Boston--The Supreme Judicial Court today announced that it has adopted a revised ethical rule (Massachusetts Rule of Professional Conduct 1.15) that provides Massachusetts lawyers with a more detailed description of the record-keeping requirements for client and trust funds maintained by any lawyer.  The new rule identifies the records that must be maintained in order to comply with the rule, describes operational requirements for maintaining proper trust accounts, and requires lawyers to reconcile client funds accounts, including the balance held for each client.           

          The new rule is intended to address a persistent problem of lawyers who keep inaccurate or inadequate records of client funds they hold in trust.  Records of the Board of Bar Overseers, the organization that investigates complaints of misconduct against lawyers, indicate a steadily rising number of cases involving inadequate record keeping by lawyers.  Between 1999 and 2002, cases reported to the Bar Counsel as a result of dishonored check notifications involving careless bookkeeping have resulted in 74 admonitions of lawyers. There were also cases of more serious discipline where inadequate bookkeeping was part of the problem.           

          Recognizing the scope of the problem, after considerable study and following the lead of 18 other states, the Board of Bar Overseers proposed amendments to Rules of Professional Conduct Rule 1.15.  The proposed amendments were published in the Massachusetts Lawyers Weekly in March 2001 with a request for comments.  They have been discussed at length by the Massachusetts Bar Association, the Boston Bar Association, and other bar organizations.  The proposals were studied in detail by the Supreme Judicial Court’s Standing Advisory Committee on the Rules of Professional Conduct.  The Committee revised the Board of Bar Overseers’ draft rule to respond to the concerns raised by the comments received as a result of publication and by members of the Committee.           

          The key features of the revised rule are:

          1)      a clear description of the records that must be created and maintained with respect to lawyers’ trust accounts, including check registers, individual client ledgers, ledgers for bank fees, and reconciliation reports every 60 days verifying that funds are being properly maintained in the trust accounts; and

          2)      operational requirements, including use of pre-numbered checks, prohibitions against making withdrawals from trust accounts by ATM card or by checks payable to “cash.”

          The rule change becomes effective January 1, 2004.  It is anticipated that Bar Counsel’s office will make available numerous educational programs for lawyers within the next three months.

          The new rule, Rule 1:15 of the Massachusetts Rules of Professional Conduct, can be accessed on the Internet at www.state.ma.us/courts/rule115.pdf