Can a lawyer let a paralegal use the lawyer's signature stamp to sign checks drawn on the client escrow account?

Plain-English summary

The committee was asked whether a lawyer may let a paralegal use a stamp bearing the lawyer's signature to execute checks drawn on a client escrow account, a practice used to speed real estate closings. It started from the principle that the Code contemplates delegation of tasks to nonlawyers (DR 1-104; EC 3-6), and that it had already approved delegating attendance at a ministerial real estate closing to a paralegal where the lawyer remains reachable and several conditions are met (N.Y. State 677 (1995)). Delegated tasks must stay within the limits of law and be limited to functions not involving independent discretion or judgment.

The committee then addressed the escrow-account constraint. Under DR 9-102(E), only a lawyer admitted in New York may be an authorized signatory on a special account; a nonlawyer may not be a signatory and a lawyer may not grant a nonlawyer signatory power. It cited disciplinary cases (In re Gambino and In re Stenstrom) where lawyers were sanctioned for making a nonlawyer relative a signatory. But the committee distinguished being a signatory from the mechanical act of applying the lawyer's signature to a check. The rule did not address whether a lawyer could delegate the act of signing, including by signature stamp.

Applying its delegation analysis, the committee concluded it is permissible, with proper controls. The lawyer must decide in advance how the paralegal will use the stamp, including approving the purpose of the payments, the nature of each payee, and the authorized dollar range for each check, and must review afterward what actually happened. As a practical matter, that limits stamp use to closings the lawyer can reliably forecast. Responsibility for client funds may not be delegated: the lawyer remains "completely responsible" for any errors or misuse and must take steps to safeguard the stamp against misappropriation.

Currency note

This opinion was issued in 1997, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a paralegal be a signatory on the lawyer's escrow account?

A: The opinion concluded no. Under DR 9-102(E), only a New York-admitted lawyer may be an authorized signatory on a special account, and a lawyer may not give a nonlawyer signatory power.

Q: Then how can a paralegal sign escrow checks at all?

A: The opinion distinguished being a signatory from mechanically applying the lawyer's signature. A lawyer may delegate the act of signing, including by signature stamp, if the lawyer pre-approves the payments and supervises closely.

Q: What controls did the opinion require?

A: The opinion required the lawyer to approve in advance the purpose, payee, and dollar range of each check, to review afterward, and to safeguard the stamp, remaining completely responsible for any misuse.

Background and rules framework

The opinion interpreted DR 1-104 (delegation to and responsibility for nonlawyers), EC 3-6, and DR 9-102(A), (B), and (E) (handling and signatory rules for client funds in special accounts) of New York's former Code. The Model Rule analogues are Rule 5.3 (responsibilities regarding nonlawyer assistance) and Rule 1.15 (safekeeping property). New York replaced the Code with the Rules of Professional Conduct in 2009; the DR numbers cited here are historical.

Citations and references

Rules of Professional Conduct:

• MR 5.3 (responsibilities regarding nonlawyer assistance)
• MR 1.15 (safekeeping property; trust accounts)
• NY DR 1-104; DR 9-102(A), (B), (E); EC 3-6

Cases:

• In re Gambino, 205 A.D.2d 212 (2d Dep't 1994), nonlawyer signatory on a special account
• In re Stenstrom, 194 A.D.2d 277 (4th Dep't 1993), nonlawyer signatory on a special account

Other opinions cited:

• N.Y. State 677 (1995): delegating attendance at a ministerial real estate closing to a paralegal
• ABA Formal Op. 316 (1967): limits on delegating tasks to nonlawyers

See also

• NY State Bar Op. 737: Escrow account duties
• NY State Bar Op. 710: Escrow agent releasing funds to a client
• NY State Bar Op. 695: Listing a paralegal as a Certified Legal Assistant

Source

• Landing page: https://nysba.org/opinion-693/