FEATURES Selling Your Practice Responsibly Jason V. Morgan, PRP

Selling Your Practice Responsibly

By Jason V. Morgan, PRP

Under the retired Code of Ethics for Parliamentarians, it was difficult to sell a parliamentary practice when retiring or moving away from local clients. Potential buyers would be concerned that paying for a practice would mean impermissibly giving something of value to someone for recommending their services. This limited the potential for the profession to grow. But under the newly adopted Code of Professional Responsibility for Parliamentarians, parliamentarians are explicitly allowed to purchase a parliamentary practice. This change could be seminal.

Parliamentarians now have more incentive to grow their practices, build relations with clients and colleagues, and develop practices, procedures, contacts, and other tangible and intangible assets that can be packaged for sale to parliamentarians seeking to quickly expand their own practices. This means that parliamentary practices are likely to become more professionalized, thus creating value for clients and to new and potential parliamentarians alike.

Parliamentarians have new opportunities to invest or earn material reward, but they also face new risks. Because this is a new provision, and because parliamentarians rarely buy or sell their practices, understanding how to navigate these risks is vital.

The clause to allow a parliamentarian to pay for the purchase of a parliamentary practice was inspired by the American Bar Association’s (ABA) Model Rules for Professional Conduct, Rule 1.17. Under the ABA rules, a lawyer may sell or purchase a law practice if (1) the seller ceases to engage in the private practice of law in the area or jurisdiction in which the practice has been conducted, (2) the entire practice is sold to another lawyer or law firm, (3) the seller gives written notice of certain client rights to each of the seller’s clients, and (4) fees charged to clients are not increased by the sale.

Although the Code of Professional Responsibility is less detailed than the rule that lawyers follow, parliamentarians should follow similar practices to protect their clients and to protect themselves:

First, when buying or selling a parliamentary practice, the seller must cease to practice in the area where parliamentary services have been provided. This could be a geographic area or an area of service. For example, a seller who is moving to a new state, shifting from serving homeowners associations to serving charitable nonprofits, or retiring from paid parliamentary practice altogether would likely have no difficulty showing that the parliamentary practice sale was legitimate and not just a cover for a prohibited scheme in which clients are developed and then sold like commodities.

Second, the parliamentarian selling the parliamentary practice must evaluate potential buyers to make sure they are

qualified to offer continued quality services. The seller must practice due diligence, especially if the seller’s clients have complicated structures or dynamics requiring high levels of knowledge, skills, and abilities. Sellers also must practice due diligence by, for example, reviewing résumés of potential buyers to verify that they have current credentials, interviewing potential buyers, and talking with potential buyer references. At some point before the sale, the buyer may also need to review enough information about the seller’s clients to ensure that the buyer can provide service without conflict. Parliamentarians have duties to their clients regarding matters such as withdrawing from employment (rule 4.7); not misrepresenting parliamentary credentials, education, experience, or other qualifications (rules 2.1 and 3.1); fulfilling agreements with clients (rule 4.1); and declining certain appointments (rules 3.3 and 3.4). All these provisions can come into play when a parliamentary practice is sold.

Third, before the sale is finalized, the seller should contact all the seller’s clients to inform them of the proposed sale, to inform them that they may choose another parliamentarian or take possession of the files the parliamentarian has for them (rather than allow them to be transferred to the buyer), and to give them an opportunity to object to the transfer. In fact, before finalizing the sale, the seller should seek informed consent from all clients to meet the requirement of confidentiality under rule 4.4.

Fourth, fees should not increase because of the sale. The sale of a parliamentary practice cannot be used to avoid the seller’s obligation to provide service “in accordance with any agreement with the client” under rule 4.1. Although fees can eventually be raised, reasonable client expectations of continuity should be met. Moreover, the time and expense spent by the seller and buyer in transferring the practice cannot reasonably be charged to the clients. Such charges would reflect adversely on the profession and be a violation of rule 2.1.

Parliamentarians should be careful when buying or selling a parliamentary practice, but they should not let the risks deter them from exploring opportunities to quickly expand or accept reasonable renumeration as a reward for contributing to the profession. With reasonable effort and diligence, parliamentarians can transfer parliamentary practices while protecting themselves and their clients. And now that parliamentarians can get rewarded for building up their services, while helping provide for continuity of services to clients, much of the potential for the parliamentary profession to expand has been unleashed. NP

Jason V. Morgan, JD, PRP, CP, has served on the NAP Professional Standards Committee since 2019. In addition to providing parliamentary services to organizations in the Washington, D.C., metropolitan area, Mr. Morgan has a long career in government service that has included service related to both technology and law. The opinions expressed in this article are those of Mr. Morgan alone.