THE COURTS
Title 204—JUDICIAL SYSTEM GENERAL PROVISIONS
PART V. PROFESSIONAL ETHICS AND CONDUCT
[204 PA. CODE CHS. 81 AND 87]
Proposed Amendments to the Rules of Professional Conduct and Disciplinary Board Rules and Procedures Relating to Lawyer Succession Planning
[54 Pa.B. 1041]
[Saturday, March 2, 2024]Notice is hereby given that The Disciplinary Board of the Supreme Court of Pennsylvania (the ''Board'') is considering recommending to the Supreme Court of Pennsylvania amendments to the Rules of Professional Conduct and Disciplinary Board Rules and Procedures to require that every active lawyer in private practice in Pennsylvania maintain a written succession plan.
EXPLANATORY REPORT New Rule of Professional Conduct 1.20
Pennsylvania's current Rules of Professional Conduct do not mandate that private practice lawyers maintain a succession plan,1 yet the Board recognizes that such planning is essential. The future is unpredictable and lawyers must strive to lessen the impact of unexpected interruption to their relationships with clients by proactively protecting the clients' interests in the event of the attorney's death, disability, or other unanticipated absence. A succession plan helps ensure a smooth transition of client files and ease chaos in times of crisis.
Proposed Rule of Professional Conduct (''RPC'') 1.20 governs lawyer succession planning. Subdivision (a) provides that every active lawyer in private practice in Pennsylvania have a written succession plan. This subdivision sets forth the minimum requirements of the plan, which should include: (1) the identity of the lawyer or law firm designated to carry out the plan; (2) the location of information necessary to access the designating lawyer's pertinent records; and (3) information on the designating lawyer's trust and operating accounts and corresponding records. Subdivision (b) requires that the designating lawyer notify the assisting lawyer and obtain that lawyer's written consent to act as the assisting lawyer. The designating lawyer must also inform clients of the existence of the succession plan. Subdivision (c) addresses the liability of the assisting lawyer, and provides that the rule is not intended to create liability, but rather any such liability is determined by the terms of the agreement between the designating lawyer and the assisting lawyer.
The commentary following the rule text provides guidance to practitioners on implementing a succession plan tailored to the lawyer's particular circumstances and offers examples to demonstrate that there can be flexibility in crafting the plan. As well, the commentary gives guidance to lawyers who practice in firm settings that include other Pennsylvania-admitted lawyers in good standing, that they may designate the firm as the successor, and reminds lawyers of the obligation to notify clients of the succession plan, preferably by including the information in the engagement or retainer agreement.
Disciplinary Board Rule § 87.7(b)
A revision to the Disciplinary Board Rules would permit Office of Disciplinary Counsel to ask respondent-attorneys about their compliance with new Rule 1.20 as part of the process of sending a DB-7 Letter (Request for Statement of Respondent's Position) during ODC's investigation of a matter, as well as request that the respondent- attorney produce the succession plan. This proposed rule change gives Disciplinary Counsel the opportunity to discuss the requirements of succession planning with a respondent-attorney and allow for an educational opportunity.
Interested persons are invited to submit written comments, suggestions or objections by mail, email or facsimile to the Executive Office, The Disciplinary Board of the Supreme Court of Pennsylvania, 601 Commonwealth Avenue, Suite 5600, PO Box 62625, Harrisburg, PA 17106-2625, facsimile number (717-231-3381), email address Dboard.comments@pacourts.us on or before May 1, 2024.
By The Disciplinary Board of the
Supreme Court of PennsylvaniaJESSE G. HEREDA,
Executive Director
Annex A
TITLE 204. JUDICIAL SYSTEM GENERAL PROVISIONS
PART V. PROFESSIONAL ETHICS AND CONDUCT
Subpart A. PROFESSIONAL RESPONSIBILITY
CHAPTER 81. RULES OF PROFESSIONAL CONDUCT
Subchapter A. RULES OF PROFESSIONAL CONDUCT § 81.4. Rules of Professional Conduct.
The following are the Rules of Professional Conduct:
CLIENT-LAWYER RELATIONSHIP (Editor's Note: The following rule is proposed to be added and is printed in regular type to enhance readability.)
Rule 1.20. Lawyer Succession Planning.
(a) Succession plan. Every active lawyer in private practice in Pennsylvania (the ''designating lawyer'') must have a written succession plan, either alone or as part of a law firm plan, specifying the steps to be taken in the event of the designating lawyer's extended incapacity from practicing law, or the designating lawyer's disability or death. At a minimum, the plan must include the following: (1) the identity of the lawyer or law firm designated to carry out the terms of the succession plan (the ''assisting lawyer''); (2) the location of information necessary to access the designating lawyer's current list of active clients, client files, and other client information including computer and other relevant passwords; and (3) information on the designating lawyer's trust and operating accounts and corresponding records.
(b) Notice of plan. The designating lawyer must notify the assisting lawyer of, and the assisting lawyer must consent to, the designation as an assisting lawyer in a writing signed by the designating lawyer and the assisting lawyer, or by electronic communication acknowledged by both the designating lawyer and the assisting lawyer. Designating lawyers must also notify their clients of the existence of the succession plan.
(c) Liability of Assisting Lawyer. If the assisting lawyer forms an attorney-client relationship with the designating lawyer's clients, the assisting lawyer will be subject to the existing rules and duties attendant to the attorney-client relationship. Otherwise, this rule is not intended to create liability between the assisting lawyer and the clients of the designating lawyer. Any liability between the designating and assisting lawyers shall be determined by the terms of the agreement between them.
Comment: (1) When a lawyer is unexpectedly unable to practice for an extended period of time, the lawyer's clients, staff, and practice are at risk of significant harm. By taking proactive steps to plan for an unexpected interruption in practice, including implementation of a succession plan, a designating lawyer can avert or mitigate such harm. The goal of succession planning is to protect the interests of the designating lawyer's current clients by creating and implementing a succession plan to take effect when the designating lawyer is unable to practice law due to extended incapacity, or the lawyer's disability or death. The incapacity of the designating lawyer may be temporary or permanent.
(2) The level of sophistication of a succession plan should be determined by each designating lawyer's or law firm's circumstance. For example, as part of the succession plan the designating lawyer can arrange for the assisting lawyer to take steps to promptly distribute the client matters, including any trust funds due to the clients, directly to the clients or to other lawyers chosen by the clients. Alternatively, the designating lawyer may draft the plan such that, with the clients' consent, the assisting lawyer will assume responsibility for the interests of the designating lawyer's clients, subject to the right of the clients to retain a different lawyer or law firm other than the assisting lawyer. Some designating lawyers may choose to designate more than one lawyer or a pool of lawyers as the assisting lawyer. These examples are not meant to be exhaustive or exclusive, but rather to suggest that there is great flexibility allowed by the rule in the crafting of the succession plan.
(3) If the designating lawyer is a member of a law firm that includes other Pennsylvania-admitted lawyers in good standing, the designating lawyer may designate the firm as the assisting lawyer.
(4) The designating lawyer must notify his or her clients of the existence of the lawyer's succession plan. Preferably this should be done by including the information in the engagement or retainer agreement.
Subpart C. DISCIPLINARY BOARD OF THE SUPREME COURT OF PENNSYLVANIA
CHAPTER 87. INVESTIGATIONS AND INFORMAL PROCEEDINGS
Subchapter A. PRELIMINARY PROVISIONS
COMPLAINTS § 87.7. Notification to respondent-attorney of complaint and duty to respond; duty to produce Pa.R.P.C. 1.15's required records and effect of failure to produce.
* * * * * (b) Transmission of notice. Except as provided in subsection (a) of this section, the district office shall prepare and forward to the respondent-attorney Form DB-7 (Request for Statement of Respondent's Position), advising the respondent-attorney of:
(1) the nature of the grievance and if the investigation has not been initiated by the Office of Disciplinary Counsel pursuant to § 87.1(b) (relating to initiation of investigations), the name and address of the complainant; and
(2) the requirement that the respondent-attorney respond to the allegations against the respondent-attorney by filing with the district office a statement of position. Unless a shorter time is fixed by the Chief Disciplinary Counsel in such notice, the respondent-attorney shall have 30 days from the date of such notice within which to file a statement of position in the district office.
The notice requirements of this subdivision (b) shall be applicable to any Form DB-7A (Supplemental Request for Statement of Respondent's Position), in which case the notice shall advise the respondent-attorney of the requirement that the respondent-attorney respond to the supplemental allegations by filing with the district office a statement of position with respect thereto.
The Form DB-7 may inquire as to a respondent-attorney's compliance with Rule of Professional Conduct 1.20 (relating to lawyer succession planning) and may request that the respondent-attorney produce the writing required by subdivision (a) of Rule 1.20.
* * * * *
[Pa.B. Doc. No. 24-252. Filed for public inspection March 1, 2024, 9:00 a.m.] _______
1 Rule of Professional Conduct 1.3, Comment (5) provides that, ''[t]o prevent neglect of client matters in the event of a sole practitioner's death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer's death or disability, and determine whether there is a need for immediate protective action.''
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