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Client contingency planning

The requirement & reporting

On January 1, 2025, amendments to By-law 7.1 will come into force which implement a requirement for licensees in private practice to maintain a client contingency plan for their professional business.

On March 31, 2026, licensees in private practice will be required to confirm on their 2025 Annual Report Filing that they have made appropriate client contingency arrangements.

  • Sole practitioners will be required to confirm that they have created a client contingency plan that complies with the Law Society’s minimum requirements, that they have reviewed that plan in the preceding 12 months, and that they have obtained the consent of their administrator to act as such.
  • Licensees practising in firms (partners and associates) will be required to confirm that their firm has a plan, and that it complies with the Law Society’s minimum requirements, including a contingency in the event that no members of the firm are able to carry on the firm’s professional business.

Read the report approved by Convocation on April 25, 2024.

  • Why is client contingency planning important?

    When a licensee is suddenly or unexpectedly unable to practise law or provide legal services, clients with active matters may have their legal interests jeopardized. Court appearances may be missed, real estate deals may fail to close, immigration documents may not be filed and trust funds may be inaccessible, which may hold up pending matters.

    In instances where a licensee ceases to practise law or provide legal services without appropriate arrangements to wind-up their business, the Law Society’s Trustee Services department steps in to protect, preserve and appropriately distribute client trust monies and property, such as client files, testamentary documents, or corporate minute books – this occurs most often among lawyers who practise as sole practitioners and often happens weeks after the licensee has stopped working.

    Having a client contingency plan demonstrates good business management and serves the public interest as well as the licensee’s interest as it preserves the value of the practice and the reputation of the practice or licensee.

    A client contingency plan may also reduce stress on licensees and ensure that their family members are not burdened with having to wind-up their professional business at a very difficult time.

  • The client contingency plan

    A compliant plan, for which a template will be made available later in 2024, will include information and adequate arrangements to allow for the handling of client property and management of the licensee’s professional business including, with respect to:

    • the appointment of an administrator licensee to assume responsibility for the wind-up of the licensee’s professional obligations to clients
    • the location of
      • open and closed files
      • client property including wills and will indices
      • foundation documents and other important records and valuable property
    • passwords and the means to access computers, email, accounting and other electronic records
    • details of, and access to all trust accounts, trust funds and any other accounts related to the licensee’s professional business, including the location of all accounting records and the contact information for any bookkeepers or accountants
    • any other arrangements necessary to wind-up the licensee’s professional obligations to clients.

    A template plan will be made available later in 2024 by the Law Society to ensure licensee compliance.

  • The administrator

    The administrator, will be required, at minimum, to wind-up the licensee’s client obligations or supervise a non-lawyer steward (for instance a staff or family member) in the proper wind-up of the licensee’s obligations to their clients.

    Specifically, the administrator will be required to carry out, or supervise three functions:

    1. Notify the Law Society’s Trustee Services department and the licensee’s insurer as soon as possible after learning that the licensee has ceased working.
    2. Advise clients that the licensee is no longer able to continue in respect of the retainer and arrange for the transfer of the clients’ files and other property to another licensee or their return to the clients.
    3. Attempt to access the licensee’s trust accounts, if applicable, for the purpose of returning or transferring trust funds as directed by the clients (or parties, or the court, where consent is required).

    Licensees may wish to enter into more comprehensive business continuity agreements that include the continuation of the licensee’s business by the administrator or the sale of the licensee’s business to another licensee or licensee firm. However, the mandated requirements of administrators are limited to the three functions above.

    In circumstances where an administrator cannot be identified, for instance where licensees are working in remote locations without a community of licensees on which to rely, the Trustee Services department will assist in identifying an administrator and to facilitate the arrangement. Licensees can contact Trustee Services through LSO Connects.

  • Support and resources

    A full suite of resources will be provided to assist licensees with client contingency planning. The following are currently in development:

    • a template for a compliant plan
    • a power of attorney template and instruction letter precedents to direct the transfer of trust accounts to a successor
    • additional CPD offerings about succession planning and targeted practice supports
    • an updated contingency planning guide
    • individualized guidance and resources including telephone support.

    The Law Society’s existing contingency planning materials can be a helpful starting point for licensees as they develop a client contingency plan. It is important to note, however, that these resources do not reflect the contingency planning requirements, which will take effect on January 1, 2025.

    The Law Society is actively updating these materials and creating additional resources to assist licensees in understanding and complying with the new contingency planning requirements. Licensees should continue to monitor this page for further information and updated resources.

  • Continuing Professional Development

    These programs are available on-demand and include client contingency-related content which may be a helpful starting point for licensees as they develop a client contingency plan. It is important to note, however, that these resources do not reflect the contingency planning requirements, which will take effect on January 1, 2025.

    New CPD programming related to Client Contingency Planning is in development. Licensees should continue to monitor this page for further information and updated resources.

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