Designating a Custodian Attorney

Designating a custodian attorney is a great place to start. It is quick, easy, and immediately provides for transition if you suddenly cease practice before your planned succession is completed.

If you take only one transition planning step, designating a custodian is the step to complete.

1. Texas Rule of Disciplinary Procedure 13.04
   Texas Rule of Disciplinary Procedure (TRDP) 13.04 is a relatively new rule that allows attorneys to designate a Texas licensed attorney in good standing to act as a custodian in the closure of the attorney’s practice by examining client matters, notifying clients and others of the cessation of the attorney’s practice, asking courts or administrative bodies for an extension of time, filing motions and pleadings on behalf of the client with the client’s consent, giving appropriate notice to affected people or entities, and making arrangements for disposition of the client’s file and property. Under this rule, custodian attorneys are protected from liability, except for intentional misconduct or gross negligence.
   
   Importantly, the custodian does not become the new lawyer for the clients. The custodian’s role is to wind down the lawyer’s practice. If the custodian steps into representation of a client, “the lawyer’s role as custodian terminates, and the lawyer’s actions are subject to the Texas Disciplinary Rules of Professional Conduct (TDRPC) regarding the client-lawyer relationship.”
   
   
2. The Role of a Custodian Attorney
   A custodian attorney helps wind down a lawyer’s practice, as needed, easing the burden that typically falls to family and friends. A custodian attorney does not assume representation of the lawyer’s clients or law practice but does have practical authority to act in a manner consistent with closing an attorney’s practice, helping to ensure that the client is not harmed by the closure of the law practice. Recognizing that some of these acts, such as reviewing the attorney’s client files, would implicate some important rules of professional responsibility, such as confidentiality and conflicts of interest, this toolkit provides checklists and practice tips to help avoid running afoul of those and other implicated rules.
   
   The main objectives of a custodian include:
   1. Accessing client files.
   2. Notifying clients and others that the lawyer has ceased practice.
   3. Obtaining the clients’ instructions on what to do with their files.
   4. Returning any client property.
   
   See chapter 4, “Sudden Cessation of Practice and Custodianships,” for more information on what to do when serving as a custodian.
   
   
3. How to Designate a Custodian Attorney
   
   
   1. Designating a Custodian Attorney via the Online Portal
      Attorneys can designate a custodian attorney through the State Bar of Texas online portal by completing an electronic designation form. The process is simple and takes less than five minutes:
      
      1. Click here to complete the custodian designation form online.
      2. Click on the “Designate Custodian Now” button at the bottom of the page.
      3. Log in to your MyBarPage with your bar number and your password for that page.
      4. Type in the name of the colleague you wish to serve as your custodian, who must be licensed in Texas and in good standing. An email will be sent to the designated attorney, who can accept or decline to serve as your custodian.
      5. You can designate alternate custodians if you wish.
   2. Designating a Custodian Attorney by Agreement
      If you prefer, you can appoint an attorney licensed in Texas and in good standing to act as your custodian by written agreement signed and acknowledged by you and the custodian attorney. It is advisable to use the custodian appointment portal even if you have a separate agreement, so the State Bar knows who to contact if your clients call seeking a way to obtain their files. See section F., “Forms and Resources for Designating a Custodian,” below for a sample custodian agreement.
4. Estate Planning Documents
   It is a good idea to address closing your law practice in your estate planning documents even if you have designated a custodian through the State Bar’s portal or signed a custodian agreement with a colleague. It can be helpful to authorize your power of attorney or personal representative to enter into a custodian agreement with a Texas licensed attorney in good standing in case your designated custodian or alternates are unable to do so, access bank and trust accounts for the law practice, and provide them with any passwords to computers and digital files.
   3. Sample Will Language Regarding a Custodian
      Any Executor designated under this Will shall have and possess any power and authority necessary to apply to a court to take jurisdiction of my law practice and appoint a custodian in compliance with Texas Rules of Disciplinary Procedure 13.01 through 13.03; to collaborate with any successor attorney, any Custodian Attorney, or any other person having lawful custody of the files and records of my law practice; and to facilitate the transition of any client matters to other counsel or otherwise terminate my services pursuant to part XIII of the Texas Rules of Disciplinary Procedure. For the purposes of this provision, “Custodian Attorney” means any attorney or alternate attorney who has been appointed by a court, whom I have designated as my custodian with the State Bar of Texas, or with whom I have signed a custodian agreement for the purpose of accessing any computers or digital files maintained by my law practice; notifying my clients of my ceasing to practice and assisting them in finding other attorneys; notifying courts and other parties of my ceasing to practice; examining files and returning client property, documents, and files; accessing any Trust Accounts and providing trust accounting and issuing unused trust balances owing to my clients or other parties as described in section 456.002 of the Texas Estates Code; and/or other activities pursuant to part XIII of the Texas Rules of Disciplinary Procedure.
   4. Sample Power of Attorney Language
      Note: Client consent is required for any third-party to access confidential client files. This power-of-attorney language should be used only if prior consent has been given by clients through client engagement letters or other communication.
      
      With respect to my law practice, my agent under power of attorney is expressly authorized and directed to carry out the terms of the Agreement to Close Law Practice [or Custodian Agreement] dated [date] and to coordinate any actions as my agent with those of the custodian then serving. If that Agreement is not in effect, my agent is authorized to enter into a similar agreement with another attorney that my agent, in my agent’s sole discretion, may deem necessary or desirable to protect the interests of my clients and dispose of my practice.
      OR
      In the absence of an appointed custodian for my law practice, my agent under power of attorney, who is a lawyer, is expressly authorized to act as a custodian of my practice and in that role is directed to take any steps deemed necessary or desirable, in my agent’s sole discretion, to protect the interests of the clients of my law practice and to wind down or dispose of that practice, including, but not limited to, selling that practice, collecting accounts receivable, paying expenses relating to the practice, accessing or directing another lawyer as custodian in accordance with section 13.04 of the Texas Rules of Disciplinary Procedure, accessing or directing such custodian to access any computers or digital files maintained by my law practice; notify my clients of my ceasing to practice and assist them in finding other attorneys; notify courts and other parties of my ceasing to practice; examining files and returning client property, documents, and files; accessing or directing such custodian to access any Trust Accounts and providing trust accounting and issuing unused trust balances owing to my clients or other parties as described in section 456.002 of the Texas Estates Code; and/or other activities pursuant to part XIII of the Texas Rules of Disciplinary Procedure. If my agent is not a lawyer qualified to act as custodian for my practice under part XIII of the Texas Rules of Disciplinary Procedure, I authorize my agent to employ or appoint an attorney or attorneys as custodian or custodians to perform the acts of a custodian under such rules, including the acts listed above.
      
      
      
   5. Sample Instructions for a Solo Practitioner’s Will
      

      The following language is modified from James E. Brill, Dealing with the Death of a Solo Practitioner, State Bar of Tex. Prof. Dev. Program, Advanced Drafting: Estate Planning and Probate Course (2000)¹:
      
      I currently practice law as a solo practitioner. To provide a smooth transition for my clients and to assist my family, I am providing these guidelines to my Executor and any attorney(s) representing my Executor and beneficiaries under this Will.
      If my practice can be sold to a competent lawyer, I authorize my Executor, in compliance with the Texas Rules of Disciplinary Procedure and other applicable provisions of law, to sell all or part of my practice, including negotiating the price and terms of sales, provided such sale is in accordance with the requirements of the Texas Disciplinary Rules of Professional Conduct, and where necessary, appointing a custodian attorney to manage the transition of my client files. If a sale is possible, I believe that it will provide maximum benefits for my clients as well as for my employees and family.
      
      [Optional:] If my practice cannot be sold and I have client files, I recommend that, subject to consent of my clients, estate planning and probate files be referred to (name); real estate files to [name]; corporation, partnership, and limited liability company files to [name]; family law matters to [name]; and personal injury files to [name].
      
      In either instance, I recognize that my practice has developed because of personal relationships with my clients and that they are free to disregard my suggestions.

5. Designating a Custodian Checklist
   
   
   1. Recognize the Need for a custodian to close your practice in the event of an unexpected, sudden cessation.
   2. Choose a Custodian: Choose one or more potential custodians and talk with them about their role, duties, and willingness to serve. Consider agreeing to reciprocate as appointed custodians for each other.

   3. Designate the Custodian through the State Bar of Texas online portal.

   4. Custodian Agreement: Consider drafting a custodian agreement for signature by you and your custodian. While it is not necessary if you named a custodian through the State Bar portal, it is helpful to clarify the specifics of what you’d like the custodian to do, especially if you have more than one custodian. See section F., “Forms and Resources for Designating a Custodian,” below for a sample custodian agreement.
   5. Estate Planning Documents: Consider authorizing your agent under power of attorney or personal representative to make a custodian agreement with a qualified lawyer if there is no custodian named or able to serve as custodian for the practice files and to access and handle computers, digital files, bank accounts, and trust accounts. See section F., “Forms and Resources for Designating a Custodian,” below for sample will and power of attorney language.
   6. Notify Clients: Notify clients in your initial engagement letter of the need for appointment of a custodian and request consent for the custodian to access client files in the event of sudden cessation. Notify existing clients of the intent to name a custodian with a letter similarly requesting consent. See section F., “Forms and Resources for Designating a Custodian,” below for a sample engagement letter and notice letter language.
   7. Client Files: Maintain a client list and keep files organized for a smooth transition. Consider digitizing active files. See chapter 2, “File Management and Ensuring Password Access,” for more Information, checklists, and sample file management policy and procedures.
   8. Passwords: Read chapter 2, section C, “Ensuring Password Access Practice Tips,” to determine to determine the best way to maintain passwords. Give log-in information or where to find it to your custodian for access to your client file records, firm financial records, and other practice-related databases so it is accessible when later needed.
6. Forms and Resources for Designating a Custodian
   
   
   1. Forms
      1. Sample Custodian Agreement
      2. Sample Will Language
      3. Sample Power of Attorney Language
         1. Sample Instructions for a Solo Practitioner’s Will
      4. Sample Engagement or Notice Letter Language on File Retention and Custodian
      5. Sample Closing Letter Language on File Retention and Custodian
   2. Resources
      1. State Bar of Texas online custodian designation portal
      2. Succession Planning on State Bar’s Law Practice Management website

¹ Jimmy Brill pioneered many works out of concern for Texas lawyers. He organized Solos Supporting Solos and authored the standard, “Dealing with the Death of a Solo Practitioner.” Jimmy was the principal author, editor, and project director of the Texas Probate System from 1971 until his retirement in 2019. He also received two lifetime achievement awards from the American Bar Association: one for law practice management and one for service to solo and small firm lawyers. Jimmy practiced primarily as a solo for more than sixty years. He left this world in 2021, but not without leaving instructions for Texas lawyers. He wrote to us about how to say goodbye to practice in a lawyer’s will. 

Note that Jimmy did not wait to die to leave the practice of law. There is a lesson there, something to be said for following the leader. The notion of glory in dying at the end of final argument is illusory. It may seem romantic to the orator, but the legacy unfolds as a look back to lost opportunities. The time to realize value in practice is in life. Know when to say goodbye to practice. Jimmy wrote about it in another standard, “Considerations When Closing Your Law Practice,” Tex. Bar J., Feb. 2013 at 143.