LawBank Hosts Ethics CLE Program: Trust and Operating Accounts with Jane B. Cox
On September 15, 2021, LawBank hosted a lunchtime CLE program on trust account management. The presentation, titled “Trust and Operating Accounts: Running Your Business to Avoid Ethics Problems,” was hosted by Jane B. Cox. Jane is an Assistant Regulation Counsel in the Trial Division of the Colorado Supreme Court Office of Attorney Regulation Counsel. She investigates and prosecutes lawyers in disciplinary and other regulatory proceedings. The Office of Attorney Regulation Counsel offers a half-day trust account school for lawyers and legal support professionals interested in furthering their education on trust accounts. Many lawyers are involved in the management of trust and operating accounts, but this complex facet can be difficult for solo and small firm attorneys in Colorado, especially as it relates to ethical issues.
Jane began the program by providing an overview of trust and operating accounts for solo and small firm lawyers. Her first topic was trust account management, which included defining the difference between trust accounts and office accounts. Jane explained that trust accounts hold money that does not belong to the lawyer, such as advanced retainers, flat fees, or settlement proceeds. Office accounts —often called “professional,” “business,” or “operating” accounts— include only earned fees. Jane advised that any lawyer in private practice who is entrusted with funds belonging to a client or third person needs to maintain a trust account, and she explained the specifics of trust accounts. According to Jane, most private practice attorneys in Colorado have a trust account that is a COLTAF (Colorado Lawyer Trust Account Foundation) account. She shared what COLTAF is and how the organization uses the interest that is paid to them. This includes providing legal services for underserved populations and promoting knowledge and awareness of the law in Colorado communities.
Next, Jane discussed “commingling,” detailing the Colorado rule that states lawyers must segregate client or third-party funds from their funds. The main reason that comingling is prohibited is to protect clients’ funds. Commingling can put client funds at risk from lawyers’ creditors, such as the IRS, heirs, bankruptcy trustees, and other creditors. Jane then provided everyday examples by sharing hypotheticals. The hypotheticals covered guidelines on “cushions,” disbursal of earned fees, lawyers as escrow agents, handling settlement proceeds, disputes with clients, and Rule 1.15A(c).
To conclude the presentation on trust management, Jane shared trust account bookkeeping principles and best practices, including which documents need to be kept and basic trust account do’s and don’ts. The Office of Attorney Regulation Counsel offers a Colorado Lawyer Self-Assessment Program, which is confidential, can be completed online, and awards attorneys with CLE credit upon completion.
LawBank regularly hosts trainings for the solo and small law firm community in Denver and throughout Colorado. If you are interested in future CLE or business advisory offerings, visit the events page to view upcoming programs hosted by LawBank.
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