- Exact cessation date;
- Home or correspondence address, mobile phone number and personal email address for principal or partners;
- Details re distribution and storage of client files (both closed and open). This includes the identity of the practising solicitor with access to files and written confirmation from that solicitor;
- Confirmation that the firm has applied to the Special Purpose Fund Manager, DWF Claims for entry to the Run-off Fund or alternatively, confirmation of a succeeding practice;
- Closing reporting accountant’s report.
Cessation in practice
When a firm must cease
A solicitor firm must cease in the following circumstances:
- The firm is being sold or transferred (e.g. merger or acquisition); The firm principal or partners are retiring, and the firm is being wound up.
- The firm’s structure is changing (i.e. going from a sole principal practice to a partnership, or vice versa, or adding new partners to smaller firms).
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The following information should be provided to the Law Society:
Wind-up of practice
It is prudent for a firm to have a wind-down plan in place to ensure that the firm is prepared to execute a voluntary wind-down. Firms should plan for the costs involved for the wind down of a firm. It is imperative that solicitors notify the Law Society in writing of an intention to cease practice, and the Law Society will provide the cessation requirements which must be met.
The voluntary wind down of a firm should be done over a period of time. Ideally, the solicitor should not take any new work but may continue to work on any current files until each file is finalised and closed and there are no current files remaining.
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Notifying the law society
Whether a practice is sold or wound up, the Law Society should be sent notification in writing so that records can be updated. The following information must be provided to the Law Society in writing:
- Ongoing notification to the Law Society regarding the progress in distribution of live and closed files.
- Written confirmation (in due course) that all live files have been forwarded to new solicitors nominated by the clients.
- Written confirmation that closed files have been returned to clients where appropriate or held in storage (not at home or in a private residence), and the details of where the files are being stored.
- Written confirmation that closed files in storage are accessible by a nominated practising solicitor upon request by the client or the Law Society for access to the file, including the identity of the nominated practising solicitor, and written confirmation from the practising solicitor that they are willing to act in that capacity.
- Written confirmation that all Wills, title deeds and enduring powers of attorney in respect of the closed firm have been transferred to another firm or returned to clients. Solicitors often notify their local bar association of their cessation from practice to inform them of the arrangements being made in respect of Wills.
If a solicitor is continuing to practice, but in a different practice situation, it should be noted that Section 81 of the Solicitors Acts, 1954 requires a practising solicitor to give notice to the Registrar of Solicitors of any change in the solicitor's place of business, within fourteen days after the change is made.
The Law Society should be informed of the identity of any practising solicitor(s) to whom files have been transferred. This is important so that Law Society personnel can answer queries from clients in relation to the whereabouts of their files after a solicitor has ceased practising or has retired from practice.
Notifying the client
When a sole practitioner ceases to practice, or all the partners in a partnership cease to practice, prompt notification to the clients of the firm should be made. It is then a matter for each client to decide to instruct a new solicitor. Further information can be found in the Further information can be found in the Solicitors Guide to Professional Conduct (4th Edition).
It would not be proper for any firm to take over the affairs of a client, including money and papers held, without the client concerned first providing their written authorisation to do so.
It should be noted for client files of all firms that the file is the property of the client, not the firm, and the client is entitled to their file.
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Distribution of files
- As an alternative to completing the work on the files, the solicitor may opt to distribute the files to new solicitors nominated by the client(s). Accordingly, it will be necessary to write to the client informing them of the wind-up of the practice and ask them to nominate a new solicitor. The files will then be distributed in accordance with that nomination.
- Solicitors should ensure that the practising solicitor who has access to the open and closed files of the ceasing solicitor’s former practice retains those files for the appropriate statutory periods. Solicitors who cease private practice should note that the mandatory periods for the retention of files and papers can be considerable, ranging from six years to an indefinite period. The cost of storage of files for such a long period should be kept in mind. For more information, see the Practice Note: Data retention and destruction of paper and electronic files.
- Solicitors should notify the Law Society in writing of the identity of the practising solicitor to whom client files have been transferred and provide confirmation in writing that those files have been received. The solicitor ceasing private practice should also provide the Law Society with the identity of any practising solicitor with access to closed stored files and written confirmation from that solicitor of same.
- If the solicitor nominated at any time changes, the Law Society must be immediately notified in writing and an alternative practising solicitor appointed. A practising solicitor must have access to the stored closed files of the firm at all times.
- All Wills, title deeds and Enduring Powers of Attorney in respect of a closed firm should be transferred to another firm of solicitors or returned to clients. Solicitors local bar association of their cessation from practice to inform them of arrangements being made in respect of Wills.
- A solicitor ceasing private practice should be aware that clients are often very slow to take up their files in circumstances where a firm is being wound down. So long as any work is being done on any files, the solicitor must have Professional Indemnity Insurance (PII) for the firm and hold a current Practising Certificate.
- The solicitor should consider the expenditure involved in having to take out a Practising Certificate and PII on an ongoing basis until the last file is completed.
- A solicitor should not underestimate the time that it may take to wind up the practice. For instance, queries may arise in relation to an application for registration in the Land Registry so that registration could not be finalised for many months or even years.
- Accordingly, an objective of completing the work on every file, within a given deadline may not be achievable.
- A solicitor ceasing private practice should arrange with a practising solicitor to take over the live files and complete the work, subject to each client’s written authorisation. If clients have already paid their own bill, the retiring solicitor may have to pay the new solicitor to complete the file. In those circumstances, the clients would have the option of instructing a different solicitor at the expense of the solicitor ceasing practice.
Transfer of files
If the files are being transferred to other firms or between various firms, details should be provided to the Law Society in writing advising of the location of the files along with confirmation that those files have been received. The solicitor should also confirm the position in relation to client monies.
Solicitors should note that the client file is the property of the client once all fees and undertakings have been discharged. If you are transferring files to another firm, you may refer to the Practice Note: Transferring files between solicitors.
Can the law society take the files for me?
No, the Law Society cannot deal with the wind-down of your firm on your behalf and client files cannot be sent to the Law Society to distribute. It is the responsibility of each principal of a firm to ensure the proper cessation of the firm and distribution of client files and monies. Failure to do so is considered to be an abandonment of practice and serious misconduct.
The Law Society only takes client files and monies from a distressed closure of a firm where a High Court order is obtained, normally where a solicitor has been struck off. The principals of such closed firm, or the estate of the principal (if deceased) are responsible for the full payment of the costs involved, including the costs of obtaining the High Court order and can be pursued for same by the Law Society. The average minimum cost of the closure of a small practice by the Law Society is €80,000.
It should be noted that, in cases where a High Court order has been made for the Law Society to take files and client moneys, the Law Society cannot carry out any legal work on the files and can only carry out a file distribution exercise.
Costs
Firms should budget for costs which may arise in the voluntary or involuntary closure of a firm which may include, but are not limited to the following:
- Accountant’s fees;
- A destruction exercise for closed files where the statutory period for retention has expired;
- Salaries for staff to complete the work on the closure of the practice;
- Redundancies;
- Costs of other firms who may need to be paid to carry out certain work which the ceasing firm may be responsible for the costs of, including dealing with outstanding undertakings.
Sale of practice
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The following information must be provided to the Law Society as part of the notice of cessation of practice:
- The date on which the firm is being sold/transferred.
- Clarification on whether all files (including closed files) are being sold or transferred to one firm, the identity of the firm, and written confirmation from the firm that they will take the files. If the files are being distributed between various firms, details relating to the distribution of files should be provided.
- Confirmation that all client moneys are being transferred as part of the sale/transfer.
- If the new firm is a succeeding practice, written confirmation must be provided from the new firm that they are covered by their PII as a succeeding practice. If the new firm is not a succeeding practice, confirmation must be provided from the Run-off Fund that the closing firm will be provided with run-off cover from the fund.
Changing firm structure
If a firm is changing from a sole practitioner to a partnership, from a partnership to a sole practitioner or from one sole practitioner to another sole practitioner, it is necessary to execute both a cessation and commencement for the practice. This is the case even if the solicitors in the practice remain the same and / or the name of the practice does not change.
See Succession planning to explore several case studies and regulatory insights to ensure that your firm's succession plan is both effective and compliant.
Moving from private practice to practice in the full-time service of the state
Sole practitioners who intend to cease private practice with the intention of commencing practice in the full-time service of the State are required to execute the cessation of their practice before commencing their new position. A solicitor will be deemed to be practising in the full-time service of the State if they are required to devote the whole of their time to the service of the State as a solicitor and are remunerated in respect of such service wholly out of moneys provided by the Oireachtas.
Solicitors who commence practice in the full-time service of the State are required to submit a separate Service of the State application form to the Law Society, but no fees are payable in respect of this application. Solicitors in the full-time service of the State may pay for optional items including memberships of the Law Society and the Solicitors’ Group Life Assurance Scheme. The Law Society does not issue a Practising Certificate to a solicitor in the full-time service of the State, but this status is reflected on the Register of Practising Solicitors.
Solicitors in private practice who have been granted a Practising Certificate and subsequently commence practice in the full-time service of the State during the practice year may apply to the Law Society for an ex-gratia refund of their Practising Certificate fees for the remainder of the year. The granting of an ex-gratia refund is solely at the discretion of the Law Society and there is no automatic entitlement to same.
Advice for sole practitioners
The Law Society strongly recommends that sole practitioners set up arrangements with a colleague to apply to the Law Society to act as a practice manager in the event of the sole principal’s death or incapacitation. If possible, details of this arrangement should be included in the Will of the sole principal.
Further details on planning for emergencies in a sole practitioner firm, including agreements for management, power of attorney and enduring power of attorney, can be found in the Practice Note: Planning for Emergencies in a Sole Practitioner’s / Principal’s Firm.
Accounts Regulations
A solicitor ceasing private practice is required to comply with their obligations under the
Solicitors Accounts Regulations 2023 (S.I. 118 of 2023) to provide a closintant’s report to the Law Society.
When a practice ceases, a closing Reporting Accountant’s report must be submitted to the Law Society covering the period from the date of the last annual Reporting Accountant’s report to the date at which the practice ceased to hold, control, receive or pay client monies. This report must be filed with the Law Society within three months of the date of cessation of the practice and should have zero balances as per the bank statements at the accounting date. If you have any query in relation to this requirement, please contact the Financial Regulation Section at financialregulation@lawsociety.ie.
Change of structure closing accountant’s report
If your firm has changed structure as detailed above, the Law Society recommends that the bank accounts of the practice are closed and new bank accounts opened. However, if it is not practical to close the bank accounts then the Law Society will need the following items in addition to a closing Accountant’s report at the cessation date:
- A letter from your Reporting Accountants stating that they are aware of the change of structure of the firm and confirming that the client account will not be closed;
- A letter from your bank stating they are aware of the change of structure of the firm, and;
- A copy of your latest bank mandate.
Clients' moneys
Sale of practice
If the practice is being sold and a balance remains on the client account, this amount should be transferred to the purchasing solicitor. The purchasing solicitor should ensure that the amount agrees with the cash position in the client account.
The purchasing solicitor should also be given the relevant ledger cards to enable the ownership of the clients' funds to be identified. The purchasing solicitor will then be responsible for accounting to the clients and to the Law Society for the clients' monies.
Wind-up of practice
In a wind-up situation all remaining balances must be distributed to the clients. The retiring solicitor must take all necessary and reasonable steps to trace the clients, including advertising if appropriate.
