As we wind down the year, it’s time to reflect back on 2018. Whatever your concerns, questions, or issues may have been, the answers could be here – if we’re lucky. Because this is the year of YOU. Your well-being. How you manage stress, respond to rotten clients, or cope with law school debt.
Everyone needs a pressure relief valve. Find yours.
Forming a partnership? Among the many issues partners must address is responsibility for the IOLTA account. Presumably, you and your partner or partners will use a common lawyer trust account – this would be the norm. If this is the case, follow these guidelines for proper management of your clients’ funds:
The partnership should maintain one set of records for the joint IOLTA account.
Balance the joint IOLTA account every month when the bank statement arrives.
A designated partner can take responsibility as the primary record keeper, including assumption of responsibility for balancing the account. Remember, however, that all partners remain accountable for client funds and all partners should review the reconciliation and trust account activity.
If possible, arrange for overdraft or other bank notifications to be delivered to all partners in a small partnership or a partnership committee in a large partnership.
Forming a partnership may mean that one or more partners needs to close a previous IOLTA account. If this is the case, consult the checklist for Closing an IOLTA Account available on the PLF Website.
All partners should know the rules and ethics opinions affecting IOLTA accounts. A good place to start is the PLF book, A Guide to Setting Up and Using Your Lawyer Trust Account, available on the PLF Website.
Don’ts for Partnership IOLTA Accounts
A joint account requires coordination of all banking activity. You can agree to divide fees any way you like, but if the intention is to pool client funds in one bank account do not keep separate records for your individual clients. This “ostrich” approach to record keeping – where each partner keeps his or her own records in ignorance of the other – means that no one is truly responsible for the overall activity in the joint IOLTA account. Separate records make reconciliation difficult, if not impossible, and may allow concealment of theft, commingling, or other inappropriate activity.
Don’t delegate trust accounting to your partner without accountability. Every partner should be aware of the status of the joint IOLTA account, even if a particular partner is physically responsible for the record keeping.
Don’t allow one partner to monopolize receipt of overdraft or other bank notifications. This may be the only way to detect theft or mismanagement.
Don’t get lulled into believing that a positive balance online is the same as real verification of sufficient funds on deposit. Your online balance doesn’t include transactions that are “in transit,” such as uncashed checks, unposted debit charges from your eCourt account, or uncredited deposits from client credit card payments. And it tells you absolutely nothing about whose money is in your IOLTA account. The only way to assure yourself that your IOLTA account is in good order is to review your records and properly reconcile the trust account.
Many years ago I met a lawyer who contacted the PLF for help after experiencing a series of legal malpractice claims. The lawyer had missed deadlines, failed to appear in court, and made mistakes in document preparation. During our meeting I learned he was caring for his elderly parents. Nearly every day he was called out of the office to retrieve a prescription, take care of an incident at his parent’s home, or drive his mother or father to the doctor. Keeping a regular work schedule in the midst of this chaos seemed impossible. Winding down the practice was not an option – his family needed the income. The solution? He closed his office on Fridays. New and existing clients were informed of the office hours. The lawyer also explained his strategy to health providers, obtaining their cooperation in scheduling regular medical visits on Fridays. He was fortunate to practice in a smaller legal community where colleagues, opposing counsel, and the court were understanding. The final secret to his success was a full-time legal secretary.
Not all lawyers are as fortunate as the one described above. You may practice in a large, sprawling community where few lawyers know one another and bench-bar relations are nonexistent. Hiring a full-time legal secretary? Sounds great, if you have the money. No matter what the circumstances may be, there are always options. If you are a lawyer in Oregon struggling with caregiving and lawyering, contact the OAAP and the PLF. The OAAP can provide emotional support and personal assistance. A practice management advisor can help you strategize about how to adjust the scope of your practice. Both services are free and confidential.