Ajax Privacy and Cybersecurity Lawyer, Rajen Akalu, of Akalu Law P.C., provides his thoughts on contingency plans.

Why everyone needs a contingency plan

I worry a lot about how my students find work in the current economy.  It’s hard to secure a job, let alone job security.  Things were difficult for me when I was trying to land my first job as a foreign-trained lawyer, it’s arguably more challenging now.  Most recently the labor market has been characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.  This phenomenon has been termed the gig economy.  It’s difficult to prepare students to work in the gig economy because their jobs are constantly being subjected to last-minute scheduling and highly unpredictable.  While working this way may give you a sense of control and flexibility, in practice quite the opposite is true.  It’s hard to balance your life this way; it’s too unpredictable.   Having employees that are flexible and on-demand is great for businesses as this allows them operate more efficiently and predictably.  You can learn how to do this from how businesses plan for contingencies.  This is true whether you’re an Uber driver, an employee and especially if you’re a business owner.  So I as outline the requirements for a business continuity plan, think about how you plan for contingencies in your own life.  Consider it an exercise in personal resilience.

For a business, hope is not a strategy. Market shifts, natural disasters, cyberattacks, supply chain disruptions.  A contingency plan gives you a blueprint to act fast and recover smart when things go sideways.  It’s actually the case that a business without a robust contingency plan are statistically more likely to go out of business.

So, what exactly is a contingency plan, and how can you create one that actually works

What Is a Contingency Plan?

A contingency plan is a proactive strategy designed to help businesses respond effectively to potential disruptions or crises. Think of it as your backup playbook—ready to go when your main game plan falls apart. It’s not just about surviving disasters; it’s about minimizing downtime, protecting assets, and maintaining customer trust.

What are the benefits of a Plan?

  • Reduces Downtime: The faster you react, the less time you lose—and in business, time is money.
  • Protects Your Brand: Customers remember how you handle crises. A strong response can boost credibility.
  • Safeguards Operations: Whether it’s a ransomware attack or a supply shortage, a contingency plan helps you stay functional.
  • Supports Decision-Making: With a plan in place, your team isn’t scrambling under pressure—they’re following a tested protocol.

Key Elements of a Strong Contingency Plan

Here’s what to include in your business’s contingency plan:

  1. Risk Assessment Start by identifying the biggest threats to your business. These could include:   Natural disasters (floods, earthquakes, hurricanes), Cybersecurity breaches, power outages or infrastructure failure,  key staff turnover, supply chain disruption, economic downturns.  You’ll need to analyze the likelihood and potential impact of each.
  1. Critical Business Functions Which parts of your operation are mission-critical? Prioritize areas like:  Customer service,  IT systems  and data access,  financial operations, manufacturing or product delivery. Knowing what must be protected helps you allocate resources wisely.
  1. Response Strategies For each risk, define a specific response. Include:  Immediate actions (e.g., system shutdowns,  emergency alerts),  communication protocols (internal and external),  backup systems or alternate vendors Staff roles and responsibilities.
  1. Communication Plan Clarity is key in a crisis. Who notifies who? How will you update employees, customers, or stakeholders? Include templates for emails, press releases, and social media responses.
  1. Testing and Training A plan is only as good as your ability to execute it. Run simulations. Train your team. Identify gaps. Make adjustments. Rinse and repeat regularly.
  1. Review and Update Contingency planning isn’t a one-and-done task. Revisit your plan every 6–12 months—or anytime there’s a major change in your business or the environment.

Real-World Example: Small Laws firms in Ontario

Starting January 1, 2025, lawyers and paralegals in private practice must develop and maintain a client contingency plan for the preserving, carrying on, or winding up of their professional business.  The Law Society of Ontario (LSO) requires all lawyers and paralegals in private practice to have a Contingency Plan in place to ensure the continuity and proper handling of client matters in the event of an unexpected interruption, such as death, incapacity, or sudden unavailability.

Key Requirements:

  1. Written Contingency Plan:
    Lawyers and paralegals must develop and maintain a written contingency plan. This plan should clearly outline how client files, trust funds, and practice obligations will be managed if the licensee becomes unable to continue practicing.
  2. Designated Contact Person:
    The plan must name a “Contingency Lawyer” (or licensed legal professional) who is authorized and willing to step in to assist with the winding down or transfer of the practice. This person should be familiar with the practice and have access to necessary information (e.g., passwords, client lists, file locations).
  3. Client and Trust Property Protection:
    The plan must include measures to protect and manage client property, especially trust accounts, in compliance with LSO rules.
  4. Communication Strategy:
    Procedures must be in place to notify clients, courts, opposing counsel, and others as needed about the change in status or transition of the practice.
  5. Regular Review and Updates:
    The contingency plan should be reviewed periodically and updated when there are significant changes in the practice or contact information for the designated lawyer.
  6. Sole Practitioners:
    These requirements are particularly emphasized for sole practitioners, as their unavailability can leave no one to manage client matters without a plan.
  7. Guidance and Tools:
    The LSO provides templates and guidelines to help licensees create their plans, available on their website.

This planning is essential not only for regulatory compliance but also to uphold professional obligations and protect clients’ interests during unforeseen circumstances.  More information about the requirement of client contingency planning can be found on the LSO website

Conclusion

Contingency planning is about being prepared. A well-crafted plan can mean the difference between a minor hiccup and a full-blown crisis. Start planning today.  A trusted advisor can help you with this.  It will give you confidence in your day-to-day operations as you’ll feel ‘ready for anything’!

 

Rajen Akalu
647 299 5079
rajen@akalulaw.com