Don't be discouraged, though: Lawyers need planners as much as anyone. While the lawyer-client might be expert at drafting legal documents, the time demands of his or her practice, along with a natural reluctance to seek help in an area in which the lawyer believes he or she is skilled, will often lead to many planning loose ends. An advisor can step in and - tactfully - point out the gaps. As planners well know, the objectivity an outsider can provide is invaluable to the planning process.
Getting Over The Hurdles
How can a planner address these potential hurdles? Try to arrange meetings in the planner's office to avoid the inevitable disruptions a meeting in the lawyer's office will likely have. If travel time during the business day is too hard for a client to manage, meeting at a restaurant might prove to be a reasonable compromise. Meeting at off-hours might be necessary in some instances. If the client lacks motivation, don't hesitate to get into specifics - lawyers are trained to pay attention to details, after all.
Reminding a lawyer who owns insurance outside of a trust that direct ownership of life insurance subjects the policy value and proceeds to the reach of malpractice claimants and estate tax should persuade him or her of the need to commit to the planning process. Don't assume they already know this - lawyers who are not estate specialists may not be familiar with a number of important planning implications.
For most lawyers, their personal estate and related planning must be integrated with their law practice planning to achieve optimal results. The level and scope of the safety net the practice provides will vary dramatically among lawyers and the gaps may best be filled at the practice level for some, and at the individual level for others. For most, their practice may be their primary or even sole source of income, but in contrast to other business-owner clients the lawyer's practice may have little or no value in the event of disability or for estate purposes.
Large Firm Considerations
For lawyers who are members of larger firms, the governing documentation is likely to be comprehensive. A key planning issue may be to determine the status of your lawyer-client in the firm. Firm structures have grown increasingly complex from the original days of having only associates and partners. There are a variety of arrangements that may include a wide variety of of-counsel arrangements, contract partner (perhaps not equity sharing), and a multitude of tiers of partnerships.
The determination of what your lawyer-client will be entitled to in the event of a range of life events (retirement, disability and death) will probably be clearly delineated for each class of partner, or at least reasonably estimated. In very large firms, there is likely a managing partner or human resources partner who can explain the range of benefits. An important risk to consider, however, is the future viability of a law firm if that is a prerequisite to the lawyer-client realizing a buyout payment or unfunded retirement or severance agreement. This risk can be difficult, or even impossible, to measure.
Firms do break up, merge or disintegrate. For successful lawyers, having a large book of portable business may be a valid offset to the risk of firm breakup, but not if a lawyer is disabled or dies during a period of uncertainty. Even for partners in old-line firms, it is always advisable to at least assess a backstop plan.
In smaller law firms, and especially for solo practice lawyers, documentation may be outdated and haphazard - if it even exists - due to the time demands of the typical lawyer's practice. There may be succession and other planning steps that are vital to the lawyer-client's overall planning, but without the haranguing of a proactive planner, these may never get to the top of the in-box.
If planning has not been addressed with sufficient vigor, a lawyer, or his or her estate, could find that instead of reaping economic value from the practice, he or she will actually incur costs to properly transition a practice following a death or permanent disability. For example, legal ethics practices may mandate returning all client files.