LSBA Receivership Panels: Overview
Each year a very small number of attorneys are suspended, disbarred, permanently retire or pass away and have not taken the necessary steps to protect their clients’ interests in the wake of their transition. When that occurs, the Chief Judge of the judicial district where that lawyer maintained a practice will appoint a lawyer or lawyers to inventory the client files and take such action to protect the public and the clients. In the case of deceased attorneys this only occurs when there is no family member, law partner or executor known to exist capable of concluding the practice.
The Louisiana Supreme Court recently amended Rule XIX, Section 27 (below) and directed the Louisiana State Bar Association to recruit, train and appoint lawyers to serve on Receivership Panels around the state. These volunteers would serve as a default mechanism when there is no qualified successor attorney to assist in closing the law practice. Efforts should always generally be made to find an attorney familiar with the transitioning lawyer's practice such as a family member, law partner, lawyer who shared office space, or close attorney friend before dafaulting to the LSBA Receivership Panel lists. The main duty of lawyers on these panels, if they were appointed, would be to inventory the lawyer’s files so that clients can be notified and the files returned to them.
The Louisiana State Bar Association created panels in all 5 appellate circuits. Each panel will be comprised of 5-10 lawyers and retired judges. The names of the volunteers will be furnished to the LA Supreme Court annually.
Rule XIX, Section 27. Appointment of Counsel to Protect Clients' Interests When Respondent is Transferred to Disability Inactive Status, Suspended, Disbarred, Disappears, or Dies.
A. Inventory of Lawyer Files. If a lawyer has been transferred to disability inactive status, or has disappeared or died, or has been suspended, disbarred, or permanently disbarred, or has permanently resigned in lieu of discipline or permanently retired, and there is evidence that he or she has not complied with Section 26, and no partner, executor or other responsible party capable of conducting the lawyer’s affairs is known to exist, the presiding judge in the judicial district in which the lawyer maintained a practice or a lawyer member of the disciplinary board should the presiding judge be unavailable, upon proper proof of the fact, shall appoint a lawyer or lawyers as counsel to inventory the files of the lawyer in question, and to take such action as seems indicated to protect the public, as well as the interests of the clients and of the lawyer in question.
B. Protection for Records Subject to Inventory. Any lawyer so appointed shall not be permitted to disclose any information contained in any files inventoried without the consent of the client to whom the file relates, except as necessary to carry out the order of the court which appointed the lawyer to make the inventory or to assist in a Louisiana State Bar Association Client Fund claim.
C. Receivership Team Panels. There shall be established five (5) Receivership Team Panels, one corresponding to each of the Louisiana State appellate districts. Each Receivership Team Panel shall be comprised of approximately five (5) to ten (10) lawyers, each of whom shall serve a term of three (3) consecutive years. The Louisiana State Bar Association shall recruit, train and appoint a sufficient number of volunteer lawyers to serve on these Receivership Panels. To be eligible for appointment to a Receivership Team Panel, a lawyer must: 1) have been licensed to practice law in Louisiana for at least ten (10) years at the time of appointment, 2) have and maintain at all times pertinent adequate professional liability insurance, and 3) be in good standing with the Supreme Court of Louisiana and the Louisiana State Bar Association at all times during the term of appointment. At least once per calendar year, a list of all currently appointed/eligible Receivership Team Panel lawyers shall be provided by the Louisiana State Bar Association to the Supreme Court of Louisiana for circulation to all presiding district court judges throughout the state. The list is intended to provide an additional resource to presiding judges for the selection and appointment of a lawyer or lawyers under Subsection A of this Rule. The presiding judge in each judicial district shall have the discretion to appoint the lawyer or lawyers the judge believes would be best suited to protect the public, as well as the interests of the clients and of the lawyer in question, and is not required to select a lawyer from a Receivership Team Panel.
D. Powers and Duties. In keeping with Subsection A of this Rule and as required and ordered by the appointing court, an appointed lawyer may have the following powers and duties: (1) Accessing all client files, including those in “open and active” representations, so as to allow for notification to clients of the inability of the lawyer in question to continue representation and for the facilitation of the return/surrender of client files to the clients or the client’s new counsel; (2) Notification to courts in litigation matters of the inability of the lawyer in question to practice, as well as seeking/securing continuances of sufficient length to allow clients to secure new representation; (3) Notification to opposing counsel and/or parties of the change in status of the lawyer in question; (4) Examination of each client file to: a) document reasonable estimates of work performed by the lawyer in question so as to assist in unearned fee issues; b) determine the need for file copying should future fee disputes be reasonable foreseeable; and c) facilitate the recordation of contingency fee contracts to protect the interests of the lawyer in question or his or her estate in future outcomes with regard to fees and costs. (5) Review and assess whether the assets and financial affairs of the lawyer in question might be reasonably sufficient to merit a recommendation to the appointing court that private counsel should be engaged in lieu of further assistance from the court-appointed lawyer(s). (6) Any other reasonable duties as mandated by the appointing court and need to protect the public, as well as the interests of the clients and of the lawyer in question, such as petitioning the appointing court for an order directing the trust account bank of the lawyer in question to allow the court-appointed lawyers special account access/signature authority for appropriate distribution of funds to which clients and/or third parties are entitled.
E. No Lawyer-Client Relationship; Disqualification from Representation. No lawyer-client relationship with any client(s) of the lawyer in question is formed by the appointment of counsel through this Rule. Receivership Team Panel lawyers who are appointed by a presiding judge under Subsection A of this Rule are, by virtue of said appointment, disqualified from undertaking representation of any client(s) of the lawyer in question. Nothing in this Rule prohibits the presiding judge from appointing a different lawyer under Subsection A whenever a Receivership Team Panel lawyer may be uniquely qualified to take on representation of one or more clients of the lawyer in question.