All thoughtful lawyers should care about what will happen to their clients if an emergency puts the lawyer out of commission. A new rule creates the role of attorney surrogate to protect clients under these circumstances. Admission and Discipline Rule 23, section 27 (effective January 1, 2008).
An attorney surrogate is someone who is appointed to protect another lawyer’s clients upon the occurrence of a triggering event that puts client matters at risk because the lawyer cannot attend to them. As a practical matter, this rule has more cogency for solo practitioners than it does for lawyers who practice in law firms or who are employees of their clients. Because the clients of lawyers who practice in firms are considered clients of the entire firm, if the assigned lawyer becomes unavailable to handle a client’s case, the remaining lawyers have a fiduciary duty to step up and handle abandoned client matters. Failure to do so exposes the firm and its remaining lawyers to malpractice liability. When a lawyer is an employee of the client, for example, a government attorney or in-house corporate counsel, the client presumably knows when its attorney is unavailable and will make alternative arrangements.
According to the rule, an “attorney surrogate” is a senior judge or another member of the Indiana bar in good standing who is appointed by a court to take action as described in the rule. Hereafter, I will refer to attorney surrogates simply as surrogates.
The surrogate rule applies to lawyers in private practice, excluding private practice lawyers who are employees of other lawyers or formal law firms (described as “fiduciary entities”) or in-house counsel. Lawyers sharing office space or in non-partnership associations are not considered to be practicing in fiduciary entities.
Thus, staff attorneys or associates who are employees of their law firms are not considered to be lawyers for purposes of this rule. Conversely, the rule applies to lawyers in solo practice or who practice in associations not considered to be fiduciary entities and partners, shareholders or owners of fiduciary entities. Hereafter, I will use the word “lawyer” in this limited way, not in the broader sense of anyone holding a law license.
Beginning in 2008, on their annual registration statements, lawyers will be called upon to designate a surrogate to serve upon the occurrence of a triggering event. There is no stated penalty for failing to make a designation. But it is clearly part of each lawyer’s professional responsibility to make sure that client interests will be served in the event of the lawyer’s unexpected unavailability. Comment  to Indiana Rule of Professional Conduct 1.3 cautions that “[t]o prevent neglect of client matters in the event of a sole practitioner’s death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer’s death or disability, and determine whether there is a need for immediate protective action.” Several bar associations have developed manuals to assist lawyers with succession planning. The Indiana State Bar Association’s excellent manual is available on-line at: http://c.ymcdn.com/sites/www.inbar.org/resource/resmgr/Surrogate_Rule_pdf.pdf.
The registration statement designation constitutes a certification that the designated surrogate has agreed in writing to serve if called upon to do so. The lawyer and the designated surrogate must each retain a copy of the agreement. It is also a good idea for the lawyer to inform his support staff and others close to him about the designation. The designation remains in effect until revoked by either the designating lawyer or designated surrogate. The lawyer must notify the Clerk of the Supreme Court of any change in the designated surrogate within thirty days.
Lawyers who practice in fiduciary entities will comply with this requirement by designating the entity itself as the surrogate. Given the restrictive definition of lawyer, the only lawyers who will be called upon to designate a surrogate by name will be those who are the sole owners of their firms (even if they employ associates) and lawyers who practice solo or in associations that are not fiduciary entities.
Lawyers required to designate a surrogate who do not make a designation will be deemed to have designated whichever senior judge or attorney in good standing a court chooses to appoint in the event of a triggering event.
A designated surrogate has no particular duties until a triggering event occurs. These events include the death, disappearance or disability of a lawyer or the disbarment or suspension of a lawyer who has failed to make adequate transitional arrangements for client matters between the order of discipline and its effective date.
The Appointment Process
When a triggering event occurs, any interested person may file a verified petition in a court of general jurisdiction where the lawyer maintained a principal office seeking the appointment of a surrogate. Under ordinary circumstances, one would expect the petition to be filed by the designated surrogate, but the rule specifically contemplates that it could be done by a local bar association. A client seeking access to a file or trust funds could also file a petition.
The petition must be served on the lawyer at his official address of record on the Supreme Court Clerk’s roll of attorneys; unless the lawyer has died, in which event service is to be made on the personal representative, if there is one. The method of service is not specified, so it would be prudent to follow Trial Rule 4.1.
Within ten days of the date the petition is filed and after an opportunity for the lawyer to be heard, the court must decide whether a triggering event has occurred and, if so, whether a surrogate should be appointed. If the court so finds, it shall appoint the designated surrogate, a senior judge or another attorney in good standing to serve as the surrogate. If there is a designated surrogate, the court is not bound to appoint that individual, although it would seem likely that the court would generally defer to the lawyer’s wishes absent some compelling reason.
Attorney Surrogate Duties
A surrogate’s general responsibilities are to take custody of the lawyer’s practice and supervise an orderly transition of client files in a manner that protects their interests. The surrogate does not take over client files as successor counsel merely by being surrogate. In fact, it is expressly stated that there is no attorney-client relationship between the surrogate and the lawyer’s clients. Nor is it the responsibility of the surrogate to attend to the business aspects of the lawyer’s practice, which should be handled by a personal representative, legal guardian or some other authorized agent who is responsible to the lawyer, rather than to the lawyer’s clients.
The specific duties of surrogates are set out in the rule. They include:
- Inventory the lawyer’s client files and records;
- Give notice to clients of the need to obtain new counsel and arrange for delivery of client files and property to them or their designated successor counsel;
- Make appropriate referrals to potential successor counsel or, with client agreement, accept full representation as successor counsel;
- Apply for extensions of time, as needed, to give clients a reasonable opportunity to employ new counsel;
- File interim notices, motions or pleadings for clients where jurisdictional time limits may expire before the client has an opportunity to employ new counsel;
- Notify other appropriate people or entities about the surrogate’s appointment, including, for example, courts, possible opposing counsel and bar associations;
- Upon special court approval, take control of the trust account, conduct an accounting and distribute trust funds to their rightful owners; and
- Take any other actions with court approval as needed to carry out the purposes of the appointment.
The prospect of filing motions or pleadings for clients the surrogate does not represent may seem a bit daunting. For example, does the surrogate file an appearance, and how should the surrogate designate herself? These are untested waters, but in my view, the surrogate should file an appearance clearly stating that the appearance is for the limited purpose of carrying out duties contemplated by Admis. Disc. R. 23(27)(c)(3)(d). Any motions or pleadings filed should similarly designate the surrogate’s capacity and note the surrogate’s limited authority.
Notwithstanding the fact that the relationship between the surrogate and the lawyer’s clients is not that of attorney and client, the surrogate and those working at her direction are obliged to treat information about clients in the same confidential manner as if there were a true attorney-client relationship; that is, in compliance with Rule of Professional Conduct 1.6. To the extent necessary, the surrogate may disclose client information to the court, but only in camera. Communications between the surrogate and the clients are privileged as though made within a true attorney-client relationship.
Conflicts of Interest
Even though an attorney surrogate does not, without more, enter into a full-fledged attorney-client relationship with the lawyer’s clients, conflicts of interest may preclude the surrogate from handling particular matters. For example, the surrogate may be opposing counsel on a particular matter. Clearly, the surrogate has no business even looking at the file for the opposing party to that matter. One of the top priorities for the surrogate must be to identify conflicts when inventorying files. Upon discovering such conflicts, the surrogate must take no further action except to promptly notify the court so appropriate judicial action can be taken. The court’s response might likely include appointment of a special surrogate whose responsibilities are limited to files that involve a conflict of interest.
Statutes of Limitations and Other Jurisdictional Deadlines
“Any applicable statute of limitations, deadline, time limit or return date” for a filing on behalf of a client, excepting a response to an application for temporary restraining order, is automatically extended for 120 days from the date the petition is filed, if it is granted, so long as the applicable deadline would otherwise expire between the date the petition is filed and the automatically extended date. Admis. Disc. R. 23(27)(e). This provision must be thoroughly understood. There is no automatic extension of time for deadlines that run between the triggering event and the filing date of the petition. The practical effect is that the petitioning party—most likely the designated surrogate—should file the petition immediately after the triggering event in order to provide clients the greatest degree of protection.
The appointing court has broad authority to take or authorize any appropriate action to protect the lawyer’s clients, the lawyer and the public. This includes the authority to order destruction of closed client files.
When a surrogate’s work is done, she must file a final report and an accounting of the client funds and property that came into her possession, if any. The final report and accounting must be served as directed by the court. This would likely include the lawyer himself if available to be served or the personal representative or guardian of a lawyer who is deceased or disabled. Upon acceptance of the final report and accounting, the court is to approve them and order the surrogate discharged.
Compensation of the Attorney Surrogate
In the final report and accounting, the surrogate may seek an order compensating her for the expenses and attorney fees associated with carrying out her duties. The court may issue an order awarding fees and expenses. It becomes a judgment against the lawyer or the lawyer’s estate and a lien against the lawyer’s assets retroactive to the date the original petition to appoint a surrogate was filed. “The judgment lien is subordinate to nonpossessory liens and security interests created prior to its taking effect and may be foreclosed upon in the manner prescribed by law.” Admis. Disc. R. 23(27)(g), No other sources of funds are identified in the rule to compensate surrogates for their services.
Surrogates are immunized from civil suit for damages arising from their actions or omissions, unless they engage in intentional wrongdoing. But if the surrogate takes on client matters as successor counsel, immunity will no longer apply.
Lawyers have a collective responsibility to assure that clients are not harmed when misfortune befalls one of our colleagues. This new rule provides a structure for fellow bar members to step forward and help each other out in a time of great need. When another lawyer whom you trust asks if you would be willing to be designated as a surrogate, give it some thought. I hope you’ll say yes, just as you undoubtedly hope another lawyer will agree to help out when you make a similar request.