Can I keep some of my own money in my client trust account to maintain a minimum balance and avoid bank service charges?

Plain-English summary

An attorney asked whether a lawyer may maintain a certain amount of his or her own money in a client trust account to establish a minimum balance so that bank service charges can be avoided.

The opinion resolves the inquiry under Rule 1.15 ("Safekeeping Property"). Rule 1.15(a) embodies the general anti-commingling principle of the predecessor Model Code, requiring a lawyer to hold client and third-person property separate from the lawyer's own and to keep client funds in a separate account. The opinion observes that, unlike DR 9-102(a)(1) of the Model Code, Rule 1.15(a) contains no express exception permitting the deposit of the lawyer's funds to pay bank service charges, and that the Comment to Rule 1.15 directs that clients' funds be kept in trust accounts separate from the lawyer's personal or business funds.

Notwithstanding the absence of an express exception, the Panel believes the anti-commingling principle can be complied with under stated conditions. It concludes a lawyer may maintain his or her own monies in a client trust account in an amount sufficient to avoid bank service charges, provided that (1) the amount of the lawyer's funds does not exceed the amount necessary to avoid the charges, and (2) the deposited funds are not used by the lawyer for any other purpose.

In practice

Under this opinion, keeping a lawyer's own money in a client trust account -- ordinarily a commingling concern under Rule 1.15(a) -- is permitted for the limited purpose of maintaining a minimum balance to avoid bank service charges. The opinion ties the permission to two conditions it identifies: the deposit may not exceed what is necessary to avoid the charges, and it may not be used for any other purpose.

Common questions

Q: Does Rule 1.15 have an express exception for covering bank service charges?

A: No. The opinion notes that Rule 1.15(a) contains no exception like the former DR 9-102(a)(1) permitting a deposit of the lawyer's funds to pay bank service charges.

Q: So can a lawyer keep personal funds in the trust account at all?

A: Yes, within limits. The opinion concludes a lawyer may keep his or her own funds in the account in an amount sufficient to avoid bank service charges.

Q: What conditions does the opinion attach?

A: Two: the lawyer's funds may not exceed the amount necessary to avoid the charges, and the deposited funds may not be used for any other purpose.

Background and rules framework

The opinion interprets Rhode Island Rule of Professional Conduct 1.15(a) (safekeeping property), the analog of Model Rule 1.15. Rule 1.15(a) states the general anti-commingling principle, requiring client and third-person property to be held separate from the lawyer's own property and client funds to be kept in a separate account with records preserved for seven years after the representation. The opinion contrasts this with the Model Code's DR 9-102(a)(1), which expressly allowed a deposit of the lawyer's funds to pay bank service charges.

Citations and references

Rules of Professional Conduct:

• MR 1.15 / RI RPC 1.15(a) (safekeeping property; anti-commingling)

Other authorities cited:

• Model Code of Professional Responsibility DR 9-102(a)(1) (bank-service-charge exception, noted as absent from Rule 1.15)

See also

• RI EAP Opinion 93-55: reporting an escrow lawyer's Rule 1.15(b) delay under 8.3

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2093-57.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

(FINAL)
ETHICS ADVISORY PANEL
OPINION #93-57, REQUEST #383
Issued July 28, 1993

An attorney inquires as to whether it is permissible for a lawyer to maintain a certain amount of his/her own monies in a client trust account to establish a minimum balance so that bank service charges can be avoided.

Rule 1.15 entitled "Safekeeping Property" addresses this inquiry. Paragraph (a) states that:

A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account maintained in the state where the lawyer's office is situated or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of seven (7) years after termination of the representation as provided under Rule 1.16.

Rule 1.15(a) embodies the general anticommingling principle of the predecessor Model Code. There is however no exception under Rule 1.15(a) permitting the deposit of funds to pay bank service charges as was provided under the Model Code in DR 9-102(a)(1). Pursuant to the Comment to Rule 1.15, clients' funds shall be kept in one or more trust accounts, separate from the lawyer's own personal or business funds.

The Panel believes that the anticommingling principle of Rule 1.15(a) can be complied with under the following conditions. A lawyer may maintain his/her own monies in a client trust account in an amount sufficient to avoid bank service charges provided, however, that the amount of the lawyer's funds may not exceed that amount which is necessary to avoid bank service charges and further provided that the funds so deposited are not used by the lawyer for any other purpose.