Hello and welcome to this JACPA Ethics Alert blog which will update my 4/19/12 Ethics Alert discussing the recent Florida Bar Board of Governors’ approval of revisions to trust account rules which, inter alia, requiring written plans listing responsible lawyers. The proposed rules and a sample plan are here: 2012 BOG trust account revisions.
As I indicated in a previous blog, the proposed rules were approved by the Board of Governors at its meeting on March 23, 2012 and would require multiple member law firms to have a written trust accounting plan which includes the names of the lawyer(s) who are responsible for reconciliation of the law firm’s trust accounts and answering any questions about the trust account. The written plan would not be required to be filed with The Florida Bar.
Importantly, the proposed rules also state that “any lawyer who has actual knowledge that the firm’s trust account(s) or trust accounting procedures are not in compliance with chapter 5 may report the noncompliance to the managing partner or shareholder of the lawyer’s firm. If the noncompliance is not corrected within a reasonable time, the lawyer must report the noncompliance to staff counsel for the bar if required to do so pursuant to the reporting requirements of chapter 4.” (emphasis supplied).
The proposed rules are scheduled to be submitted to the Supreme Court of Florida this fall as part of the Bar’s Biannual amendment petition regarding the Rules Regulating The Florida Bar. The sample written plan forms would be included as part of the revised trust accounting rules.
Proposed Rule 5-1.2(c) Responsibility of Lawyers for Firm Trust Accounts and Reporting (which would be an entirely new subsection) states in full as follows:
(1) Every law firm with more than 1 lawyer must have a written plan in place for supervision and compliance with this rule for each of the firm’s trust account(s), which plan must be disseminated to each lawyer in the firm. The written plan must include the name(s) of the lawyer(s) who sign trust account checks for the law firm, the name(s) of the lawyer(s) who are responsible for reconciliation of the law firm’s trust account(s) monthly and annually and the name(s) of the lawyer(s) who are responsible for answering any questions that lawyers in the firm may have about the firm’s trust account(s). This written plan must be updated and re-issued to each lawyer in the firm whenever there are material changes to the plan, such as a change in the lawyer(s) signing trust account checks and/or reconciliation of the firm’s trust account(s). **
(2) Every lawyer is responsible for that lawyer’s own actions regarding trust account funds subject to the requirements of chapter 4 of these rules. Any lawyer who has actual knowledge that the firm’s trust account(s) or trust accounting procedures are not in compliance with chapter 5 may report the noncompliance to the managing partner or shareholder of the lawyer’s firm. If the noncompliance is not corrected within a reasonable time, the lawyer must report the noncompliance to staff counsel for the bar if required to do so pursuant to the reporting requirements of chapter 4.
Bottom line: As I said in my previous Ethics Alert, if approved by the Florida Supreme Court, these proposed trust account rules will be a very substantive change in the trust account rules and will add another layer of responsibility and regulation to the Bar Rules. As I also indicated in my 4/18/12 Ethics Alert, in its April 12, 2012 opinion, the Florida Supreme Court declined to implement proposed Rule 5-1.2(d) (Signing Trust Account Checks), which would have required that a lawyer sign every trust account check with his or her actual signature and would have prohibited lawyers from using a signature stamp or signing a trust account check in blank. The Court returned the issue to the Bar for more study on the proposed rule’s impact on sole and small firm practitioners.
Be careful out there!
As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.
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