the LegaL anD ethiCaL MinefieLD of trust aCCounting
Solo & Small Firm Section
Chairs: Amanda Uliano - Law Office of Amanda Uliano, P.A. & Matthew Crist - Crist Legal, P.A.
I
t is one of the most important
aspects of the business side of
law practice — and also the
area that can get lawyers into
the most trouble: Trust Accounts.
On November 14, 2017, the Solo
& Small Firm Section welcomed
Don Smith of the law firm of
Smith, Tozian, Daniel & Davis,
P.A. to present a CLE on “Trust
Accounting — Establishing,
Managing and Maintaining a
Compliant Trust Account.”
In reviewing Rules 5-1 and 5-2
of the Rules Regulating the Florida
Bar, Smith explained the basic
requirements for maintaining a
compliant trust account. First, a
lawyer’s trust account records must
include a journal of receipts and
disbursements — or, simply, the
list of the money coming in and
the money going out. Second, a
separate client ledger should be
maintained for each client showing
the monetary transactions specific
to that client. Third, all back-up
documentation should be retained,
including bank statements, deposit
slips that detail the client/matter
information for each deposit,
canceled checks (if your bank
doesn’t provide them, find a bank
that will), credit card receipts, and
similar documents. Fourth, the
trust account should be reconciled
every month. This includes not only
comparing the bank statements to
the journal but also comparing the
66
Solo/Small Firm Section Co-Chairs Matthew Crist and Amanda Uliano
with Don Smith, who presented a CLE to the section on trust accounting.
An accused lawyer
journal to the
is
not
permitted to
individual client
the quickest and
respond to the petition
ledgers. Fifth,
harshest way to
until after the Supreme
all trust account
Court has entered its
records, including
be disciplined by
order instituting the
back-up
the florida bar
emergency suspension.
documentation,
Upon suspension, all
must be
is through trust
bank accounts of the
maintained for
account violations.
lawyer and the lawyer’s
a minimum of
firm are frozen —
six years from
operating as well as trust
the date of the
accounts. The suspended lawyer must
last transaction for each client.
provide notice of his suspension to all
According to Smith, the quickest
clients, courts, and banks. Further,
and harshest way to be disciplined
the lawyer cannot take on any
by The Florida Bar is through trust
new clients and must immediately
account violations. As trust accounts
suspend representing any current
by their nature involve someone
clients. If a client wishes to obtain
else’s property, the penalties for
funds being held in a frozen trust
violations can be most severe. For
account, the client must file a
instance, Rule 3-5.2 of the Rules
petition with the court-appointed
Regulating the Florida Bar, which
referee and provided sufficient
provides for emergency suspension
documentation of entitlement.
of attorneys, has commonly been
Any request for disbursement can
invoked in situations involving trust
take months to be authorized.
account violations. The emergency
The area of trust accounting
suspension procedure is an ex parte
can certainly be a legal and ethical
proceeding instituted by the filing
minefield for lawyers, but with the
of a petition and supporting
right policies and procedures in
affidavits by The Florida Bar
place, lawyers and firms can be
demonstrating facts that, “if
assured to make it through safely.
unrebutted, would establish clearly
and convincingly that a lawyer
Author: Amanda M. Uliano - Law
appears to be causing great public
Office of Amanda M. Uliano, P.A.
harm.” Rule 3-5.2(a)(1).
JAN - FEB 2018
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HCBA LAWYER