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5 Cards in this Set
- Front
- Back
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A Lawyer withdraws funds and deposits them in his personal or office account, or conversely deposits his own (or his business) funds in client's trust account. Is the atty subject to discipline?
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Yes, a lawyer must segregate his own money and property from that of his clients. He must maintain a separate bank account for client funds, known as a "trust account".
(note: Trust accounts are non-interest bearing - however if a client's funds must be held for a long period of time and the amount in question is lareg, in order to protect the client's investment interest it would be appropriate to deposit them in an interest-bearing account. |
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The lawyer has four principal duties with regard to client "trust account". What are they?
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1. Notify the client promptly when any funds are received from a third party (ie. settlement)
2 Keep accurate records of any client funds the attorney holds 3. Render accurate accountings on request 4. Promptly pay client any funds he requests and is entitled to receive. (note: atty must maintain client's property (e.g.atty. must deposit client's securities in a safe deposit box, or the equivalent and maintain accurate records, as with client's money, jewelry or stock certificates) |
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May an atty. lump all advances fees, negotiating money, or the like - into one account? Is he subject to discipline
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No,It is ok to have one "trust account" for money from all clients, but you have to keep very good records.
(exception: an atty. may put money into the trust account to pay for bank charges) |
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Can an atty. disbursement funds from the client's account?
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No disbursements can be made from a client's trust acccount without the client's consent. Also when you are paying yourself. Or unilaterally arbitrate a dispute between the client and his creditors by paying off the creditor. This is considered a breach of the fiduciary duty - which may result in a malpractice suit)
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How should an atty. handle a dispute regarding fees?
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The atty must keep the disputed portion in the client trust fund account, and must refund to her any undisputed portion (that is the part that, no matter how the fee dispute is resolved, would be hers anyway. (disputed portion should remain in the trust account and undisputed portion must be returned to the client.)
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