Texas Bar Journal • February 2025

Succession Planning

Preparing for the Unexpected.

Written by Richard A. Cantu

Although my intention was to write an article about general law practice management tools for solo or small-firm attorneys, I remembered an inspiring speech
delivered by former State Bar of Texas President Laura Gibson well over a year ago, about an often overlooked but important firm management tool: emergency management succession planning.

As attorneys, we spend countless hours, to the best of our ability, assisting clients with their cases so that we may protect their interests and produce the best possible results. Often, we counsel clients on situations and circumstances wherein the unexpected death or disability of a person or member of an entity should
be contemplated and incorporated into their course of action. However, how often do we think of what would happen to our client’s case in the event of our unexpected death or disability? What about the burden we would place on our heirs and firm colleagues if we die or suffer a disability without a plan?

Fortunately, the State Bar of Texas Law Practice Management Committee has formulated a comprehensive succession planning toolkit designed to assist attorneys who are solo practitioners with the appointment of a voluntary custodian attorney who can assist with the emergency management of the practice and the protection of the attorney’s clients and family members in the event of an unexpected practice cessation. I recommend that every solo attorney consider implementing a succession plan, if you have not done so already. To that end, I have assembled some information on the topic and suggestions that may assist you when contemplating succession planning, with an emphasis on appointing a voluntary custodian attorney.

RULES AND OPINIONS

• Prior to July 1, 2021, when an attorney died or became inactive, leaving an active case for which no other attorney was responsible, Texas Rules of Disciplinary Procedure Rules 13.01 through 13.03 Part XIII required the personal representative of the estate of the attorney, persons having lawful control of the client’s file, such as employees of the attorney, the Office of Chief Disciplinary Counsel, and in some instances, the client, to take action so that the court can assume jurisdiction over the attorney’s law practice and appoint an attorney to handle matters “to prevent prejudice to the client” and ultimately “[a]rrange for the surrender or delivery of the client’s papers, files, or other property” to the client.¹

• Opinion No. 627 of the Professional Ethics Committee for the State Bar of Texas considered a question about the law firm’s responsibility to preserve or dispose of a former client’s files after the attorney who represented the client left the firm. In reaching its conclusion, the committee discussed and sought guidance from Texas Disciplinary Rules of Professional Conduct Rules 1.05(b)(1) and 1.05(b)(3) (protection of client information); Rule 1.14 (handling of client’s money and other property); and Rule 1.15(d) (handling of client’s files when a lawyer’s representation of the client in the matter terminates) and concluded in part that “closed files of current or former clients held by a lawyer or law firm are held by certain basic principles”: i) “confidential information of clients or former clients must be protected from unauthorized disclosure”; ii) “except when important interests of other persons or the client would be compromised, a lawyer or law firm possessing closed client files should turn them over to the client if requested by the client to do so”; and iii) “reasonable steps (such as a brief visual review of physical files) have been taken to avoid destruction of items of client property, such as currency, bonds and original deeds, that might be included in the files to be destroyed.”²

• In July 2021, the Texas Rules of Disciplinary Procedure were amended or revised to include Rule 13.04 titled “Voluntary Appointment of Custodian Attorney for Cessation of Practice,” which states in part that “[i]n lieu of the procedures set forth in Rules 13.02 and 13.03, an attorney ceasing practice or planning for the cessation of practice (‘appointing attorney’ for purposes of this Rule) may voluntarily designate a Texas attorney licensed and in good standing to act as custodian (‘custodian attorney’ for purposes of this Rule) to assist in the final resolution and closure of the attorney’s practice.”³

• Rule 13.05 of the Texas Rules of Disciplinary Procedure provides for the events that operate to terminate voluntarily appointed custodianship.⁴

DESIGNATION OF CUSTODIAN ATTORNEY
The objective of the designation is to facilitate access to client files and records so that the custodian attorney may be able to notify the deceased or incapacitated attorney’s clients that the appointing attorney is no longer practicing, informing them of the opportunity to hire a new attorney, and making arrangements to return or dispose of their files or other property. It is important to note that in the comments to Rule 13.04, “[p]erforming the duties of a custodian under [Rule 13.04] does not create a client- lawyer relationship.”⁵ However, the rule also states that “[i]f a lawyer serving as a custodian assumes representation of a client, the lawyer’s role as custodian terminates, and the lawyer’s actions are subject to the Texas Disciplinary Rules of Professional Conduct regarding the client-lawyer relationship.” Moreover, “[t]he privileges and limitations of liability contained [in Rule 13.04] shall not apply to any legal representation taken over by the custodian attorney.”⁶

The designation of the custodian attorney may be accomplished by completing and submitting an electronic designation form via an online portal found on the State Bar of Texas website. Go to texasbar.com/succession, and you will find the toolkit, guides, information, and an instructional video on how to complete the form.

IMPLEMENTATION OF THE PLAN
The process of determining who to designate involves careful consideration. Communicate with each potential designee to determine if they would be willing to serve as your custodian attorney and to discuss their role. Consider designating alternate custodian attorneys in the event the original designee is unable or unwilling to serve.

Once your custodian attorney and alternate(s) have accepted the designation and you have submitted the electronic designation form, consider meeting with the custodian attorney and alternate(s) along with a member or members of your law firm who will have access to the data and information the custodian will require so that everyone may be cognizant of what to expect.

You may also want to discuss Rule 13.04, which includes a list of some of the duties that will be assumed by the custodian attorney. In addition, the custodian attorney should be informed that save and except intentional misconduct or gross negligence, “no person acting as custodian attorney under [Rule 13.04] shall incur any liability by reason of the actions taken pursuant to this Rule.”⁷

In addition, assemble and regularly maintain a description of the following information and documents in a format that may be easily delivered to the custodian attorney, if necessary:

• A list of active files and the location of the respective files, whether they are located in a file cabinet, stored on the hard drive, or stored elsewhere.

• A list of the client’s contact information, including the contact person’s name, address, telephone number(s), and email address(es).

• A list of files with monies held in deposit in an IOLTA account, including a summary of accounts.

• A calendar of critical dates, including deadlines and statutes of limitations, if applicable for each file.

• A list of passwords and location of keys that the custodian attorney will need to access the files, client information, and other data pertaining to the files.

Finally, consider updating your attorney-client fee agreement to include terms, agreements, or information concerning your plan(s).

This exercise may also help you reorganize, develop, and manage your practice more efficiently. Please note that there are certainly many other issues or factors not discussed or included in this article that will most likely need to be considered, including but not limited to the attorney’s family or estate and the probate court when dealing with these unfortunate and unexpected events. As of the date of this publication, there are numerous articles, continuing legal education seminars, information and resources, especially those offered by and presented by the State Bar of Texas, that are available online to assist individual attorneys and law firms in preparing for and addressing the roles and responsibilities of the attorney when it comes to incorporating a succession plan into their practice. Finally, for additional information or specific questions on succession planning, I recommend that you contact the State Bar Succession Planning Program at 512-427-1300.

RICHARD A. CANTU is president of the Law Office of Richard A. Cantu, a small firm focused on real estate law matters. He is the recipient of the 2024 Terry Lee Grantham Memorial Award from the Texas Bar Foundation, a fellow of the Texas Bar Foundation, a current member of the State Bar’s Real Estate Forms Committee and Real Estate, Probate & Trust Law Section, a former director of the Hidalgo County Bar Association and Hidalgo County Young Lawyers Association, and a current member and former co-chair of the Real Estate Law Section of the Hidalgo County Bar Association. Cantu grew up in the Rio Grande Valley and received a Juris Doctor from Texas Southern University Thurgood Marshall School of Law and a bachelor’s degree from Texas A&M University in College Station.