South Carolina Lawyer
SC Lawyer, November 2009, #1.
When You Can't Do It All: Small Practice Short-Term Disability Planning
South Carolina Lawyer November 2009 When You Can't Do It All: Small Practice Short-Term Disability Planning By Linda Farron Knapp and Thomas A. Gore She started her own firm with 13 years of legal experience, a solid reputation, a multitude of law books, several thousand dollars and a very supportive spouse. Slowly and surely, she built a thriving practice-hiring a qualified staff, relocating to a larger space, and diligently implementing contingency plans for everything from cash flow shortages to computer server crashes. She was ready for anything, except an unexpected medical diagnosis: lumbar disc disease-a back and nerve disorder that required strong pain medications and months of physical therapy. After notifying clients, scaling back hours, enlisting the help of fellow attorneys and relying on her staff to streamline operations, she was eventually able to return to a full-time schedule after tapping a fortuitous line of credit. However, the message was clear for this previously infallible, work-around-the-clock attorney (who happens to be one of your co-authors): life is tenuous, and disability planning is essential.
Solo practitioners and small firm attorneys are notorious workhorses who value their independence and take pride in their dedication to clients. Comprising approximately 60 percent of the South Carolina Bar and 74 percent of the national private legal sector, these dedicated entrepreneurs are often more likely to plan for their own deaths than a serious disability. What would happen if you, as a solo practitioner, had a major accident or a prolonged illness that led to temporary or long-term disability? It's also common to underestimate the implications of losing a loved one or suddenly having to divert time and energy toward caring for a close family member due to advance age or disability. See Richard E. Meyers, Death Comes to the Attorney, NAELA Journal Vol. 2 2007 No.7 and Wallace, Richard H. Rules, Rules, Rules, SC Solo and Small Firm Section Electronic Newsletter May 2008. It all comes back to protecting the two facets that ultimately influence most aspects of life and law as a business-your income and your clients' interests.
It's never easy to accept that the worst can happen to you, and disabilities are insidious by nature. It's not always the archetypal car crash-more common causes are medical in nature, such as cancer, diabetes, blood disorders and physical disabilities such as back problems and chronic pain. Depression and other nervous problems can also impair basic functionality. For the purposes of this article, we will primarily focus on short-term disabilities lasting up to a year, the time period when you have the best chance of returning to a valuable, viable practice.
Why plan for a disability?
First and foremost, there is an ethical duty to plan to protect the interests of clients. The Official Comment to RPC 1.3 states, "Cf. Rule 31 of the South Carolina Rules for Lawyer Disciplinary Enforcement provides for court appointment of a lawyer to inventory files and take other protective action in absence of a plan providing for another lawyer to protect the interests of clients of a deceased or disabled lawyer" (emphasis added). An RPC disciplinary involvement where attorney competency is at issue starts with a petition by the disciplinary board; a public appointment by the S.C. Supreme Court, granting the appointed attorney(s) control over the firm's files and business accounts for up to nine months; notice in a paper of general circulation in all counties in which the attorney practices for three consecutive weeks; and written notice to all your clients and malpractice insurance carrier. (For a more complete discussion on disciplinary matters, see Guignard, James S., Slowdown, Retirement and Exit Plans: Professional Responsibility When Competency is in Doubt, S.C. Bar CLE Senior Lawyer...