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March 08, 2021

William D. Ricker Comments to Proposed Rule 1.15 - Center for Professional Responsibility

Direct: (954) 468-2452
Email: [email protected]


Susan Campbell
ABA Center for Professional Responsibility
14th Floor
541 N. Fairbanks
Chicago, IL 60611

Re: Comments to Proposed Rule 1.15

Dear Ms. Campbell:

The National Client Protection Organization would like to make several comments to the Ethics 2000 proposed changes to Rule 1.15. The NCPO is a public service organization started three years ago by professionals, trustees and other person actively involved in client protection. We are work closely with the Center and the ABA Standing Committee on Client Protection to support the continuance of strong client protection funds and programs where they exist and to ensure there is assistance and support for jurisdictions which need assistance in developing strong funds. We are concerned that there are portions of the proposed Rule 1.15 and its comments which do not adequately set forth the strong position the ABA has traditionally supported in the area of protection of client funds.

We are concerned that the proposed new section (b) to Rule 1.15 does not adequately state the very limited purpose for which the section was created. We would urge the entire section be removed from the proposed rule as we do not believe there is justification for ever commingling client funds with personal funds. As stated, section (b) falls far short of expressing the reason it is being proposed. As written, a every commingling of funds would act to "minimize" bank charges. If the purpose of the section is to permit a lawyer to place an amount of personal funds into a trust account which will cover bank charges the section should clearly state that.

Bank charges are a cost of doing business for lawyers and they should be treated as such. If the charges can be passed on to clients as a cost of maintaining client funds they should be. To allow lawyers to use trust accounts as personal accounts for the purpose "minimizing" bank charges, however, is not appropriate. This section is contradictory to the rules which require the separation of personal and client funds. The comment to section (b) implies that the amount necessary to pay bank charges can be deposited, but the rule approves a deposit of any amount so long as the deposit "minimizes" bank charges. The rule is much too broadly worded. It should be eliminated in its entirety but at a minimum should be far more limited in its scope.

Our second concern involves the addition to Comment 6 to Rule 1.15 dealing with client protection funds where the comment states that a lawyer "must participate where it is mandatory, and even when it is voluntary, the lawyer" should participate. There should be no "voluntary" client protection funds and the Model Rules should not even open the door to that possibility. Currently every state and the District of Columbia have jurisdiction wide client protection funds. In 1999, the Conference of Chief Justice adopted its National Action Plan on Lawyer Conduct and Professionalism. Section II D.4. of the Plan calls on every jurisdiction’s lawyer regulatory system to include a lawyers’ fund for client protection. Section II D. 4 specifically calls for a jurisdiction wide fund with a mandatory assessment.

It is inconsistent for the ABA Model Rules of Professional Conduct to be less demanding than the Chief Justices National Action Plan. As proposed Comment 6 also contradicts the ABA’s Model Rules for Lawyers’ Funds for Client Protection first adopted by the House of Delegates in 1981 and revised since then. Rule 1 B of the Model Rule does not speak of a voluntary participation in a client protection fund; it states that

Every lawyer has an obligation to the public to participate in the collective efforts of the bar to reimburse persons who have lost money or property as a result of the dishonest conduct of another lawyer. Contribution to the Lawyers’ Fund for Client Protection is an acceptable method of meeting this obligation.

Emphasis supplied. Coupled with the call by the Conference of Chief Justices, client protection funds are no longer voluntary. History has shown that voluntary funds will not pass the test of time and will not meet the professional obligation of reimbursing clients.

A suggested revised Comment 6 is:

Participation in the jurisdiction’s lawyers’ fund for client protection, which through collective efforts of the bar reimburses persons who have lost money or property as a result of dishonest conduct of a lawyer, is a mandatory obligation of a lawyer.

In addition, the NCPO believes that Rule 1.15 should include a section which specifically sets out a lawyers professional obligation to support the lawyer’s client protection fund. Comment 6, even as revised, is not forthright enough in establishing the obligation. The first sentence of Rule 1 B of the Model Rules for Lawyers Funds for Client Protection could be used.

Finally, NCPO believes Rule 1.15 should include a section which set out the majority rule that a lawyer must deposit all unearned fee revenue into a client trust account until earned. A suggested sections is:

A lawyer shall deposit all fees not yet earned into a trust account and shall not disburse said fees until earned and until the lawyer complies with appropriate provisions of Rule 1.5.

The single largest class of claims made to client protection funds is for the taking of unearned fees. Lawyers must realize that an advanced, unearned fee is not the lawyers and therefore belongs to the client until earned. If it is property of the client, it belongs in a trust account. A number of recent appellate decisions have examined the problems of unearned advanced fees and retainers. See, In Re Sather ___ P.2d ___ (Colo. 2000), Iowa Supreme Court Bd of Ethics v. Apland, 577 N.W.2d 50 (Iowa 1998) and In re Disciplinary Action Against Lochow, 469 N.W.2d 91 (Minn. 1991).

Very truly yours,


William D. Ricker, Jr.