The rules of professional conduct mandate and the lawyer disciplinary systems enforce the standard of safekeeping of client property as a fundamental fiduciary obligation of lawyers. The dishonor of drafts for insufficient funds drawn from client trust accounts is an "early warning" that a lawyer is engaging in conduct likely to injure clients. An overdraft notification program has the potential to reduce significantly the level of lawyer defalcations across the country. By requiring financial institutions which maintain lawyer trust accounts to notify the highest court or lawyer disciplinary agency of overdrafts the appropriate disciplinary authorities are able to intervene before major losses occur and significant numbers of clients are harmed. The rule also enables authorities to counsel errant lawyers to take corrective action before the lawyer's misconduct becomes so egregious as to mandate serious sanction. Participation by financial institutions is a prerequisite to their continued eligibility to hold lawyer trust accounts. The costs of providing notification can be assessed against the lawyer who caused the overdraft. An effective overdraft notification program should conserve substantial resources for both clients and lawyers' funds for client protection.
Next - Rule 1 CLEARLY IDENTIFIED TRUST ACCOUNTS REQUIRED