The American Bar Association House of Delegates has adopted new model rules for client trust accounts. The new rules reflect changes in banking laws, technology and legal practice.
The ABA Model Rules for Client Trust Accounts Records will be sent to state courts for potential adoption for compliance with Model Rule of Professional Conduct 1.15. Under 1.15, lawyers must maintain complete records of client trust accounts and must render a full accounting of distribution and receipt of trust property. Every American jurisdiction has has adopted the rules within 1.15 and more than half of the country has added additional rules detailing the trust records that attorneys must retain.
The reason for the update, according to the ABA Standing Committee on Client Protection: due to changes in banking and business practices, many lawyers were "inadvertently running afoul of their jurisdiction's rules of professional conduct."
Some of the changes include:
- Under Check Clearing for the 21st Century Act, which allowed banks to substitute electronic images of checks for canceled checks. Under the ABA model rules, attorneys had been required to maintain the original canceled checks. In addition, more attorneys are using electronic banking features and wire transfers, which often do not include physical conformations. Under the new rule, record-keeping requirements for such transactions are updated and provides new guidelines for such transfers.
- Minimum safeguards are articulated for situations when attorneys allow non attorney employees to access trust accounts.
- Attorneys can maintain client trust accounts in electronic, photographic, computer or other media as well as on paper. The records must be readily accessible to the attorney and available to print upon request. The attorney must make sure that if they are using a third-party for storage, the company must have reasonable procedures in place to protect client confidentiality.
For more details of the new rules for client trust accounts, check out the full recommendation in the related resources.
- Model Rules for Client Trust Account Record (ABAnow)
- Interest on Lawyers Trust Account (LawBrain)
- New and Improved: A Better Way to Earn an Ethics CLE (FindLaw's Strategist)