Each story is different. A prominent, well-respected attorney develops dementia. With the assistance of family, friends, and the Tennessee Lawyers Assistance Program, the Board of Professional Responsibility petitions the Supreme Court to place the attorney on disability inactive status.
A young attorney disappears, abandoning his practice. Local judges notify the Board, who petitions the Supreme Court for the attorney’s temporary suspension.
The local bar association, with the assistance of the Board, petitions the local Chancery Court for appointment of an attorney to close the law practice.
In 2013, 145 attorneys were placed on disability inactive status, suspended, disbarred, disappeared, or died. Tennessee Supreme Court Rule 9 § 28 sets forth the process requiring attorneys disbarred, suspended, or recently transferred to disability inactive status to notify clients and counsel; return client files and property; refund fees; and withdraw from representation. However, attorneys often do not or cannot follow these required safeguards. In those instances, judges, attorneys, and family members are faced with the challenges of closing an attorney’s law practice.
Problems
When an attorney becomes unable to practice law, protecting clients’ interests is paramount. Notification of clients, courts, and counsel of the attorney’s inability to practice is critical to ensure that duties owed to clients, the public, and the legal system are protected. Client files should be collected; reviewed; and delivered to the client or the client’s new counsel. Attorney bank accounts including operating accounts, trust/IOLTA accounts, and other accounts must be reviewed, properly handled, and funds disbursed. Additionally, the interests of the attorney no longer able to practice should be protected to the extent possible.
Solutions
Historically, bar associations and altruistic attorneys in small towns and big cities across this state have assisted when an attorney’s practice was disrupted. Tennessee Supreme Court Rule 9 previously provided that the local presiding judge could appoint an attorney to inventory files and protect clients when an attorney was unable to continue practicing law. Beginning January 1, 2014, the Supreme Court has provided new protections and safeguards for an attorney’s interrupted practice in Tennessee Supreme Court Rule 9 § 29.
New Rule 9 § 29 allows the Board of Professional Responsibility, the Tennessee Bar Association, any local bar association, any attorney, or any interested person to commence a proceeding in the chancery, circuit, or probate court for the appointment of a receiver attorney to close the law practice of the affected attorney who’s unable to continue practicing law. Rule 9 § 29.2(a) defines an “affected attorney” as “an attorney who is licensed and engaged in the practice of law in this state and who has no partner, associate, executor or other appropriate successor or representative capable and available to continue or wind-down the attorney’s law practice.” A receiver attorney is the attorney appointed to close the affected attorney’s practice. The receiver attorney’s duties may include taking custody of and reviewing files, records, and bank accounts of the affected attorney; notifying clients, courts, and counsel of their appointment; taking custody of and acting as a signatory on bank, trust, and IOLTA accounts and disbursing funds. The receiver attorney has immunity and is entitled to reasonable fees for their service.
The appointment of the receiver attorney does not create an attorney-client relationship between the receiver attorney and the affected attorney’s clients; however, the attorney-client privilege does apply to all communications between the receiver attorney and the affected attorney’s clients.
The Board encourages all attorneys to designate in advance a receiver or successor attorney or make other arrangements to continue, sell, or close their practice. See Tenn. Sup. Ct. R. 8, RPC 1.17 and Tenn. Sup. Ct. R. 9 § 29. Additionally, an attorney should, as part of their competent representation of clients, maintain an up-to-date file containing conflicts checks; calendars, client information, and bank account information.
The Board of Professional Responsibility’s website has a sample Complaint for Appointment of Receiver Attorney and Order Granting Complaint for Appointment of a Receiver Attorney in addition to checklists for attorneys and individuals faced with closing a law practice.
The Chattanooga Bar Association has been asked on several occasions over the past 20 years to assist in the closing of a law practice, whether due to health issues, suspension, or disbarment. In every situation, the clients are needing representation because their case(s) haven’t ended, and they’ve already paid the legal fees. If you’re willing, at any time, to step up and take an existing case of an attorney who becomes unable to practice, please let me know. It becomes our responsibility to help distribute these cases to attorneys. If you’re willing to help in any way, please notify me by sending an email to LHood@chattanoogabar.org.
Some information from Sandy Garrett, Chief Disciplinary Counsel, Board of Professional Responsibility of the Supreme Court of Tennessee. Reprinted with permission from the Knoxville Bar Association’s June 2014 issue of DICTA.