It’s Not Your Money: Tips for Ethical Handling of Client Trust Accounts
Tip from Hinshaw & Culbertson
Lawyers don’t go to law school to learn principles of accounting and banking. However, once armed with a law license, lawyers - - especially solo practitioners and those that run small firms - - need to understand that their ethical and fiduciary duties to clients extend to proper handling of client trust accounts (CTAs). Indeed, mishandling of client trust funds is one of the primary targets of state bar regulators because violations can be relatively easy to detect through an audit and there is little subjectivity involved like other rule violations, such as the failure to communicate, lack of diligence or competence. Harm to the client is not a prerequisite to discipline, and discipline has been imposed even for mishandling nominal sums.