Improper Handling of Client Trust Accounts
Legal Blog Updates
Managing money is always tricky, especially when it belongs to someone elseThat's why, in 2006 alone, more than 20 lawyers found themselves before the State of Michigan Attorney Discipline Board after having grievances filed against them for mismanagement of their clients' funds.
However, in Michigan, there is an infrastructure in place that allows attorneys to insulate themselves from the consequences of accounting errors - both accidental and otherwise.
Specifically, Michigan Rule of Professional Conduct (MRPC) 1.15 provides guidelines for the two types of client accounts: Interest on Lawyers Trust Accounts (IOLTAs) and non-IOLTAs.
The rule defines an IOLTA as "an interest or dividend bearing account" that "shall include only client or third person funds that cannot earn income for the client or third person in excess of the costs incurred to secure such income while the funds are held."
Though interest is earned on this type of account, the client does not receive those proceeds. Instead, the interest is paid to the Michigan Bar Foundation.
Conversely, a non-IOLTA under MRPC 1.15 also earns interests or dividends, however, that "net interest or dividend will be paid to the client."
MRPC 1.15 applies to both pooled and individual client trust accounts. But, because "it is common for a lawyer only to maintain one pooled client trust account," said Professor Lawrence A. Dubin - who teaches Professional Responsibility at the University of Detroit School of Law - IOLTAs, rather
than non-IOLTAs, may be easier for attorneys to work with.
However, that doesn't mean that IOLTA administration is without its own pitfalls.
In fact, with penalties ranging from a slap on the wrist to a permanent loss of license, learning the ins and outs of proper client trust management is fast becoming an integral part of effective practice management.
Related listings
-
Lawyer to be Suspended Over Conduct
Legal Blog Updates 04/03/2008The former head of the Wayne County, MI Prosecutor Office's drug unit will be suspended with pay Friday and now faces an investigation that could lead to criminal charges for her actions in a 2005 cocaine case.Prosecutor Kym Worthy, in a prepar...
-
DOJ Presses Bribery Case
Legal Blog Updates 04/02/2008A US Department of Justice spokesman said Monday that the department would continue to press its bribery case against Rep. William Jefferson (D-LA) despite the US Supreme Court's refusal to review an appeals court ruling that held the FBI's conduct d...
-
New Hampshire Adopts Rule for Clients Who Email
Legal Blog Updates 03/28/2008New Hampshire adopted a rule that clearly protects persons who, in good faith, e-mail confidential information to a lawyer from having the lawyer use the information against the prospective client. The comments to New Hampshshire Rule 1.18 prov...
Illinois Work Injury Lawyers – Krol, Bongiorno & Given, LTD.
Accidents in the workplace are often caused by unsafe work conditions arising from ignoring safety rules, overlooking maintenance or other negligence of those in management. While we are one of the largest firms in Illinois dedicated solely to the representation of injured workers, we pride ourselves on the personal, one-on-one approach we deliver to each client.
Work accidents can cause serious injuries and sometimes permanent damage. Some extremely serious work injuries can permanently hinder a person’s ability to get around and continue their daily duties. Factors that affect one’s quality of life such as place of work, relationships with friends and family, and social standing can all be taken away quickly by a work injury. Although, you may not be able to recover all of your losses, you may be entitled to compensation as a result of your work injury. Krol, Bongiorno & Given, LTD. provides informed advocacy in all kinds of workers’ compensation claims, including:
• Injuries to the back and neck, including severe spinal cord injuries
• Serious head injuries
• Heart problems resulting from workplace activities
• Injuries to the knees, elbows, shoulders and other joints
• Injuries caused by repetitive movements
For Illinois Workers’ Compensation claims, you will ALWAYS cheat yourself if you do not hire an experienced attorney. When you hire Krol, Bongiorno & Given, Ltd, you will have someone to guide you through the process, and when it is time to settle, we will add value to your case IN EXCESS of our fee. In the last few years, employers and insurance carriers have sought to advance the argument that when you settle a case without an attorney, your already low settlement should be further reduced by 20% so that you do not get a “windfall.” Representing yourself in Illinois is a lose-lose proposition.