the practice ends and erp - isba mutual · 2018-10-17 · the practice ends and erp here today,...
TRANSCRIPT
The Practice Ends and ERPHere Today, Gone Tomorrow:Succession or Disaster when a Practice Ends
What we will cover today -
▶Overview of succession planning and why it’s important
▶Backup Lawyer arrangements
▶Why lawyers’ professional liability insurance and tail options need to be understood
Current Succession Trends▶ Solo lawyers▶ 29% of all practicing lawyers▶ 84% have no plan
▶ Lawyers practicing in firms with between 2 to 10 lawyers▶ 56% of all practicing lawyers▶ 80% have no plan
▶ Nearly 70% of ISBA Mutual policyholders are solo practitioners
Concerned Stakeholders
▶ISBA Special CommitteeSuccession and Transition Planning
▶ARDC John Cesario
▶ISBA Mutual Insurance CompanyAdded policy provisions for free tail upon death, disability and retirement
Causes of the Problem▶ Aversion to thinking about the end
▶ Procrastination
▶ Tendency to help others before helping yourself
▶ No one else can do what I do
No Plan – Who Helps?
Consequences of Not Having a Plan▶How will you be remembered?
▶By your clients
▶By your colleagues
▶By your family
What Happens When Nobody Helps
▶ARDC Cometh, Supreme Court Rule 776
▶Court-Appointed Receivership
▶John Cesario – Senior Counsel▶ [email protected]
Know Your Resources
▶ARDC - https://www.iardc.org/Succession%20Planning.htm
▶ IBF - https://www.illinoisbarfoundation.org/warren-lupel-lawyers-care-fund
▶ ISBA - https://www.isba.org/practicehq/winddown
▶ IOLTA - http://www.ltf.org
▶Your Insurance Carrier – ISBA Mutual 866-473-4722
ARDC
▶Online Resources to Create Your Plan▶ Succession Planning Training Videos
▶Documents to Consider▶ Office Checklist▶ Limited Power of Attorney▶ Law Practice Coverage Agreement▶ Retainer Agreement Inclusion Language
Illinois Bar Foundation
Warren Lupel Lawyers Care Fund
▶Financial Support Provided For:
▶Funeral Costs
▶Medical Bills
▶Living Expenses
Illinois State Bar Association
▶Special Committee on Succession and Transition Planning
▶ https://www.isba.org/committees/successionandtransitionplanning
Make a Plan
▶Written agreement with another lawyer/law firm▶Maintain an office manual▶Add instructions to will/estate documents▶Include language in client engagement letters ▶Arrange for access to bank and trust accounts
▶Review your plan annually
Designated Attorney Representative
▶Proposed Supreme Court Rule 781▶Protect client interest▶Authorizations▶Liability is limited
Backup Lawyer System
▶What to look for in a Backup Lawyer
▶Initial setup of Backup Lawyer system
▶Be sure to review annually
Type of Policy Forms
▶Claims Made and Reported Policy: your coverage and limits of liability are only available during the policy term or any extended reporting period
▶Occurrence Policy: your coverage and limits of liability survive after the expiration of the policy
What is Tail Coverage?
ERP is known as Extended Reporting Period, or Tail Coverage
Insurance - Extended Reporting Period
▶Extends the period of time to report a claim after a Claims Made and Reported policy expires
▶It is not renewable
▶It is not cancellable
▶It is not an extension of the insurance coverage
Why you should get Extended Reporting Period Coverage:
▶Death – Free
▶Disability – unable to practice law – Free
▶Retirement – Free
▶Military Service – Free
▶Firm is Dissolving or Merging - Purchase
The Timeline – Claims Dates
Prior Acts
Effective Date
Expiration Date
Occurrence/Wrongful Act Date
Claim Made Date
Report Date
The Timeline – Claim Reporting No Tail
Prior Acts Date
Effective Date
Expiration Date
CurrentPolicy PeriodPolicy PeriodPolicy Period
Coverage Period NO coverage, NOT reportable
The Timeline – Claim Reporting with Tail
Prior Acts Date
Effective Date
Expiration Date
CurrentPolicy PeriodPolicy PeriodPolicy Period
Coverage Period NO coverage, IS reportable
Tail or Extended Reporting Period
Extended Reporting
Date
Summary
▶Succession planning is important, get a Backup Lawyer
▶Resources are available to create a plan
▶Activating an extended reporting period endorsement is critical
▶Protect your legacy
Thank You