Death of sole principal - practice manager, sale and no succeeding practice

Scenario

Mr HZ, principal of the sole principal practice FGX & Co., has unfortunately died. As Mr HZ was a sole principal, it is necessary to bring to the Estate’s attention to Section 61 of the Solicitors Act 1954 as substituted by Section 31 of the Solicitors (Amendment) Act 1994 which provides as follows:

“Where a solicitor who was a sole practitioner has died, his personal representative may appoint another solicitor to carry on his practice for such period and on such terms as the Law Society may think fit.”

Requirements

Ms TU, the personal representative of Mr HZ, writes to the Law Society (email/letter to firms@lawsociety.ie) nominating solicitor Mr. BP of BXP & Co. as practice manager of the firm to enable its windup. &²Ô²ú²õ±è;

Once the Law Society is satisfied that Mr BP is a person of good standing with the Law Society, it contacts Mr BP confirming his appointment for a period of six-months and sets out the Law Society’s requirements for the windup of the firm.

Note, it is most frequently the case that the role of the practice manager will be to windup the deceased principal’s firm and only as part of this process become aware of the possibility of a sale of the firm. In such circumstances, the practice manager should contact the Law Society to advise them of this, and the Law Society will then provide the practice manager with its requirements to effect this. In this scenario, Mr BP contacts the Law Society to advise that he has agreed the sale of FGX & Co. to AXZ Solicitors which will not be a succeeding practice to the firm. &²Ô²ú²õ±è;

Note, the appointment of a nominated solicitor by the personal representative is subject to the approval of the Law Society of Ireland. No legal services can be provided in the name and on behalf of the firm until the Law Society has approved the nominated solicitor. &²Ô²ú²õ±è;

The approved nominated solicitor will be entitled to sign cheques and negotiable instruments while winding up the late solicitor’s practice. They will also be authorised to handle client funds in addition to client funds which were received prior to the date of death.   

Important

Whether or not an appointed practice manager can provide legal services/advice on behalf of a firm depends on the status of the firm’s professional indemnity cover. If the firm has PII cover in place, then the practice manager can provide legal services/advice to clients of the firm (e.g. completing live/active files). Obviously, no new clients should be engaged.

If the firm does not have PII cover in place or as is more common, the PII cover for the firm expires during the six-month period of their appointment, then the practice manager cannot provide legal services/advice on behalf of the firm. They are limited to conducting a purely administrative windup (e.g. collecting monies owed to the firm, paying invoices, sending live/active files to the nominated solicitors of clients, etc.). &²Ô²ú²õ±è;

Section 31 requirements – to be confirmed/completed by the practice manager of FGX & CO (Mr BP)   

  1. Contact the firm’s broker (details will be provided by the Law Society) and advise them of your appointment as practice manager of the firm FGX & Co. 
  2. Confirm the date of the firm’s sale to AXZ Solicitors. 
  3. Confirm that all live/active files of the firm have been sent to the nominated solicitors of clients or transferred to AXZ Solicitors.
  4. Confirm that all client monies of the firm have been sent (along with the respective file) to the nominated solicitors of clients or transferred to AXZ Solicitors. 
  5. Confirm that all closed/inactive files of the firm have either been returned to clients or transferred to AXZ Solicitors.  
  6. Contact the firm’s reporting accountant (details will be provided by the Law Society) and file a closing accountant’s report to the date the existing sole principal practice last received, held, controlled or paid clients’ monies (i.e. the date of cessation). This report should be filed with the Law Society within three months following the date of cessation. All queries relating to this, or other financial matters should be directed to the Law Society’s Financial Regulation section (financialregulation@lawsociety.ie). 
  7. As AXZ Solicitors is not a succeeding practice to FGX & Co., it is necessary for it to obtain run-off cover from the Run-off Fund, as provided for by the Solicitors Professional Indemnity Insurance Regulations in force and confirm to the Law Society that this has occurred.   

Note, you are required to notify the Run-off Fund of your intention to cease practice no later than 60 days before your firm’s cessation date (see Appendix 5 in the Run-off Fund Guidelines). &²Ô²ú²õ±è;

The Run-off Fund is contactable at DWF Claims (Ireland) Ltd, The Lennox, 50 Richmond Street South, Saint Kevin's, Dublin 2, D02 FK02, (telephone: 01 790 9400 and email: SPF@dwfclaims.com). For further information relating to run-off cover please review the Law Society’s Guidelines in the ‘Running a Practice/Closing a Practice’ section in the solicitor’s area on the public page of the Law Society’s website www.lawsociety.ie. &²Ô²ú²õ±è;

Section 31 requirements – to be confirmed/completed by the principal of AXZ Solicitors (Mr AXZ)   

  1. Confirm the date of your firm’s acquisition of FGX & Co. 
  2. Confirm that live/active files from FGX & Co. transferred to AXZ Solicitors. 
  3. Confirm that client monies from FGX & Co.  transferred to AXZ Solicitors. 
  4. Confirm that closed/inactive files from FGX & Co. transferred to AXZ Solicitors and provide the location of where these files are stored and confirmation that your firm will provide access to them if required. 
  5. Confirm that AXZ Solicitors is not a succeeding practice to FGX & Co. and provide confirmation from your PII broker/provider that they are aware of this, and cover is being provided on this basis.  
  6. Forward a copy of your headed notepaper and ensure it is in accordance with the provisions of . 
  7. Once in receipt of the required confirmations and documentation, the Law Society will proceed to cease the sole principal practice FGX & Co.