PBCBA BAR BULLETINS pbcba_bulletin_April 2019 | Page 26
PROFESSIONALISM C o r n e r
Trust-Account Delights & Cautionary Tales
D. CULVER “SKIP” SMITH III
We all have heard of and read about lawyer
theft of trust funds. The motivation for
such pilfering ranges from maintaining
an excessively flamboyant lifestyle, to
satisfying gambling debts, to meeting basic
living needs in hard times (often brought
about by the lawyer’s failure to grasp
reality). Some are intended to be merely
“temporary” use of the funds, to be replaced
as soon as an expected fee is received (but
often not received). Some misuse of trust
funds simply is inexplicable. All such
conduct is driven by delusional thinking of
one kind or another. Never is it justified.
To brighten your day, Dear Reader, herewith
a smattering of trust-account delights
from around the country, followed by some
cautionary tales.
The Case of the Chatty Lawyer:
Lawyer
attends Ethics CLE seminar. It is a large
event, and the sign-in tables are manned
by bar disciplinary lawyers as well as by
administrative staff. Chatty Lawyer, being
a gregarious sort, chats up a couple of bar
prosecutors while signing in to ensure
receipt of his ethics credits and presents
a check for the course fee—drawn on his
trust account. One presumes that his ethics
credits became moot.
The Case of the Generous Family Friend:
Lawyer is a friend of the family of the
bride-to-be. To demonstrate his affection
for the family, he sends the bride a gift—
you guessed it, a check drawn on his trust
account. His generosity knows no bounds—
at least not ethical. One wonders whom he
told the bride to thank.
The Case of the Online Don Juan: Lawyer
actively participates in online dating—and
pays for the service with funds from his
IOLTA account. One supposes that any
relationship that ensued was short-lived—
or evolved into that glamorous foundation
for affaires du coeur known as aiding and
abetting.
The Case of the Rapacious Day Trader: You
already know what’s coming, don’t you?
Yes, Lawyer uses his trust account for his receiving overdraft notices. Needless to say,
day-trading.
this took quite a while to undo.
Now he probably is day-trading full time.
The lessons from the foregoing are obvious.
The Case of Desperate Addict: Lawyer, A couple more:
addicted to Oxycontin, pays his dealer with
trust-account checks. Needless to say, he 1. Distinguish trust-account checks from
no longer is licensed. This, of course, is as operating-account checks by color, style, or
sad as it is humorous.
background scheme.
There also are the cautionary tales:
The Case of the Stopped Check: P.I. Lawyer
settles case, but the settlement check does
not arrive. Lawyer contacts the insurance
company, which stops payment on the
check and issues a new check. A few days
later a check arrives, Lawyer deposits it into
the trust account, and after an appropriate
passage of time disburses the settlement
funds. Then the reissued check arrives. In
the interim? Overdrafts. This mistake did
not result in a severe disciplinary sanction,
but it is a lesson in paying attention.
2. Don’t hire your brother-in-law to manage
your trust account. Okay, that may seem a
bit of an overgeneralization, but you might
be surprised by the number of wayward
brother-in-law cases are out there. The
point, of course, is to know well the person to
whom you are entrusting the responsibility
and regularly and carefully review what
that person is doing. “I had every reason to
trust him/her implicitly” goes only so far in
a disciplinary case.
Remember, nothing is more designed to
bring the house crashing down than a trust-
The Case of the Bank Switch: Lawyer moves account misstep.
Lawyer’s bank accounts, including the trust
account, from Bank A to Bank B. Thereafter, D. Culver “Skip” Smith III focuses his
without realizing it, Lawyer writes a practice on the ethical and professional
month’s worth of checks on the trust responsibilities of lawyers. He maintains
account at Bank A, which contains only a an office in West Palm Beach and can be
nominal amount of funds to cover bank fees. reached at 561-598-6800 or at .
intact in the Bank B trust account, so no
problem there. Lawyer promptly reissues
checks from the proper account and covers
SAVE THE DATE
the overdraft fees charged by Bank A. No
discipline followed from this inadvertence,
Palm Beach County Bar Association
but Lawyer was subjected to a considerable
presents
amount of auditing and aggravation by the
bar. Note that this tale recites that Lawyer
97th Annual
issued the Bank A checks “without realizing
Installation
Banquet
it,” but one wonders whether he even looked
at the checks when signing them.
The Case of the Misprinted Checks:
Lawyer’s bank prints an entire run of trust-
account checks with the wrong account
number. Most of us would check to ensure
that the firm’s name and address are printed
correctly, then move on, right? The account
number was that of an existing account
belonging to a private individual, who began
Saturday, June 1st, 2019
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Breakers Hotel
1 S County Rd.
West Palm Beach, FL