Attorney Ethics Counsel

May 12, 2021

Check Yourself on Attorney-Client Trust Accounts

Legal headlines recently have been awash in tales of wrongdoing related to attorney-client trust accounts. While your own trust account issues are, hopefully, less serious than grand theft, it’s a reminder that California law firm partners and managers should periodically review the rules for attorney-client trust account and regularly review compliance with the Rules.

Here’s a step-by-step guide to get you started.

First, review California Rule of Professional Conduct, Rule 1.15, entitled “Safekeeping Funds and Property of Clients and Other Persons,” which governs attorney obligations related to client trust accounts and other property.

Second, review the State Bar of California’s “Handbook on Client Trust Accounting for California Attorneys,” which walks through the setup and maintenance of client trust accounts and related obligations.

Third, review the “Rights and Responsibilities of Licensees,” Title 2, Division 5 of the Rules of the State Bar of California and California Business and Professions Code sections 6091.2, Article 14 – 6211, 6212, and 6213, regarding client trust accounts.

Fourth, review the State Bar of California’s FAQs about IOLTA accounts.

Finally, and most importantly, review your firm’s operations and practices for client trust accounts. Is your firm in compliance with all applicable rules? What safeguards are in place at your firm to ensure that attorneys and staff are trained in their obligations related to client trust accounts? Can your firm’s processes be improved to avoid the potential for future errors, or worse?

The headline-grabbing client trust account debacles are probably not your big concern. But ensuring your firm’s compliance with the letter and spirit of the client trust account rules is your responsibility, and this is a non-delegable duty for all California lawyers.

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