10: Reconcile & Retain

Even if you've never balanced your checkbook, remember that the funds in your trust account belong to others. To protect their money, you must carefully reconcile your internal trust account records with your bank's statements each and every month.

To do so, you must adjust the bank's reported balance to account for deposits and disbursements that never made it onto the statement as follows:

➤ Identify All Deposits Which Are Not Listed on the Bank Statement

➤ Calculate the Total of All of Unlisted Deposits

➤ Identify All Checks/Disbursements Which Are Not Listed on the Bank Statement

➤ Calculate the Total of All Unlisted Checks/Disbursements

➤ Add the Subsequent Deposits to the Balance Reported on Your Bank Statement

➤ Subtract the Subsequent Checks/Disbursements from the Balance Reported on Your Bank Statement

The balance reflected on your internal ledger should equal the adjusted bank balance, resulting in a monthly reconciliation report which looks like this:

Create a Reconciliation Report Every Month

You must retain this reconciliation report and the underlying data (i.e., the trust ledger, bank statements, copies of canceled checks, deposit slips and receipts) for however long your jurisdiction requires. In most places, that's a period of five to seven years. If you use accounting software to maintain your ledgers, properly backing up your data will preserve most of your internal records forever. The beauty of computer-generated data is that you will be able to access and print a variety of reports at the push of a button.

Despite what the rules may say, you would be wise to retain this data indefinitely. If you've obeyed your Ten Commandments of Trust, this will prove the pristine nature of your account.

Attorney Grievance defense attorney specializes in defending lawyers in disciplinary proceedings before the Maryland Attorney Grievance Commission and the D.C. Bar's Board on Professional Responsibility involving professional misconduct, legal ethics, disbarment, suspensions of law licenses, petitions for disciplinary action, reprimands and sanctions for unethical conduct. If you receive a letter from Bar Counsel Lydia Lawless, Disciplinary Counsel Hamilton Fox, or from any attorney disciplinary board in Maryland or the District of Columbia, retain experienced attorneys with expertise in lawyer discipline and breach of ethics cases to avoid sanctions for professional misconduct. We help lawyers avoid disbarment, suspension, reprimands, censure and informal admonitions by drafting responses to client grievances and ethical complaints; representing lawyers in peer reviews, evidentiary hearings, and oral arguments before the BPR and the Court of Appeals; filing petitions to reinstate an attorney's license to practice law; conducting law firm ethical compliance audits; and drafting legal ethics opinions to protect lawyers from ethics charges. In many cases, disciplinary proceedings may be dismissed, dismissed with a warning, or result in a conditional diversion agreement with Bar Counsel to rectify misconduct. Lawyers may need help in managing their law firm attorney escrow IOLTA trust account and complying with attorney trust accounting rules to avoid charges of ethical misconduct. Do not represent yourself in responding to an attorney grievance, law firm client complaint, or other allegation of ethical impropriety. Attorney grievance defense counsel may help you comply with legal ethics rules, avoid sanctions like suspension or disbarment, and avoid future attorney grievances.

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