Best Practice: 20 steps to dissolve a law firm

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the managing partner in a 14-attorney firm in Seattle. Our partnership has voted to dissolve the firm effective the Sept. 1, 2015. Two new firms will be formed. Eight attorneys will be going to one firm and six to another firm. What steps do we need to think about in managing this project?

A. You actually have two projects to manage. The dissolution project and the new firm start-up project for the firm that you will be joining. The other firm will also have a new firm start-up project as well. I will address in this blog some of the dissolution steps and I will address some of the new firm start-up steps in next week's post.

Dissolution Steps

1. Create a master project plan.
2. Identify who will be in control of the wind down. Firm or representatives from both sides.
3. Contact the firm's accounting firm.
4. Identify a spokesperson to address associates and staff.
5. Identify a spokesperson to handle the press and other outside sources.
6. Notify associates and staff.
7. Create a checklist of ongoing obligations and responsibilities.
8. Create a list of memberships and special arrangements.
9. Notify insurance carriers.
10. Notify clients by letter of the dissolution.
11. Determine compensation for those that manage the wind down.
12. Follow-up on outstanding delinquent accounts receivable.
13. Develop a dissolution agreement and have signed by all partners.
14. Identify who will have control of the files - paper and electronic.
15. Determine last day of operations.
16. Determine how and when the final work in process will be billed and by who.
17. Address the office lease obligation.
18. Address the equipment and other lease obligations.
19. Determine the value of all firm assets as of the last day of firm operations.
20. Identify contingency fee matters and negotiate a separate agreement regarding how to pay all involved when the cases are settled.

These are just a few of the many steps that are involved. Next week I will post "Part I - Steps to start-up your new firm."

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John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.