safeguarding money and property of clients and others

Question 1

retainer

Answer 1

types:

1) advanced payment retainer: belongs to client, goes into trust account
2) general retainer: belongs to atty, goes into lawyer’s acct

Question 2

separate accounts

Answer 2

lawyer must deposit money in and withdraw money from proper accounts

two types of accounts every lawyer must have:

• operating: firm’s acct (lawyer’s money)
• client trust: only client’s money

rules on client trust accounts:

• generally, ok to have one and use it but keep records of use and don’t mix two accts
• specifically, acct must be in bank in NY, funds to maintain the acct are the only lawyer funds that can be put in the acct, and client funds must be placed in a bank that provides dishonored check reporting when check bounces (if bounces, copy of report is mailed to lawyer and after 10 days, report is sent to disciplinary committee. lawyer cannot go and deposit additional sums in acct from own funds)

Question 3

common client trust account problems

Answer 3

• borrowing small amt from client trust and executing promisory note to pay back is still conversion, even if paid back
• can transfer money from client trust acct to operating if done work provided the transfer occurs within a reasonable time after sending client invoice
• if dispute over billing, leave disputed portion of money in client trust acct until dispute is resolved