Can a Limited Practice Officer (LPO) sign checks drawn on a law firm's trust account, given that RPC 1.15A(h)(9) says only a lawyer may be an authorized signatory?

Plain-English summary

The inquiry asked whether a Limited Practice Officer (LPO) may sign a check drawn on a trust account, given RPC 1.15A(h)(9)'s statement that only a lawyer admitted to practice law may be an authorized signatory on the account. The opinion answers yes, under limited circumstances.

To reconcile that answer with the rule's text, the opinion looks at the history of Admission to Practice Rule (APR) 12(h) and APR 12.1, adopted in 1995, which govern how LPOs treat funds received in real property closings and preserve the identity of those funds. It recounts that when the Supreme Court considered those rules, it considered the IOLTA requirement for LPOs and recognized that escrow officers and title officers are separately licensed and authorized to handle funds. It quotes a November 8, 1994 letter from the Chief Justice asking the Bar to clarify that the rule applies only to funds held in escrow related to transactions in which the certified closing officer engaged in the practice of law.

Given that history, the opinion reasons it is reasonable to interpret RPC 1.15A(h)(9) as including LPOs, who have a limited authorization to practice law. It limits that conclusion: an LPO may sign checks on a lawyer's trust account only for transactions for which the LPO is licensed, and the authority does not go beyond that. Because the inquirer runs a risk if an LPO signs trust-account checks, the opinion states it may be prudent to establish two separate trust accounts, one specific to the transactions in which the LPO is involved.

In practice

Under this opinion, and under the Washington rules as they stood at the time, a Limited Practice Officer may serve as a signatory on a law firm's trust-account checks, but only for the limited real estate closing transactions the LPO is licensed to handle, and not beyond. The opinion reads RPC 1.15A(h)(9)'s "only a lawyer" language to include LPOs because of their limited authorization to practice law, and it identifies maintaining a separate trust account for LPO transactions as a step the opinion describes as potentially prudent given the risk.

Common questions

Q: Can an LPO sign trust-account checks even though RPC 1.15A(h)(9) says only a lawyer may be an authorized signatory?

A: The opinion concludes yes, under limited circumstances. It reads the rule to include LPOs because an LPO has a limited authorization to practice law.

Q: What transactions can an LPO sign trust-account checks for?

A: The opinion limits LPO signing authority to the transactions for which the LPO is licensed; the authority does not extend beyond that.

Q: Should a firm keep LPO transactions in a separate account?

A: The opinion states that, because the inquirer runs a risk if an LPO signs checks on the trust account, it may be prudent to establish two trust accounts, one specific to transactions in which the LPO is involved.

Background and rules framework

The opinion interprets Washington RPC 1.15A(h)(9) (the safekeeping-of-property rule; counterpart to Model Rule 1.15), which provides that only a lawyer admitted to practice law may be an authorized signatory on a trust account. It reads that provision against Admission to Practice Rule (APR) 12(h) and APR 12.1, which govern Limited Practice Officers' handling of funds in real property closings, and against the rulemaking history of those APR provisions, to conclude that an LPO's limited authorization to practice law brings the LPO within the rule for the transactions the LPO is licensed to handle.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.15 / Washington RPC 1.15A(h)(9) (trust-account signatory; safekeeping of property)

Other authorities:

• Washington Admission to Practice Rule (APR) 12(h) and APR 12.1 (Limited Practice Officers' handling of closing funds)
• Statement of purpose, advance sheet 7 of 125 Wash. 2d (Proposed 69-75), quoting a November 8, 1994 letter from the Chief Justice

See also

• WA Ethics Op. 2151: Limited Practice Officers as Trust-Account Escrow Signatories
• WA Ethics Op. 2143: Facsimile Signature Stamp on Trust-Account Checks

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1598

Original opinion text

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

Advisory Opinion: 2156
Year Issued: 2007
RPC(s): RPC 1.15A(h)(9), APR 12(h) & 12.1
Subject: whether a Licensed Practice Officer (LPO) may be an authorized signatory on trust accounts under RPC 1.15A(h)(9)

1. Question: May a Limited Practice Officer (“LPO”) sign a check drawn on a trust account given the language of RPC 1.15A(h)(9)?

Answer: Yes. Under limited circumstances, an LPO may sign trust account checks.

2. Question: How does the answer to the question in 1.1 relate to the rule’s statement that “only a lawyer admitted to practice law may be an authorized signatory on the account?”

Answer: When the state Supreme Court considered the adoption in 1995 of Admission to Practice Rule (APR) 12(h) and APR 12.1 stating how LPOs are to treat funds received related to closing real property transactions and preserving the identity of funds in transactions by LPOs, they considered putting the IOLTA requirement on LPOs. They explicitly considered that escrow officers are licensed by the Department of Financial Institutions and title officers are licensed by the Insurance Commissioners and both officers are authorized to handle funds. The statement of purpose set forth in advance sheet 7 of 125 Washington 2d, Proposed 69-75, quotes a November 8, 1994 letter from the Chief Justice asking the Bar Association to modify the proposed rule “to clarify that it is applied only to those funds held in escrow that are related to transactions in which the certified closing officer engaged in the practice of law.”

Given this history, it is reasonable for RPC 1.15A(h)(9) to be interpreted as including LPOs, as they have a limited authorization to practice law. However, while an LPO may be a signatory on checks drawn on a lawyer’s trust account, the LPO may only sign checks related to a transaction for which they are licensed. Their authority does not go beyond that. Because the inquirer does run a risk if an LPO signs checks on the trust account, it may be prudent to establish two different trust accounts, with one specific to transactions in which the LPO is involved.