Every South Carolina attorney or law firm that will be handling client or third-party funds is required to have a an IOLTA account (Interest on Lawyer Trust Accounts). See South Carolina Appellate Court Rule 412. South Carolina Appellate Court Rule 417 details the financial record keeping that the Supreme Court requires for attorneys. Much of this rule relates to record keeping regarding the IOLTA account. The financial institutions maintaining IOLTA accounts are required to report to the Office of Disciplinary Counsel when an IOLTA account is overdrawn or a check on such accounts dishonored.
Misuse of trust account funds gets more attorneys disbarred than any other misconduct. However, even improper management of the trust account can lead to discipline. In In the Matter of Joseph Francis Runey, 376 S.C. 536, 657 S.E.2d 779 (2008), the attorney was publicly reprimanded after his financial institution reported ten IOLTA account checks were presented for payment against insufficient funds. The attorney admitted he had not been consistently performing reconciliations on his IOLTA account in a timely manner and, further, that he failed to verify that deposits had been credited to his account prior to disbursement.
This conduct violated South Carolina Rule of Professional Conduct 1.15 (lawyer shall not disburse funds from an account containing the funds of more than one client or third person unless the funds to be disbursed have been deposited in the account and are collected) and further violated Rule 417, SCACR.
The lesson of Runey: keep track of your trust account.
One thought on Ethics Opinions Every South Carolina Attorney Should Know: Part XIII, Keep Track of Your Trust Account
my belief is that the attorney is required to instruct his/her iolta account banker to inform odc in the event of such and if the bank does not agree then the attorney must establish an account with a bank that will so agree – the attorney has an affirmative duty to document such instruction and agreement – the bank has no liability or obligation
my belief is that the attorney is required to instruct his/her iolta account banker to inform odc in the event of such and if the bank does not agree then the attorney must establish an account with a bank that will so agree – the attorney has an affirmative duty to document such instruction and agreement – the bank has no liability or obligation