When Closing Up Shop, Don't Cut It Too Close

In my previous column, I discussed the importance of spreading the word when it comes to your retirement, and to whom the word should be spread: clients, the media and other parties, such as banks, trustees and bar associations.

But how much time and preparation does such a momentous move require? Though the answer varies from lawyers to lawyer, one thing is safe to assume: it's a lot.

Handling the closing of your practice in a thorough yet timely fashion takes great patience and impressive planning. If you've ever moved your practice from one office to another, you know that it's a decidedly difficult process, requiring considerable thought, pre-planning and coordination well in advance of the actual move.

The complexity and organizational requirements of closing a law practice are similar. Each requirement has a number of different yet interrelated elements that must be present to succeed.

Closing a practice is a complicated process for which you ideally should allow six months to a full year to accomplish. Lawyers accustomed to the rush of meeting a 5 p.m. filing deadline at the courthouse tend to take for granted the weeks and months of effort required to reach that point in the case. The same thing is true of the time it takes to clean things up, tie up loose ends, and perform all actions necessary to close up shop.

Speaking again of those you must be sure to inform, exactly what is your responsibility to those parties? It can be massive.

Consider the time and effort you must invest in getting together severance packages, return of records, final bills, fulfillment of leases, mail forwarding — everything up through and including the move of any office furniture and equipment that you want to keep.

Making sure that you get everything done right requires creating a timeline that includes descriptions of, and completion dates for, everything that you need to do, in the order that you need to do them.

Build the timeline based on a balance of ethical considerations relating to the affected people and practical considerations relating to your business. Your timeline must, at a minimum, include the date that you decide to close the practice, the date that your current lease runs out, and the date that you would like to have all steps in the process completed.

Establishing a timeline at the beginning — and keeping it up-to-date as events unfold — will provide an essential tool to help focus your efforts and track the various elements of the closing, up to the moment that the practice's doors are closed.

Closing a law practice does not have to be overly complex, but as with selling and transferring a practice to a buyer, there are serious consequences if one or more steps are left out.

In future columns, I'll delve deeper into potential dangers of a sloppy closing, including the malpractice angle, and discuss what is typically involved for lawyers to be assured that they've done all they need to do before closing their doors.