Opening and closing
Setting up a practice on your own is pretty straightforward. Bringing a practice to an orderly close is where good planning pays off. Sorcha Hayes provides a regulatory overview of what you need to know – and how to plan for emergencies
When it comes to commencing a practice, the Irish adage is incredibly apt: ‘Tús maith, leath na hoibre!’ – a good start is half the work.
Opening a firm well means getting the essentials right from day one – clear governance, robust client-care and complaints pathways, professional indemnity in place, and disciplined financial and records systems.
A thoughtful start reduces regulatory risk, protects clients, and gives your new practice the resilience it will need when day-to-day pressures begin to bite.
Thankfully, the regulatory requirements for opening your firm are relatively straightforward.
Opening up
Any solicitor may open a solicitor’s firm with a current practicing certificate (PC), a qualifying policy of professional indemnity insurance (PII) confirmed by your broker using our online PII portal, and a completed ‘commencement in practice’ form filed with the Law Society.
In addition, a copy of your firm’s proposed letterhead and notepaper, information on the solicitors in the firm, your proposed financial year-end, and reporting accountant details will need to be provided with your application.
Firm letterhead and notepaper – in accordance with regulations, firm notepaper must list the names of all solicitors in the firm that currently hold a PC – differentiating between principals and non-principal solicitors.
Non-practising solicitors and non-solicitors can be included if their status is clearly stated. Any association with another firm should be made clear.
Partners and responsibility – for regulatory purposes, there is no distinction between salaried and equity partners. All partners carry joint and several liability and regulatory responsibility, and must be informed about this.
Client accounts – confirm your accounting year-end and reporting accountant with the Law Society, or provide a statutory declaration that your firm does not hold client monies.
PII – succeeding practice and phoenix firms. You are required to flag in your application if your new firm meets any of the criteria for a succeeding practice under the PII regulations, or has a principal who has a previous firm that entered the Run-off Fund. This is to ensure that any ‘phoenix-firm’ issues are resolved in advance.
Additional protection – as part of your emergency planning, consider having ‘keyman’ insurance or income-protection insurance in place.
Closing the door
‘Dá fhada an lá, tagann an tráthnóna’ – however long the day, evening will come. Every practice has a life-cycle, and preparing for that natural end is part of good governance.
Succession planning, file and data-retention strategies, insurance cover, and transparent client communication ensure that, when closure arrives, it is orderly, safe, and respectful of the trust your clients have placed in you and your firm.
Plan your cessation at least 12 months in advance, whether it be a wind-up, retirement, sale, transfer, merger, partnership dissolution or change in structure.
Vital information
Provide confirmation to the Law Society of your proposed date of cessation, home/correspondence address, contact mobile and email, details of file and sensitive documentation distribution and storage, written confirmation from the practising solicitor with access to your files, confirmation of entry to the Run-off Fund or a succeeding-practice proof, and a closing reporting-accountant’s report.
Run-off cover
The Run-off Fund (ROF) provides six years of run-off cover for eligible firms without succeeding practices, and is managed by DWF Claims (Ireland) as the SPF manager.
Cover is free at point of entry for compliant firms and has the same minimum terms and conditions as your last policy of PII. Apply for run-off cover to the SPF manager not later than 60 days before your date of cessation.
Ensure to meet the close-of-practice requirements, provide an ongoing contact address/ email, and confirm ROF cover with the Law Society.
You are required to meet all cessation requirements before and while the firm is in the ROF, including cooperation with claims. Non-compliant firms will be required to pay a premium and excesses.
Succeeding practices
If your firm has a succeeding practice, as defined under the current PII regulations, then the succeeding practice will take over the files and client accounts of your ceasing firm.
You should get written confirmation from the firm and their insurer that they are a succeeding practice and have succeeding-practice PII cover in place.
Any firm automatically becomes a succeeding practice to your closed firm if, at any time, a firm meets any of the criteria for a succeeding practice set out under the PII regulations.
This includes if a firm expressly holds itself out as a successor to your closed firm or any part thereof, a firm assumes the liabilities of your closed firm, or the principal or partners of your closed firm become principals or partners in other firms (with some limitations) at any point while the closed firm is in the ROF.
A ‘phoenix firm’ is either a new firm that meets the definition of a succeeding practice to an ROF closed firm, or an existing firm that triggers the succeeding-practice rule due to a principal of an ROF firm joining as a partner.
Phoenix firms are not permitted to start or exist in order to prevent abuse of the ROF. The issue can be regularised by succeeding-practice cover for the ROF firm being put in place.
If you are taking on the files of a closed firm and do not wish to be deemed a succeeding practice, there are a number of steps you can take to avoid this.
Do not include any reference to the closed firm in any of your firm stationery, website, social media, promotional material, or advertising. Make it clear to clients that your firm is not a continuation of the ceased firm.
Send a written notification to the Law Society that you are taking on client files, but that you are not a succeeding practice.
Date of cessation
It is advisable, regardless of the date that you close your doors, to set your cessation date as 30 November. This is because PII cover usually runs from 1 December to 30 November each year. As such, your PII cover will continue to run until 30 November in the year that the firm ceases.
This gives you time to properly wind-down your firm with full PII cover in place before the firm officially ceases on 30 November.
Client files
It should be noted that the client owns their own file, not the firm. On cessation, you cannot retain open or closed client files, any practice documentation, or client monies without a current PC.
You cannot store client files in your home or private property.
Write to all your clients notifying them of the firm’s cessation. Clients with active files should be requested to nominate a new solicitor to take over the file.
Closed files should either be returned to the client or stored, where appropriate. Closed files in storage must be accessible by a nominated practising solicitor notified to the Law Society.
Particular care should be taken with deeds, wills, and enduring powers of attorney. Transfer wills to another nominated solicitor or return them to the client. Record where deeds and safe-custody items (such as enduring powers of attorney) will be held, post-closure.
Tell your local bar association and the Law Society about arrangements so that clients can locate documents in the future.
Undertakings
Undertakings create a personal liability that persists after sale or wind-up. Limitation periods in conduct do not apply to enforcement. On a sale, make sure to list each undertaking and ask the purchaser to substitute their undertaking and seek the recipient’s release.
If substitution is not appropriate, the purchaser should notify recipients of the transfer and put them in a position they would have been in on compliance.
On a wind-up, ensure the client’s newly nominated solicitor follows the same process.
Client monies
You cannot hold client monies without a current PC. Transfer balances with their files where appropriate, and reconcile to nil before closing client accounts.
File a closing reporting-accountant’s report covering the period from your last annual report to the date that the client balances went to zero (as per bank statements). The deadline for filing is three months, but an extension can be requested from the Law Society.
You should continue to file annual reports until such time as you are in a position to file a closing report, and keep the Law Society up to date.
If you are just undergoing a structure change – for example, from a sole principal to a partnership – you should close existing bank accounts and open new ones,
Alternatively, submit a closing report within the required period and include a banker’s letter noting the change date, a copy of the new bank mandate, and your reporting accountant’s written confirmation of the change.
Emergency planning
‘Ní h-é lá na gaoithe lá na scolb’ – a windy day is not the day for thatching. Whether you are starting a new firm, in practice, or considering closing your firm, you should ensure that you have an up-to-date emergency plan in place.
Ensure that you have prepared for the worst, in case events cause a temporary or permanent emergency closure of your firm.
If a sole principal dies or becomes incapacitated, their practice cannot lawfully continue trading until a solicitor is appointed to manage the wind-down, sale, or transfer of the firm.
A section 61 application should be made to the Law Society to approve a practice manager to wind-down, sell, or transfer the firm, paid for by the estate or family of the principal.
Once appointed, the practice manager has six months to arrange the sale, transfer, or orderly wind-up of the practice. The manager is authorised to handle client monies and sign cheques for the purposes of closing the practice.
PII cover must be in place for legal services to be provided by the practice manager. If no PII is in place, the practice manager can only carry out an administrative closure.
Have a written emergency plan in place, and review and update the plan annually.
The plan should include your nominated practice manager with their current written consent, your will appointing a practising solicitor as ‘special executor’ in relation to your practice, an agreement for management if you are temporarily indisposed and will likely return to practice, power of attorney and enduring power of attorney (if you are unlikely to return to practice), plans for remuneration by you or your estate for these services (consider ‘keyman’ or income-protection insurance to help), authority to operate the bank accounts of your firm, and the location of any relevant information and passwords.
Make multiple copies of your emergency plan, and ensure that a number of people are notified of the location of the plan, including family members, your executor, members of staff, and the Law Society.
Final thoughts
Starting well is a matter of form and systems. Finishing well is a matter of planning and discipline.
If closure is on your horizon, even tentatively, engage early with your broker, your accountant, the SPF manager, and the Law Society to keep the process clean, compliant and client-focused.
A wealth of information and guidance on commencements, cessations, and emergency planning can be found at , and by contacting our helpline at firms@lawsociety.ie.
The SPF manager is also available for guidance and insight at SPF@dwfclaims.com.
Sorcha Hayes is head of practice regulation at the Law Society of Ireland.