!

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Practice Management:

A Step-By-Step Guide to Closing a Practice

Legal professionals embarking on the journey of closing a law practice must address a myriad of issues. Beyond the ethical framework, there lies a practical realm—the business side. This section lays out the basic components of closing your practice: financial considerations, giving notice, insurance issues, closing accounts, what to do with open cases, retaining documents, and handling directory and online listings.

1. Create a Timeline

It is important to establish and follow a timeline. To create your timeline, ask yourself two preliminary questions:

When do you want to close your practice?

Determining when to close your law practice requires careful consideration of various factors. Assess your professional and personal circumstances, considering potential impacts on your practice closure. Considerations include the status of ongoing cases, any impending court dates or deadlines, and the need for a seamless transition for your clients. Additionally, factor in your own well-being and the time required to wrap up administrative tasks. Whether influenced by retirement, career changes, or other life events, establishing a realistic closure date is essential for a successful and well-managed conclusion to your legal practice.

How long will it take to close your law practice?

Give yourself six months to a year to fully wind down your practice. Set a future closing date considering your active cases and the steps involved to close your office doors. 

2. Law Practice Closure To-Do List

Financial

Collect your accounts receivable. Before you announce your office closure to clients, be sure to collect outstanding fees. Be diligent in your collection efforts. Upon learning of your plans to close your office, some clients may use this as an opportunity to avoid paying their bills.

Reconcile and close your trust account. Ensure that you are continuing to properly reconcile your trust account in compliance with Rule of Professional Conduct (RPC) 1.15B. Refund or transfer any unused funds from fee deposits per RPC 1.15A. Treat funds you are holding for clients or third parties that you cannot, after taking reasonable steps, locate, as unclaimed property and file a report with the Department of Revenue. Additionally, be sure to comply with RPC 1.15B regarding preserving trust account records. Contact your bank about fees associated with closing your trust account and be sure your account has sufficient funds to cover the fee. (Do not use client funds to cover this fee—you are responsible for this charge.) See the WSBA’s Managing Client Trust Accounts Booklet for additional trust account information.

Address outstanding liabilities. Pay balances and then cancel firm credit cards. Meet with lenders regarding outstanding loans.

Notice

Announce your plan internally. Provide your staff with ample notice of your intention to close your practice. Walk through your office closure plan with them and delegate tasks where you can. As an incentive for staff to stay and help you to close, consider offering bonuses. Also consider helping staff find new employment by reaching out to your network to ease the transition.

Announce your plan externally and stop accepting new cases. Inform your clients, past and present, that you are closing your law practice. Per RPC 1.16(d), to the extent reasonably practicable, a departing lawyer shall protect a client’s interests such as giving reasonable notice to the client, surrendering papers and property, and refunding any fee that has not been earned. Document the communications you make of your office closure, including information about when and how you notified your clients. Inform clients of the closing date, the status of their case with you, and how to transfer their files to themselves or a new lawyer. 

Address any client funds you hold in trust.

Notify opposing counsel, courts, and other tribunals of your office closure as well.

For additional information regarding notice, see Advisory Opinion 201801 Lawyers Moving from Firm-to-Firm in Private Practice.

WSBA Forms and Guides. The WSBA offers the following forms to help notify clients and track file transfers in the Law Firm Guide to Document Retention:

• Client Authorization of File Transfer Form
• Letter Advising that Lawyer is Closing Office
• Client Acknowledgment of File
• File Closure Tracking Spreadsheet Timelines for File Retention

Insurance

Tail policy. Contact your malpractice carrier and inform them of your office closure. Consider adding a tail policy. A tail policy adds coverage to your malpractice insurance, providing protection for claims reported after your insurance policy ends.

Health insurance. Make a health insurance plan for after you close your office. An insurance broker can help to guide this process. Consider enrolling in a plan from the WSBA’s Health Insurance Marketplace.

Close Accounts

Manage and contact (and maybe close) digital subscriptions and databases. Software services often limit the amount of time a past subscriber has access to their data post cancellation. Be sure to export all information and data you intend to keep before you lose access to it. Check your terms of service for software data policy. The document retention section below describes how to track your files.

Forward mail, email, and calls. Arrange your mail forwarding with USPS. Also forward calls and emails. Consider including an automatic response in your emails, stating the date of your office closure and your contact information thereafter.

Close utilities and manage lease/rental agreements. End your phone and internet services when your practice closes. Finalize arrangements with your landlord and with vendors such as office equipment rentals.

Dispose of furniture, fixtures, art, electronics, and library. Consider selling or donating.

Cancel other services, like process service and remote receptionists. 

Open Cases

Finish what you can. In addition to notifying your current clients of the office closure, plan and manage the client work you can finish. For client matters that cannot be resolved prior to the firm closure date, address continuances, upcoming hearing dates, and attorney referrals to continue the client’s legal work. In some cases, you may need the court’s permission to withdraw, so you should factor into your winding down plans the possibility that you may not be permitted to withdraw from all open matters. For forms to notify your clients and transfer files, see the “Notice” section above.

Contact counsel for opposing parties and third parties involved in current matters. Other parties and entities may include social workers, financial advisors, experts, and guardians ad litem.

Document Retention

Manage client files according to your document retention policy. In the context of concluding a law practice, it is imperative for legal profes­sionals to either maintain their existing document retention policy, if in place, or, for those who presently lack such a policy (despite its recom­mended necessity), to diligently establish a comprehensive strategy for the cessation of legal operations. This involves organizing, storing, and securely destroying client files while aligning with professional obligations outlined in the RPCs. The policy should address the scope of the client file, clarify ownership rights, and adhere to specific timelines for retention. Best practices include promptly returning original materials and documents to clients, informing them of the policy, and using stringent cybersecu­rity measures. Forever-kept items should include an index of client files and records of file transactions, ensuring a comprehensive and compliant approach to document management.

Review the WSBA Law Firm Guide to Document Retention to better understand your professional obligations for document retention, the scope of the client file and property of the client, suggested best practices for document retention, cybersecurity, and practice forms.

Update Online Presence

Address existing advertisements, legal directory listings, website, and social media. Update your information on legal directory listings. Make it clear on your website the date of your office closure and update your free Google business listing to say that your office is closed.

3. Ensuring Preparedness

Backup Attorney: If you were to unexpectedly become incapacitated or die, not having a designated backup attorney can lead to substantial harm to your clients and burden your family or friends with managing firm operations amidst their grief. To mitigate this, it is crucial to designate a licensed legal professional as a temporary custodian through a comprehensive written agreement. This agreement should outline the custodian’s responsibilities, trigger conditions, conclusion mechanisms, and authorization for client communication and practice closure. For trust accounts,
identifying an authorized signer beforehand ensures seamless access to funds, preventing delays that could affect your clients’ legal representation. RPC 1.15A(h) addresses the responsibilities of an authorized signer. Addressing these considerations proactively safeguards your clients, your practice, and upholds ethical standards.

Disaster Plan: You need to be proactive in establishing your own disaster and succession planning so that your clients are protected, and your loved ones are not burdened with finding a resolution to your business functions. Beyond the potential impact on individual health, unforeseen events can disrupt the working space or technology crucial for handling client information. For detailed disaster planning guidance, checkout the WSBA’s Law Firm Guide to Disaster Planning. This resource emphasizes a threefold approach to disaster preparedness: identifying common areas of vulnerability for solo and small firm legal professionals, implementing prevention techniques to mitigate risks, and addressing disasters effectively when they occur. The learning objectives cover professional responsibility for disaster planning, the necessity of business continuity plans, and best practices for minimizing the repercussions of unexpected events.

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Plotting a Successful Retirement

For those who are not simply closing their practice but in fact retiring, we have a few best practices for engaging this chapter in your life.

Two Approaches

I’ll Figure it Out When I Get There. This approach does make sense. You may be too burdened with current responsibilities to have the bandwidth to contemplate next steps. Additionally, this demonstrates a faith in your own resourcefulness to manage the dilemma of how to spend your time when the time comes. But sometimes you may be holding on too tight to your legal career because you have spent a great deal of your life devel­oping your legal skills and practice. Just because you are trusting in your abilities does not mean it will translate into success.

Titrating Back. Titration is the gradual reduction of dependence upon a chemical or process. In this scenario, the process is lawyering, and one would be carefully replacing the time spent practicing law with other endeavors. We recommend this approach as finding new endeavors that endure is not a simple thing. When you retire, you may have 40+ hours to fill in your week. If you can spend your 60s going from 50 down to 20 hours of work each week than you will develop routines in your day that have time to work or not. Whether it is building out your social life, exercise, or hobbies it takes time to figure out which commitments are just ideas, and which are growing realms of engagement.

Prioritizing Your Health

One objective of retirement is to limit your “marginal years.” This is the months and years in your life where you cannot do the things you want to do. Needing help walking, planning one’s day, or getting dressed is humbling. It also puts pressure on caregivers. It is pivotal to prioritize diet, exercise, social relationships and accessing medical care as chal­lenges appear.

In this regard, exercise can become your new office with the bonus that you only have to go to work for about 30 minutes each day. Working with medical providers on best practices in preventive medicine can catch problems before they become greater health disorders.

Finding New Interests

Attending law school, getting your law license, and building a legal career requires a high degree of dedication and work. By the end of that period, you may not remember what your interests had been. Resuscitating old interests or finding new ones requires a “beginner’s mind” and a willing­ness to not be an expert.

One path is to find law adjacent interests. Many attorneys have enjoyed intellectual debates their entire lives. Thus, joining a discussion group is a great first step. Finding a frequent forum for political discussion, a book group, or advocacy through your service on a board can help nourish this instinct.

Additionally, lawyers often enjoy fighting for causes. It is hard to volunteer at a homeless shelter and not recognize a sober cause worthy of support. If there is a group that you can support and feel proud to be associated with this can make your retired life feel more meaningful and inspiring. WSBA members who want to provide volunteer legal services through a qualified legal services provider can advocate using a special license which allows providing pro bono legal services in your community.

Social Relationships

United States Surgeon General Vivek Murthy described a national epidemic of loneliness and warned that “being socially disconnected” has a similar effect on mortality as smoking up to 15 cigarettes a day. Nurturing friend­ships and family relationships requires effort and persistence.

• Proximity is the best predictor of successful relationships. So, open your door to neighbors.
• Find social groups that can meet with frequency, as opposed to a coffee or meal every several months.
• Acknowledge the friends you already have and reach out to them.

A New Life

Ultimately, retirement is about having more time to choose a direction for yourself. This can be both exciting and intimidating. Most people wish for freedom to choose, but too much freedom can be confusing. Creating a game plan that includes finding new interests, investing in social rela­tionships, and prioritizing your health can help you pick a direction that really works for you.

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WSBA Custodianship Program

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Additional Resources

Frequently Asked Questions

If I do not have a designated custodian for my practice, and I pass away, will the WSBA administer the closure of my practice?

Not necessarily. While the Rules for Enforcement of Lawyer Conduct establish a process for designating a custodian to protect client interests,¹⁴ this is a very limited resource and is not available in all circumstances. You need to be proactive in establishing your own succession planning so that your clients are protected and your loved ones are not burdened with finding a resolution for your business functions.

If I store all of my documents electronically, is that sufficient for backup purposes?

Not necessarily. You need to make sure you have a document storage system that is sufficiently secure from cyber attacks and data breaches. You also need to make sure that if your existing storage system fails for any reason, you have another way of accessing that data. You may accomplish this by keeping hard copies of important records, or by ensuring that your electronic data is sufficiently backed up.

WSBA Members

For more information and assistance from the WSBA on document retention, consider these resources available to WSBA-licensed legal professionals:

• Free Lending Library: Borrow from a selection of 400 books. You can register immediately online and start placing holds. Titles will be shipped to you automatically. Visit www.wsba.org/library to get started.
• Free Consultations: You can speak with WSBA staff in the Practice Management Assistance Program for personalized advice regarding your law firm business management. Visit www.wsba.org/consult to get started.
• Free Ethics Help: You can speak to WSBA staff regarding questions of ethical obligations or your professional responsibility. The phone number is 800-945-9722.
• Discounts on Software and Services: Through the Practice Management Discount Network, WSBA members receive discounts on a menu of software and services to help you improve your practice and client service delivery. Visit www.wsba.org/discounts to learn more.

For other WSBA resources and member benefits, visit www.wsba.org/MemberSupport.