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Ten Commandments of Trust

​​Q. As the new managing partner of our firm, I have no idea how to manage our trust account. What must I do to comply with the rules?

A. With little more detail than that offered in the Ten Commandments, law school ethics professors taught us that "Thou Shalt Not Steal" from our clients.

But protecting client funds is more complicated than that. Without proper maintenance and record-keeping, honest lawyers can quickly lose control over their client trust accounts, violate the Rules of Professional Conduct and face serious sanctions.

Meeting our ethical obligations takes more than "good character." It takes work.

This is a daily exercise. Every deposit and every disbursement must be documented. Every deposit slip and check must be copied or otherwise maintained electronically through properly configured accounting software.

It's a lot easier with the right software. But with or without a computer, you must keep ledgers of all transactions, both for the account as a whole and for each matter involving trust transactions. Rather than relying on your bank, you must check its monthly statement for errors, inspect copies of your canceled checks, and reconcile the bank's balance with your own ledgers each and every month.

The nuances of trust accounting can fill an entire course. But our Ten Commandments of Trust review the basics that Moses, and your law school ethics professor, glossed over:


  • 1: In "IOLTA" We Trust1: Open Thy Trust Account

    Open the right type of account at an approved financial institution.

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  • 2: Do Not Commingle2: Thou Shalt Not Commingle

    Keep client funds separate from your own.

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  • 3: Watch Your Withdrawals3: Watch Your Withdrawals

    Know when and how to disburse.

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  • 4: Forget Remembering4: Forget Remembering

    The only memory you should rely upon is your computer's.

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  • 5: Trust Your Ledger5: Trust Your Ledger

    Maintain an orderly record of all transactions on your trust account.

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  • 6: Account for Your Clients6: Account for Your Clients

    Separately account for all trust activity in each of your cases.

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  • 7: Check Your Checks7: Check Your Checks

    To prevent errors and fraud, always check your checks.

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  • 8: Don't Bank on Your Bank8: Don't Bank on Your Bank

    Your bank will make mistakes. Catch them.

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  • 9: Trust, But Verify9: Reconcile Your Account

    Compare your ledgers with your bank's monthly statement.

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  • 10: Reconcile & Retain10: Reconcile & Retain

    Complete a reconciliation report and save all of your records for as long as legally required.

    Read more ...
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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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By The Lawyer's Lawyers | Kramer & Connolly and Irwin R. Kramer who are responsible for the content of this informational website.   This website is designed for lawyers faced with attorney grievances. As cases do differ, past performance does not guarantee future results.
 

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