What should you do if your solicitor closes their firm?

Finding a solicitor that you trust is a vital first step in any legal matter.  Someone might be an expert in their field, but that doesn’t necessarily mean that they’re the right person for you.  The solicitor/client relationship is based on mutual trust and respect, with both parties keen to do as much as possible to help the other achieve success in the matter at hand.  Over time this relationship can develop into something that both can rely on.  All the more reason, then, to know what to do if your solicitor decides to cease trading.

Solicitors’ firms close down for all sorts of reasons.  Maybe the principal decides it is no longer a viable entity.  Maybe they decide to retire or switch careers or move abroad.  In most cases, they will have a plan for the firm’s closure.  A solicitor working there might take over the firm, or it could be sold or merged with another firm.   But there are times when no plan can be made if the owner dies suddenly or is incapacitated.  Unfortunately too, there are times when an issue with the running of the firm means that the Law Society has to step in and forcibly close it.  These situations obviously have a significant effect on the clients and their files, particularly those where work is ongoing.

So how is the closing of a firm handled?

The Law Society of Ireland has provided a clear guide to solicitors to cover the closing of a firm.  They are advised to have a plan in place which should cover the practicalities of closing a firm.  It should be referred to in the will of the managing partner or sole practitioner and someone should be appointed to look after the closure of the firm.  Some solicitors will sign a Power of Attorney, authorising someone to sign such documents as are needed.  Solicitors are advised to have a budget in place to cover the costs of closure, and to have a set procedure agreed for notifying the Law Society and insurers.

What does this mean for clients?

Firms are obliged to notify their clients that the firm is closing.  Reference to the closing should also be made in the answering machine or on emails sent from the firm.  Every effort must be made to keep the clients up-to-date on the situation so that they are clear about their rights and how their file will be dealt with.

Work in progress

If there is ongoing work on the file, solicitors are advised to try and finalise the matter before the firm closes.  This might be possible in the case of set matters like sales or purchases which can be said to have a “beginning” and “end”.  Things are different in the case of personal injuries, for example, or for large property transactions that may be dealt with in stages.  In those cases, the solicitor should prepare a comprehensive memo, setting out the progress of the file to date and outlining the next steps.  This means that anyone who takes over the file will have a clear picture of the history and envisaged future of the matter.

Location of files and title deeds

The question of where the actual files go will depend on the instructions of the client.  When they are being notified of the planned closure, they should be given the choice of allowing their file to be transferred to a new solicitor (in the case of a merger or sale), or to have their file sent to a different solicitor of their own choosing.  At all times the solicitor must remember that the file belongs to the client and they have the right to determine who will act for them in the future.

If it the case that there is work outstanding on the file that the client has paid for but which has not yet been completed, they may be entitled to a refund for that portion of the work which remains undone.  They are also entitled to be advised as to the current status of the file so that they are fully aware of the situation.  If they decide to allow their file to be passed on to the solicitor who is buying the original practice they should be contacted by the buying solicitor so as to meet with the person who will be looking after their work into the future.

When it comes to title deeds, the same process applies with the exception that if the client has a mortgage then the solicitor has an obligation to return the deeds to the lending institution so that they can be kept as security for the loan. Otherwise the client can collect the title deeds.

Firms closed by the Law Society

In the case of a firm being taken over by the Law Society the procedure is slightly different.  This usually happens in the unfortunate situation where the solicitor has been found to have acted negligently or against the interests of their clients.  In cases where the Law Society deems it necessary to forcibly close down a firm, they will take possession of the files and deal with any outstanding matters. The same rights will apply to the former clients in that they are still entitled to decide where their file is to be sent, but it is the Law Society, and not the firm’s solicitors, who will notify them of the closure.

The Law Society maintains a register of firms which are practising so if someone has any doubts over whether a firm is still open, their first port of call is to contact the Law Society who will be able to determine the whereabouts of their file and advise them on the next step.

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