Cessation of Practice Plan and Follow Up
A member who is considering retiring from private practice has to complete and forward to the Law Society Executive a cessation of practice plan. That plan has to be sent to the Executive at least 14 days before the anticipated retirement date.
Rule 62 specifies what needs to be in the cessation of practice plan. The key element is what is going to happen to your files and client documents, including wills titles and other valuables. Also, what is going to happen to any funds in your trust account.
Once submitted, the plan may be approved by the Executive. The Executive may require you to address any concerns the Executive has with your plan.
Following retirement, you must also provide a written report to the Law Society Executive within 90 days of ceasing practice, confirming that the actions set out in the cessation of practice plan have been followed, that trust monies have all been returned to clients, and that interest on trust accounts will be submitted to the NWT Law Foundation.
Change of Status
A member who is retiring from private practice may also want to change status from active to either inactive or retired. Depending on your intentions, one category may be preferable to another.
Inactive members pay a reduced fee to the law Society, are not required to be insured, and maintain membership status. Inactive members can return to active membership within three years of becoming inactive by completing the required forms and paying the required fees. More details are set out here.
Retired members are no longer members of the Law Society. If you are a retired member, and later want to return to active practice, you will be treated as a new applicant for membership. You may be required to complete certain activities, such as completing the bar examination, or engaging in a period of articles, as a precondition to your re-admission.
Form 2.4 – Accountant’s report
Even though you have retired, you will still be required to provide Form 2.4, an Accountant’s Certificate. That Certificate will be required for the period of time up to the date of your retirement.
Timing of Retirement
A couple of factors that you should be aware of in considering the date of your retirement:
- Law Society membership fees are due on March 31. If you renew, you must renew for the entire year, even if you are only planning to practice for part of the year. There is no prorating of the membership fees in the event of retirement part way thought the year.
- CLIA mandatory insurance assessments are due June 15, and the insurance year begins July 1. Though you can pay the assessment in two installments, the full amount is due on June 15, even if you intend to practice for only part of the year. Again, there is no prorating of the insurance assessment in the event of retirement after the start of the year.
- Also, when is your firm year end? Do you want to retire in the middle of a fiscal year? Do you want to be required to complete another Form 2.4 for a partial year of practice?
Here are some links to resources that may be useful in planning for your retirement:
The Law Society of Alberta has prepared a useful Checklist for those on the road to Retirement;
The Law Society also has a helpful list of milestone dates to consider when closing a law firm.