Maryland Bar Bulletin
Publications : Bar Bulletin : April 2007




How Long Can I Keep Doing This?

~Thinking about retiring from the practice of law~

Over the past few years, I have been receiving more and more calls from practitioners who are “thinking” about retiring. They have been practicing for many years, but are thinking that they may want to start considering the steps to take if they want to stop practicing.

This month’s column will start to discuss “planning” steps to retire. Future columns will discuss other retirement issues. I will use the word retirement for the sake of word counts, though it can easily be applied to any voluntary closing of a practice. Although the focus of the column will be for those practitioners who are just in the “thinking” stage, much of the information applies to anyone voluntarily considering closing a practice for other reasons. Some of those reasons will include (but are not limited to): accepting a position with a firm, private company or government agency; judicial appointment, moving to another state or other voluntary reasons.

Needless to say, the earlier you can start thinking and planning for retirement, the easier and more successful the transition. There are both broad and personal issues and practical “how to” issues that need to be addressed. Both are critical to consider, even if most solo and small firm practitioners focus more on the “how to’s.”

Broad and Personal
When starting to consider retirement, you need to take a hard look at your finances. According to Boston College’s Center for Retirement Research (, you will need between 65 percent and 75 percent of your current income to maintain your current standard of living. That is only an average and makes the assumption that you have no mortgage, no major expenses and have decent health care coverage. Your percentage may be different, but it will not be much less than 70 percent. You must determine now if you will have this type of income for the next 10, 20 or even 30 years if you will not be practicing law.

This financial information may even help you decide whether you want to just close up your practice or attempt to sell your practice. If you are in a small firm, you need to review your agreement to determine what benefits, if any, you receive from your firm. You should have a financial advisor, be it a CPA or a tax attorney, to guide you in these areas.

This will also be a good time to take a look at how you are spending your money to determine what, if any activities or habits can or should be changed. (Notice I said changed and not eliminated.) In addition to reviewing your future income and expenses, you need to think seriously about “what you want to do when you grow up.” How do you plan to use the 60 -70 hours a week that you used to spend on your practice? Will your future activities require more or less resources? If more, this may be a good time to start considering a budget if this is something you have not done. It may be a good time to start keeping track of exactly where you are spending your money.

If you are considering selling your practice, you need to familiarize with Maryland Rule 1.17 Sale of a Law Practice. Again, you need to have a CPA or other professional who has worked with selling a law practice to help with this process. A third party will be able to help you confidentially determine who may be interested in purchasing your practice and determine its “value.” According to an article by Jay Foonberg on selling a law practice on, “The urgency or lack of urgency in buying or selling may affect the price. Hopefully, the lawyer will have begun the process of selling the practice to another lawyer or law firm as part of a retirement plan while there is time for give and take negotiation with a potential buyer.” (A PDF copy of the article can be found at under “Closing a Law Practice”.)

There are other ways to close your practice for retirement. You can simply finish all your work and turn out the lights. You can also begin to transition a younger associate or partner to take over your practice. Just as with selling your practice, the more planning, the easier the process.

Client Files
Regardless of which method you choose for closing your practice, there are certain tasks which must be completed, such as disposing of client files, contacting and informing clients and other administrative tasks.
Ideally, you had a policy for dealing with the disposition of client files. Unfortunately, there is no simple answer to the question, How long do I need to keep files? The answer: It depends. The MSBA’s Ethics Committee has a number of opinions on the disposition of client files, including 94-28 -Retention of Closed Files; 93-39-Disposition of Client Files; 92-2 - Notification to Ex-Clients of Departure from Law Practice; Disposition of Remaining Escrow Funds; 89-58 - Attorney/ Personal Representative’s Duty regarding files of Attorney/Decedent; 85-77 - Disposition of Files.

A copy of each of these opinions is available online for MSBA members at You may also receive a copy of articles on client retention policies by sending an e-mail to Pat Yevics at
According to Mel Hirshman, Bar Counsel, Attorney Grievance Commission, at a 2005 Annual Meeting Program on Retirement For Practitioners:

  • You must retain your records for five years after termination of representation, whether you sell your practice or not.
  • You must notify your clients and offer them the portions of the file to which they are entitled.
  • Files not retained must be properly destroyed. (A copy of the entire PowerPoint presentation can be e-mailed to you by contacting Pat Yevics at

Ideally, all work will be completed before your departure. However, if work is not going to be completed before your departure, you will need a client’s permission before turning any file over to another attorney. You must tell clients that they have the right to not go with the attorney. You may decide to give clients the names of a number of attorneys so that they can choose.
You should make copies of any items in the file which you may need in the event of a malpractice claim. For a checklist of what other items need to be addressed, visit the LOMA website at, under “Closing a Practice”. Also, these additional MSBA Opinions discuss the closing of a practice:

  • 80-42 Retirement from Solo Practice Guidelines
  • 89-26 Safekeeping Client’s Funds: Funds of Unidentified Client
  • 96-8 In Transaction Whereby One Law Firm Proposes to Purchase Another Law Firm With Cash Payments Over a Term of Years, May the Law Firm Purchase Agreement Contain a Non-Competition Provision?

Also, the MSBA Senior Lawyer Section and the MSBA Solo and Small Firm Practice Section will cosponsor a session, “The Secret to Your Future Success: Preparation, Preparation, Preparation and a Good Retirement Strategy”, on June 14, 2007, at the MSBA Annual Meeting in Ocean City. This session will give you practical tips on how to patch the roof while the sun is still shining, so you can be certain that your second season of success was as comfortable as your first. Topics will include options and opportunities before and after retirement and long-term care insurance as a “Patching” Option.

This may not be the most exciting session being presented at this time, but it is probably the most important.

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Publications : Bar Bulletin: April  2007