If a law firm finds an overbalance in its trust account that may be unwithdrawn earned fees, can it simply take the money, and who pays to prove the fees were earned?

Plain-English summary

The inquiry concerned disposition of funds in a trust account that the firm believed might be the result of a failure to withdraw earned fees. The committee was of the opinion that before the firm could take those funds as earned fees, the burden is on the firm to demonstrate its right to claim ownership of them as earned fees.

The committee was further of the opinion that any costs of auditing or accounting to establish that ownership right could not be charged against the funds held in the trust account, but must be borne by the firm directly.

Currency note

This opinion was issued in 1989, before the Washington State Bar Association's adoption of the 2006 revisions to the Washington Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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 firm just sweep a trust-account overbalance it thinks is unwithdrawn fees?

A: Under this 1989 opinion, no, not without first carrying its burden. The committee was of the opinion that the firm must demonstrate its right to claim ownership of the funds as earned fees before taking them.

Q: Who pays for the accounting needed to prove the fees were earned?

A: The firm. The committee was of the opinion that auditing or accounting costs to establish the ownership right cannot be charged against the trust funds and must be borne by the firm directly.

Background and rules framework

At the time of this opinion, Washington's RPC 1.14 governed the safekeeping of client property, the subject the current Model Rules place in Rule 1.15. The committee applied it to a trust-account overbalance: funds in trust are presumptively protected, so the firm carries the burden of proving any claim to them as earned fees and absorbs the cost of doing so rather than charging it to the trust.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property)
• Washington RPC 1.14 (as numbered at the time of the opinion)

See also

• WA Ethics Op. 1298: Undisclosed Trust Account in Bankruptcy
• WA Ethics Op. 1284: Returning a Former Client's Documents

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=400

Original opinion text

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

The Committee reviewed your inquiry concerning disposition of funds in your trust account which you believe may be the result of failure to withdraw earned fees. The Committee was of the opinion that before your law firm could take those funds as earned fees, the burden is on your firm to demonstrate your right to claim ownership of them as earned fees. The Committee was further of the opinion that any costs of auditing or accounting to establish that ownership right could not be charged against those funds which are held in your trust account but must be borne by you directly.