Introduction:
The LA Times reported that “more than 1,700 attorneys were found in violation of the rules and enrolled as “inactive” with the bar, meaning they’re not legally allowed to practice law” The LA Times draws attention to the seriousness of trust compliance, a hot topic recently as the ABA recently issued an ethics opinion on Trust administration in May 2023.
The California State Bar reportedly took strong action against attorneys who disregarded the new rules governing trust accounts, according to the LA Times. These rules, designed to maintain transparency and protect clients’ funds, were implemented [JULY 28, 2023 1:56 PM PT] and have since become a crucial aspect of the legal practice in the state. As quoted from the October press of 2022 states,
- “Report annually to the State Bar whether they are responsible for client trust accounts and provide basic account information. Law firms will be able to report account information for lawyers who work for them.”
- “Complete an annual self-assessment that highlights specific rules and requirements for managing a client trust account.”
- “Annually review the applicable Rules of Professional Conduct related to safeguarding client funds and certify to the State Bar that they comply with those rules.”
Lawyers who violate the rules risk being suspended from practice and having their professional reputations tarnished. These suspensions reflect a heightened state and national focus on respecting client funds and the necessary record keeping to maintain compliance. California lawyers are reviewing their records now, many of whom likely can not reconcile their accounts.
The article in the ABA Journal also illuminates the opinions of legal experts on this subject. While some contend that stringent enforcement is required to uphold ethically standards and protect the interests of clients, others counter that the suspension of so many lawyers might obstruct access to justice and legal counsel. Balancing detailed record keeping with an attorney’s current workload is just one additional administrative hurdle for the vast majority of those attorneys in private practice. With a lack of qualified employees law firms have to maintain compliance, but do so in a way that leverages time and resources.
Conclusion:
The ABA Journal emphasizes the crucial problem of California lawyers’ non-compliance with trust account regulations. The legal community is facing a significant challenge to uphold confidence and accountability with over 1,700 practitioners potentially facing suspension. Legal experts and observers alike continue to disagree on the ramifications of such a suspension, which might have broad repercussions. Lawyers all over the country need to review their trust accounts now. Additional states are likely to follow suit, increasing the regulation and scrutiny attorneys can expect to face in the upcoming months and years. All attorneys should critically consider current practices, current providers and determine if current practices are best practices. If you are not sure, contact firmTRAK Solutions for an audit and assessment of your practices.
References:
- LA Times – “Over 1,700 attorneys found in violation of rules and enrolled as ‘inactive’ with the bar, leading to potential practice suspension.” Read More
- The State Bar of California – Guidelines for trust account compliance, including annual reporting, self-assessment, and review of Rules of Professional Conduct. Read More
- ABA Journal – Expert opinions on the complexities of trust compliance enforcement, potential access-to-justice concerns, and the need for balance in maintaining trust account records. Read More
