Succession Planning Rule 781 Goes to Illinois Supreme Court

Last weekend, at the Illinois State Bar Association Annual Meeting, the ISBA Special Committee on Succession and Transition Planning proposed Rule 781 to the ISBA Assembly. With the support of the ISBA Board of Governors and the Special Committee, the Assembly discussed the proposed Rule before voting to approve it and submit it to the Illinois Supreme Court for consideration.

New Rule 781 would require all Illinois lawyers actively engaged in the private practice of law to name a “designated representative” with their yearly ARDC registration or certify that they have made such a designation in a succession plan, will, trust, partnership, or other corporate document.

The “designated representative” can include an active Illinois attorney in good standing, an Illinois law firm, or an established state, county, or municipal bar association that includes active Illinois attorneys with an established program.

The goal of Rule 781 is to create a short-term solution for clients in the event the designating lawyer dies, becomes disabled, disappears, or otherwise abandons his or her law practice.

According to the rule, this representative is authorized, but not required to, to act in a fiduciary capacity to do the following tasks on a temporary and limited basis:

• discuss with the attorney’s office personnel, family members, or other attorney representatives (such as a guardian or executor) to obtain information as may be necessary to accomplish the purposes of this Rule;
• take reasonable steps to secure the lawyer’s files, office, client property, and accounts;
• review the lawyer’s files, calendar, and records to identify litigation or time sensitive matters;
• notify clients of attorney’s death or disability, including making arrangements for the return of client files or obtaining substitute counsel;
• notify courts and other tribunals in which client matters are pending, and seek stays of proceedings as may be warranted to preserve client rights or interests;
• if necessary, and upon petition to, and grant of authority by, a court of proper jurisdiction, serve as successor signatory for any client trust or operating accounts maintained by the lawyer;
• if necessary, and subject to the grant of authority identified in (e)(6) above, utilize the attorney’s operating accounts to manage the office, including retention of staff or others pending sale or closure;
• if necessary, audit and distribute, subject to the grant of authority identified in (e)(6) above, client funds held in trust;
• if necessary to carry out any of the authorized activities hereunder, a designated representative may seek an order from the chief judge of the judicial circuit in which the attorney practiced confirming the death, disability, disappearance, or practice abandonment of the attorney;
• if necessary, seek the appointment of a receiver under Rule 776; and
• consult with the attorney’s office personnel, family members, or other representatives (such as a guardian or executor) as may be appropriate to wind down, sell, or close the attorney’s practice.

Proposed Succession Rule 781 would outline the limited actions of a designated representative to serve as a temporary safety net until a permanent solution to the designating lawyer’s unavailability can be developed.

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