Lawyers would have to provide more trust account information in measure passed by ABA House
Lawyers would have to provide more information about trust accounts in which they hold the funds of other people according to model rule changes approved by the House of Delegates on Monday.
Lawyers would have to disclose the names of financial institutions, in addition to account numbers, for each account holding funds for clients and for third persons in connection with a representation.
Lawyers would also have to disclose the names and addresses of people authorized to operate or disburse money from the accounts, and the name and address of the lawyer responsible for complying with the rules governing the account.
Frank Neuner Jr., chair of the ABA Standing Committee on Client Protection, told the ABA House the changes will give regulators better tools to deal with client trust accounts when lawyers or their staff abuse them.
The changes, summarized in Resolution 110, amend Rule 7 of the Model Rules for Disciplinary Enforcement.
A report to the House of Delegates calls the proposed changes “simple but necessary.” The changes make it easier for disciplinary counsel to investigate allegations of misappropriation when the lawyer whose name on the account is not necessarily the wrongdoer.
“It is an unfortunate fact that some lawyers continue to misappropriate client or third person funds,” the report says. According to the most recent information collected by the ABA, lawyers’ funds for client protection paid out claims of about $96.4 million between 2011 and 2013.
Follow along with our full coverage of the 2017 ABA Annual Meeting.