Colorado Supreme Court
Office of Attorney Regulation Counsel
Promoting Professionalism. Protecting the Public.
Revisions Aimed at Interest Rates, Accessibility
In practice, changes to the trust account rules won’t affect attorneys’ compliance.
By JAMES SUDLER
The rules governing attorney trust accounts were changed effective June 17, 2014; and, most lawyers who were in compliance with the previous rule will be in compliance with the new rules and need not worry about changing their practices.
There were two main reasons that the Supreme Court Standing Rules Committee recommended these changes to the Court. First, the Colorado Lawyers Trust Account Foundation (COLTAF) requested that banks which offer COLTAF accounts pay a rate of interest comparable to rates paid on other similar accounts. Second, the Committee wanted to make the rules more accessible to practitioners.
No lawyer will have to do anything to assure their bank is paying COLTAF the required interest. Rather, the burden of assuring compliance rests with COLTAF and the Office of Attorney Regulation Counsel (OARC). These provisions are contained in new Rule 1.15E. Under that rule, lawyers will have to keep their trust accounts at approved institutions, a list of which is maintained by COLTAF, and by OARC. We do not anticipate that any bank currently approved will lose its approval due the changes.
The old rule 1.15 has been reorganized into the following:
· Rule 1.15A – the general duties of a lawyer regarding property belonging to others that the lawyer holds – such as advanced flat fees, retainers, and settlement proceeds.
· Rule 1.15B - the types of accounts that lawyers must have, including trust accounts that are in insured institutions that are approved by Attorney Regulation.
· Rule 1.15C – the use of trust accounts prohibiting things such as cash withdrawals, who may sign trust account checks, and reconciliation of trust accounts.
· Rule 1.15D – the required records that a lawyer or law firm must maintain including maintaining them after a firm’s dissolution.
· Rule 1.15E – the requirements for a financial institution to be approved to offer trust accounts.
As noted, most lawyers who were in compliance with the old rule will be in compliance with the new Rule 1.15 without doing anything. However, the Committee made many changes to the old rule in the interest of clarification, consistency and readability. We recommend, of course, that every lawyer review the rule. And, for lawyers interested in learning more about how to properly maintain their COLTAF accounts, the Office of Attorney Regulation Counsel offers its Trust Account School. The new rules are discussed in detail and any questions about them or about specific issues are addressed in this morning-long program.
James Sudler is Chief Deputy Regulation Counsel in the Office of Attorney Regulation Counsel and was chair of the subcommittee that considered revisions to the trust account rules.