9. Safeguarding Funds & Other Property

Question 1

what should you do with client property?

Answer 1

1) DO NOT COMMINGLE

2) if it’s non-cash, treat it with a fiduciary standard.

Question 2

how should you separate accounts?

Answer 2

1) put firm’s money in office account

2) put client money in client trust account, BUT FIRM can put money in CLIENT account for BANK CHARGES.

Question 3

where should the client account be held?

Answer 3

1) state of office from which client is represented, UNLESS client consents otherwise

Question 4

what kind of client account should you create?

Answer 4

1) IOLTA accounts—pooled accounts for small sums (more financially doable this way) (BUT despite the fact that it’s grouped, you need to keep track of whose is whose).
2) for certain high-net-worth (etc.) clients, you can create separate accounts.

Question 5

what should you do if an account bears interest?

Answer 5

DONATE TO CHARITY

Question 6

what are your responsibilities to client?

Answer 6

1) keep complete records of all money & property
2) preserve for 5 years after end of representation
3) promptly comply if client requests accounting
4) promptly notify client if firm receives property in which client has interest (e.g. settlement check)
5) if client has creditor, etc., promptly notify creditor of recovery
6) promptly deliver property to appropriate entity

Question 7

what if there’s a client-lawyer dispute over money?

Answer 7

keep DISPUTED portion in client trust (give client what is certainly his; keep what is certainly yours)

Question 8

what if there’s a client-3P dispute over money?

Answer 8

keep DISPUTED portion in trust until resolved