Going Solo and Running a Small Estate Planning Practice – Part II

This week’s topic is “Going Solo and Running a Small Estate Planning Practice – Part II”.  These materials are based, in part, on materials I prepared for a 2012 seminar hosted by the Maine State Bar Association entitled “Essentials For Solo and Small Firms Practitioners”.

In Part I of this series I discussed some introductory thoughts about going solo, practicing with precision and practicing efficiently.  In Part II I will continue to discuss practicing efficiently and will turn to the topic “work flow” but which I will refer to broadly as “case management”.

Case Management

An important aspect of practicing efficiently is to develop and put into place a practice or process to control and document the client relationship from beginning to end which is consistent with your ethical duties and that is cost effective in terms of time and expense to implement consistently.  You might call this your work flow or work process but I’ll just call it “case management”.  I use the term “case management” broadly and believe it starts when, or even before, the client walks in the door and ends when your last client has been turned over to someone else and you retire or die.   If you begin your practice with the end of your practice in mind, you are much more likely to put into place procedures now that will help or protect you and your clients at the end of your career.  For those attorneys that haven’t documented their estate planning case management process or who have more of an organic process, I offer mine as a sample, which I have developed overtime and after observing other attorneys and their case management styles.

1) Engagement Agreement

I use an engagement agreement in every case and have pre-prepared “initial the box” forms on hand at all times so they are ready to go so that I have no excuse for not having a signed engagement agreement in my file.   I find that sending out engagement agreements slows down the engagement process and sometimes results in the needless loss of a perspective client.  Some lawyers don’t use engagement agreements or fee agreements.  They seem to reason, generally, that they take too much time to prepare and clients don’t want to pay for that time.  After all it is “just estate planning or probate” and the assumption is that both the attorney and the client know and agree as to what the attorney is being hired to do – right?  Wrong! Failure to use an engagement agreement introduces unnecessary risk into your practice!  Use one and be consistent in its use.  I sometimes feel I am continually adding (or thinking about adding) new boxes in my agreement for clients to initial to safeguard me as well as them. A stripped-down sample is available at thttp://www.smiliegrogers.com/attorney-to-attorney.html. You can always follow up a basic initial engagement with a more official restatement of the engagement if you want to.  However, having a form on hand in your conference room is a very effective and efficient way to go.

2) Fee Agreement

I use a separate fee agreement sheet that is separate from my scope of representation agreement but incorporated by reference.   This is a pre-prepared “initial the box” form which I keep on hand so they are ready to go.  A stripped-down sample is available at http://www.smiliegrogers.com/attorney-to-attorney.html. I find this form allows me to quickly ensure that the client and I are on the same page in terms of billing.  While I don’t tend to take retainers, my partner does, and bases her retainer off this sheet which ensures that when she has completed the work she gets paid at that time.  Requiring payment at the time the documents are executed is a great way to control cash flow, which in a small practice is very important.  Other than estate planning, I find it is difficult to control cash flow with any level of precision (if you don’t take retainers) and will often try to stagger estate planning meetings and/or document executions with controlling cash flow in mind.

3) The Client’s Physical File

I have file folders (sometimes called redwells or expanding file pockets) ready in advance with all the normal sub files (Administrative, Correspondence, Notes, Drafts, etc..) that I like to use for both estate and probate cases. I might have 2 dozen on hand at any one time ready to go.  The Administrative sub file already contains an opening and closing form, so when a new case comes in, all I have to do is grab a new file folder and get to work.   The client’s file on my computer has corresponding sub files based on a master template, so that the computer management of the file corresponds with the physical file for the most part and ensures consistent file to file organization. I include envelopes (large manila mailing envelopes) in files to allow me to quickly secure original documents for filing in my vault.  I scan everything that goes into the paper file so that the location of the physical file is not critical.  Doing this while I build the file up also helps expedite the file closing, as everything has been filed and saved on my computer as the file is developed.

4) Collecting Client Information

I require clients complete a client information packet in almost every case if not every case.  Ideally this will be completed in advance of the first meeting but sometimes its follows the initial meeting. It gets scanned to the file. It is indispensable!  Be creative with your client information packet.  My estate planning client information packet, for example, protects me by asking lots of questions in a simple “yes/no” manner that helps clear the deck of possible surprise issues. Although the list could go on forever, I have paired it down to what I think are essential facts I want to know up front and quickly.  They are:

Confidentiality and Time Sensitivity

 

Do you consent to the use of e-mail for sending confidential information? □Yes □No □Yes  □No
If information sent to you is encrypted, what password do you want us to use? □ ________________

□ Default:  [Set by law firm]

□ ________________

□ Default:  [Set by law firm]

Do you have serious health concerns? □Yes  □No

If yes, please explain briefly.

□Yes  □ No

If yes, please explain briefly.

Is the completion of your estate plan time sensitive? □Yes  □No □Yes  □No

 

Additional Background Questions

 

About You

Client 1 Client 2
Do you have any of the following?

* Please provide us with copies.

□Will

□Power of Attorney

□Health Care Directive; Health Care Proxy or Living Will

□Revocable or □Irrevocable Trust

□ Long Term Care Insurance

□Will

□Power of Attorney

□Health Care Directive; Health Care Proxy or Living Will

□Revocable or □Irrevocable Trust

□ Long Term Care Insurance

Are you a veteran?

□Yes  □No □Yes  □No

Are you disabled?

□Yes  □No □Yes  □No

Citizenship

□USA  □Other: □USA  □Other:

Income taxpayer of:

□Maine □Other: □Maine  □ Other:

Marital status:

□Married to Client 2

□Engaged to Client 2

□Other:

□Married to Client 1

□Engaged to Client 1

□ Other:

Are any of the following relevant with regard to Client 1 or 2?

 

* If applicable, please provide us with a copy.

□ We have a premarital agreement or marital agreement in place.

□ I want a premarital agreement or marital agreement.

□We have a premarital agreement or marital agreement in place.

□I want a premarital agreement or marital agreement.

Were you previously married? □Yes  □No

If yes, how many times?

□Yes  □No

If yes, how many times?

Are you obligated to pay alimony, child support or separate maintenance? □Yes  □No □Yes  □No
Do you have children that have a different biological parent than Client 1 or 2? □Yes  □No □Yes  □No
Do you have any foreign accounts? □Yes  □No □Yes  □No
Do you own real estate in more than one state? □Yes  □No

If yes, where:

□Yes  □No

If yes, where:

Do you have a General Power or Limited Power

of Appointment?

□Yes  □No

□I don’t know what this is but know I have a power under an estate planning document executed by someone else.

□Yes  □No

□I don’t know what this is but know I have a power under an estate planning document executed by someone else.

Do you have any outstanding tax obligations? □Yes  □No □Yes  □No
Have you ever filed gift tax returns? □Yes  □No □Yes  □No
Do you anticipate a future inheritance that we should be made aware of? □Yes  □No

If yes, please estimate the amount: $

□Yes  □No

If yes, please estimate the amount: $

Do you have an interest in any of the following?

Please disregard any public corporation unless you feel your ownership interest is relevant regarding your planning.

□A Subchapter C corporation that owns real estate?

□ A Subchapter S Corporation?

□Any property or business interest with environmental hazards/waste concerns or general liability concerns?

□ A Subchapter C corporation that owns real estate?

□A Subchapter S Corporation?

□ Any property or business interest with environmental hazards/waste concerns or general liability concerns?

Are you a party to a lawsuit? □Yes  □No

If yes, who is the adverse party?

□Yes  □No

If yes, who is the adverse party?

Are you receiving any of the following?

Approximate amounts are fine.

□Social Security

Annual total is: $___________

□SSI

Annual total is: $___________

□SSDI

Annual total is: $___________

□Other government benefits

□Social Security

Annual total is: $___________

□SSI

Annual total is: $___________

□SSDI

Annual total is: $___________

□Other government benefits

Do you have any other concerns that you want to discuss with us? □Yes  □No

If yes, please briefly explain:

□Yes  □No

If yes, please briefly explain:

 

General Questions about Other Relevant People

 

Is there anyone that depends on you for general support?

Example: A child or grandchild that turns to you frequently for money.

 

 

□Yes  □No

If yes, who?

And should your estate plan provide for transitional support

for this person?

□Yes  □No

□To be discussed.

□Yes  □No

If yes, who?

And should your estate plan provide for transitional support

for this person?

□Yes  □No

□ To be discussed.

Does any person you expect might inherit from you other than your spouse receive any of the following? □SSI

□SSDI

□Other government benefits

□SSI

□SSDI

□Other government benefits

Is any member of your family or that will inherit from you a party to a lawsuit (including divorce)? □Yes  □No

If yes, who? _________________________

□Yes  □No

If yes, who? ________________________

Does any member of your family or that will inherit from you have concerns about exposure to other creditors, such as due to his/her employment (ex. a doctor, lawyer, accountant, or other professional that may have malpractice exposure)? □Yes  □No

If yes, who?

□Yes  □No

If yes, who?

Do you have any other concerns about any member of your family or that will inherit from you that you want to discuss with us? □Yes  □No

If yes, who?

□Yes  □No

If yes, who?

 

Space for your comments or other concerns:

□ If additional pages are needed to complete this section please attach the needed pages and check this box.

5) Old Estate Planning Documents

I collect and review old documents which is an important part of the client discovery and protection process. Also, it is a great place to learn from the attorney that drafted the forms.   If a client wants me to review their old documents in detail so as to try to reuse them, I will but I bill them hourly for this review.  When I explain that it is usually cheaper to simply start over with new documents, most clients forgo this review and simply start over.

6) Consider your time, billing and liability when asked to review documents:

Effectively reviewing and revising old documents can be a time trap, especially if the documents are dated.  Often enough has changed in the law that new documents will benefit the client.  Billing a client for your review time then becomes an issue; you have put the time in that was requested of you but now the client doesn’t feel they should have to pay for it since you are going to prepare new documents.  Now either you are going to discount the bill and resent having to so or the client is going to pay for the time but will resent having to do so.  That is a bad situation and one that you can avoid or regularly walk into again and again and again.  Come up with a process to avoid this lose/lose situation and repeat it as needed to ensure you and your client stay happy.

Revising old documents, particularly trust based planning, has the potential to increase the liability for the attorney in any given plan when compared to starting over.  Ask yourself:  “What am I being paid and what liability am I taking on”.  If asked to make a simple revision to a trust, you might find out later that you have liability for embedded mistakes in that trust that you did not pick up on.  Was that a good case for you to take on?  Was it worth the $X to review the plan and to make that change?  I would prefer to discount my flat fee than to revise any trust based estate plan (unless I prepared it to begin with) in most situations.

7) Managing Client Expectations

I try to clearly explain at the initial meeting when the client should expect the documents will be ready for execution and I stick to this by following a process. Following a strict process is a great way to make sure you meet your client’s expectations and avoids procrastination. To further manage expectations, I try to clearly explain to the client what they can expect their total be to be, if known. The use of an engagement agreement and/or a billing sheet is critical for clearly communicating on this point.  See above. In estate planning matters I try to present on one (1) bill and usually present it in person.  This allows me to ensure that the client understands the bill and finds it agreeable. Using a billing sheet also helps me not under bill myself and helps me ensure that most bills among clients are fairly, if not exactly, uniform except for special facts and circumstances.

Next week I hope to bring you Part III, in which I will continue with more on the topic of efficiency and case management as we turn to the subject of drafting and closing the file.

About Smilie G. Rogers

Elder law, life care planning estate planning, probate and tax attorney located in York, Maine. Licensed in Maine, Massachusetts and New Hampshire.
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