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Ethics By handling cases in a thorough manner, staying on top of

all cases, keeping clients informed and responding promptly to client inquiries, lawyers should be able to avoid grievances that implicate competence, diligence and communication concerns about the representation. When lawyers receive the monetary proceeds of a case, an additional set of ethical imperatives requires the lawyer’s attention and compliance.

Safekeeping Property and Trust Account Record-Keeping Requirements

Upon settlement of a personal injury claim or payment of a judgment obtained in court, the imperatives of Rule 1.15 of the Rules of Professional Conduct, as well as Title 16, Chapter 600 of the Maryland Rules, govern the lawyer’s handling of the monetary proceeds of a case. Typically, such proceeds will be received in the form of a check payable jointly to the client and to the attorney. Absent the client’s specific written authorization to endorse the settlement check for deposit to the lawyer’s trust account, the client’s personal endorsement is required. Rule 1.15(d) requires that a lawyer shall promptly notify a client or third person when the lawyer receives funds in which the client or third person has an interest. As a prerequisite to receiving and accepting funds “from

any source intended in whole or in part for the benefit of a client or third person,” Maryland Rule 16-603 requires that an attorney maintain one or more attorney trust accounts for the deposit of such funds. Consistent with Rule 1.15(a)’s directive to hold funds in “a separate account maintained pursuant to Title 16, Chapter 600,” Rule 16-604 requires that funds “to be delivered in whole or in part to a client or third person, …, shall be deposited in an attorney trust account in an approved financial institution.” As set forth in Rule 16-606, attorney trust accounts maintained in accordance with Title 16, Chapter 600 must have one of the following three permissible designations on all checks and deposit slips:

1. Attorney Trust Account; 2. Attorney Escrow Account; or 3. Clients’ Funds Account

Te designation of a trust account as an “IOLTA” account

on checks is a mistake regularly seen when Bar Counsel reviews bank records as part of an investigation.

Although such

trust accounts commonly are IOLTA accounts, the IOLTA designation alone does not comply with Rule 16-606. Generally speaking, attorneys can have the erroneous designation easily corrected and will not face disciplinary consequences if they do so, although a Rule 16-606 violation may be included in a case charging the lawyer with other more serious misconduct.

In addition to requiring prompt notification to clients or

third persons with an interest in the received proceeds of a case, Rule 1.15(d) requires that “a lawyer shall deliver promptly to the client or third person any funds” the client or third person is entitled to receive and, “upon request by the client or third person, shall render promptly a full accounting regarding such property.”

In Attorney Grievance Commission v. Roberts, 394

Md. 137 (2006), the Court of Appeals disbarred a lawyer who violated almost every requirement of Rule 1.15(a) and what is now Rule 1.15(d). (Prior to July 1, 2005, the pertinent provisions of current Rule 1.15(d) were set forth in Rule 1.15(b).) In Roberts, the respondent attorney received a client’s settlement check for $7,500.00 and deposited that sum into his trust account following a meeting with the client, who had endorsed the check. Te respondent gave the client a written settlement statement that provided a breakdown showing the respondent would receive a one-third contingent fee of $2,500, plus an $18 expense reimbursement; two medical providers would receive a combined total of $4,178; and the client would receive a net disbursement of $804. Te day after depositing the settlement check in his trust account, the respondent transferred the entire $7,500 to his operating account. Tereafter, for a period of several months, no funds were disbursed to the client or to any


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(301) 977-8002 Trial Reporter / Winter 2012 17

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