1700 California Lawyers Administratively Suspended for Trust Account Issues
If you think complying with your Client Trust Account obligations in North Carolina is stressful, be thankful you’re not in California.
More than 1,700 attorneys in the Golden State have been administratively suspended for failing to comply with that state’s new trust account rules. The rules were adopted by the State Bar of California after a lawyer was accused of misappropriating millions in client funds over four decades. A whopping 205 disciplinary matters were opened against him before he was ultimately disbarred.
From the ABA Journal:
“About 2,000 California lawyers were initially placed on involuntary inactive status for failing to comply, but the number out of compliance had dropped to more than 1,700 as of July 25…. The State Bar of California adopted the Client Trust Account Protection Program after attorney Tom Girardi was accused of stealing more than $18 million from clients. The new program requires lawyers to report whether they are responsible for client trust accounts, to provide basic account information, to complete an annual self-assessment, and to certify that they comply with ethics rules related to safeguarding client funds, according to a October 2022 press release. The new rules are intended to help the state bar prevent attorney theft.”
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NC Rule of Professional Conduct 1.15
Safekeeping Client Property
This rule has four subparts: Rule 1.15-1, Definitions; Rule 1.15-2, General Rules; Rule 1.15-3, Records and Accountings; and Rule 1.15-4, Trust Account Management in Multiple-Lawyer Firm. The subparts set forth the requirements for preserving client property, including the requirements for preserving client property in a lawyer’s trust account. The comment for all four subparts as well as the annotations appear after the text for Rule 1.15-4.
Safekeeping Property | North Carolina State Bar (ncbar.gov)
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