Safeguarding Client Property Self-Quiz
You talk to
your client about what you think his case might cost, apart from your
fee. The client advances you a few thousand dollars to cover some costs.
You tell the client the money will go to a third person in connection
with the case. Do you deposit these advances in your client trust account?
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Say you represent
three contractors in various business ventures. Money is forwarded all
the time by them, given the volume of business they do. To facilitate
matters you place all the checks they give you in one trust account, separate
from your personal funds. A lot of these checks are for advances on fees,
as well as funds with which you are empowered to negotiate in settlements.
Could you be disciplined for commingling funds?
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You went to
law school, not business school. You don’t know the first thing
about accounting for a client trust account. But you’re smart enough
to work out a way to protect yourself by keeping a couple of extra thousand
dollars of your funds in the trust account, just in case, by accident,
you bounce a trust account check. Have you violated the ethical rules?
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You negotiated
for a nice settlement for your client, the plaintiff in an invasion of
privacy case. According to the terms of the settlement, you will receive
two checks on behalf of your client, one in each of the next two months.
You of course deposit the checks in your client trust account. At the
end of the second month you write out a check from the trust account,
paying to the order of your client. You deduct your fee from the check,
just to make sure you get what you’re due. You assume your client
would want to do business with you this way, as do most of the clients.
Any ethical problems with this arrangement?
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You represented
Van Illa in a suit against the bean grower’s association. Van thought
that you told him your fees in the suit were $40 an hour, but really they
were $400 (you’re straight out of a big-city firm). You know this
was made clear from the outset of the representation, and in fact, you
had Van sign an acceptance of this fee. Unfortunately, your secretary
filed the fee agreement somewhere in the depths of your filing cabinet,
and you’re having trouble finding it. While the dispute continues,
where do you keep the funds in question?
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Say the fiancée
of an old client of yours calls and says her man, your old client, is
stuck in jail on a probably bogus arrest. You tell her you’ll work
for $200 an hour, and ask if she can forward you $5000 for bail, which
you say you’ll try hard to have the magistrate set. You also request
that the fiancée forward four hours worth of fees, which you figure
should cover the initial wrangling over bail. She agrees, and sends you
$800 on top of the $5000 for bail. You properly deposit the funds in your
client trust account. The next day, you work diligently for three hours
in trying to get bail set, but have no luck. The client and his fiancée
are up in arms against you. They are red with anger that you were so unsuccessful
at a time they desperately needed you. They demand to be refunded for
all that was paid, and immediately. So you return the $5000 to the fiancée
and leave the $800 advance in the account, expecting a resolution of the
dispute shortly. Any ethical problems?
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