Multistate Professional Responsibility Exam Practice Question
Saru, an attorney, received advance payment from a new client for future representation. Instead of placing those funds in a designated account for client money, Saru deposited them in the office account that covers daily business costs. The client does not receive any legal services for these funds while they remain in the account with business finances. Which approach aligns with professional obligations?
Keep the funds in the business account
Combine the retainer funds with the lawyer’s personal finances as long as the lawyer provides a breakdown of each deposit and disbursement
Keep the unearned retainer in a trust account until it is earned or returned
Deposit the funds in the same account used for office expenses if the lawyer notifies the client and keeps accurate records
Attorneys are required to avoid mixing client funds with their own. Funds paid in advance for legal work are considered the client's money until earned and should be placed in a trust account. This prevents confusion over ownership, protects the client's interest, and ensures a proper framework for returning any unused portion. Placing the money in the attorney’s operating account or personal account, even with the client’s approval, compromises the lawyer’s responsibility to handle unearned fees appropriately and safely.
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