Tiplet: Bank Holds on IOLTA Deposits

Most lawyers are aware that funds held in trust cannot be disbursed until they are fully cleared. Deposits submitted electronically or by wire speed up the process, as does cash. Credit card payments are generally settled and in your account within one to three business days. Checks are usually the slowest to process and are not “cleared” until they are collected and paid by the issuing bank, even if the lawyer’s bank has a policy of making funds available in a shorter period of time. See Sylvia Stevens, Waiting for ‘Go’ Dough: A primer on disbursing client funds, OSB Bulletin 21 (June 2006).

The Professional Liability Fund recommends:

For an ordinary transaction with an established client or known third party, wait three banking days for locally written checks, five banking days for checks written within Oregon, but outside your local area, and ten or more banking days for out-of-state checks. Note, that checks for
$5,000 and over may be held by banks for seven banking days, whether drawn on a local, instate, or out-of-state bank, therefore allow sufficient time for these checks.

To avoid the growing problem of check scams, wait at least ten banking days before disbursing funds in the following circumstances: (1) the transaction is with a new client or a client you are unsure about; (2) the check is very large; (especially compared with the extent of legal services
provided, if the check is a retainer); (3) the check is from an unknown third party; or (4) any aspect of the transaction raises (or should raise) your suspicions. Remember that drafts or other instruments may take longer than ten days to process. To verify that funds have been collected, ask your bank to contact the issuing bank.

Source: “Frequently Asked Trust Account Questions.” From the PLF website, select Practice Management > Forms > Trust Accounting.

How to shorten bank holds

When are holds applied?

Holds may be applied by your local branch at the time of deposit or overnight during processing. Since checks over $5,000 are the most likely to present problems, review your accounts carefully. If in doubt, contact your bank.

 

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When Former Client Conflicts are Disqualifying

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Division 1 of the Washington Court of Appeals recently issued a significant decision applying a new standard for former client conflicts in the disqualification context. In Plein v. USAA Casualty Insurance Company, the plaintiff homeowners filed an insurance “bad faith” claim against their property insurance carrier, defendant USAA, over coverage for a fire and subsequent…

via Court of Appeals: New Standard in Disqualification for Former Client Conflicts — NWSidebar

Last Call for Getting Paid – October 2 CLE Event

Don’t miss out on the chance to attend “Getting Paid” on Wednesday, October 2, 2019.  Learn how to talk to clients about money, incentivize clients to pay, collect accounts receivable, and modernize billing and payment practices. Designed for lawyers, legal staff, and office administrators – anyone interested in improving billing and collection practices.

When and Where

Wednesday, October 2, 2019 from 10:00 a.m. to 11:15 a.m. Pacific Time. This is a live, online webinar.

How to Register

Click herechoose the image above, or visit the Upcoming CLE page. Secure payment processing powered by Eventbrite. Visa, MasterCard, Discover, and American Express accepted. Program materials included in the $25 registration price. Group discounts available to firms who wish to register 5 or more attendees. Contact me for more information.

Topics include

  • Identifying your fee strategy
  • Ensuring the client is invested in the case
  • Documenting and reinforcing fee discussions
  • Exploring the advantages of automated billing systems
  • Using billing descriptions clients understand
  • Making it easy for clients to pay
  • Sourcing the latest options in credit card processing and click-to-pay invoicing
  • Unbundling services to meet marketplace demands
  • Offering hybrid fee agreements
  • Getting practical about collection

Can’t Attend?

Video and audio recordings will be available to download along with the program materials shortly after the live program event.  Price: $25. Contact me or visit my online CLE store to place an order.

Don’t Miss Out!

All Rights Reserved 2019 Beverly Michaelis