Canadian Lawyer

20 M A R C H 2 0 1 6 w w w . C A N A D I A N L a w y e r m a g . c o m eff Phillips didn't rush into retirement when he began thinking about how he would wind up his sole practice in London, Ont. Selling seemed like a good idea as his clients would get continuity, but he also wanted to protect his staff and ensure the successors had the similar philosophical approach. "I had to have the right situation," says Phillips during a call from Florida where he visits while continu- ing to work part time with Carlyle Peterson Lawyers LLP. The agreement was that he work full time for six months after the sale, but that was three years ago. Phillips enjoys the new arrangement and the ability to bounce ideas off other lawyers, so he continues to work part time and is able to take time when he wants it. "Having been on my own for so long and having practised for 35 years, it was a little difficult coming into a firm with other lawyers," he says. But it didn't take long for him to appreciate the benefits of the new situation. The deal saw the well-established Carlyle Peterson absorb his practice, which involved real estate, estates, and some corporate work, and buy him out over a period of time, depending on the income generated. Having not rushed into the deal and being part of the transition made the whole process smooth, even from the regulatory point of view. Now in his annual filings with the law society, Phillips files as an associate instead of a sole practitioner. Many Canadian law societies post guidelines that should be followed when closing or selling a practice. In Ontario, the Rules of Professional Conduct demand that a lawyer not withdraw from active representation of a client without good cause and reasonable notice. There are also rules involving the sharing of fees or referrals, but as long as they comply with the rules, lawyers may make an arrangement to pay for a percentage of revenue generated from a sold practice. Alberta's checklist for winding up a practice includes dealing with any will that names the selling lawyer as executor or trustee. Documents held on undertakings or trust conditions will also require instructions from the necessary parties. British Columbia has one checklist for winding up law firms and another for sole practices. They include notifying the law society of date of termina- tion, disposition of open files, closed files, and corporate records, as well as valuable documents and wills. Generally, the selling firm must lay out all options for the clients so they know they can go elsewhere. Law societies may have different requirements about trust accounts. They can be closed and transferred to a new lawyer or the selling lawyer can transfer the signing authority over to the new lawyer. The due diligence must also include vetting for possible conflicts in the client files. And, as in the sale of any business, it is subject to applicable privacy legislation concerns. Attention must also be given to closed files so they are kept for the required amount of time and properly disposed of after that. The tough part, says Allan Fineblit, is a law firm doesn't have the L AW O F F I C E M A N A G E M E N T JEANNIE PHAN Planning for a sale Retiring, or just wanting to sell your practice, requires thought, planning, and knowing the rules. By Marg. Bruineman J

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