10 Cardozo L. Rev. 647 (1988-1989)
The Advance Fee Payment Dilemma: Should Payments be Deposited to the Client Trust Account or to the General Office Account

handle is hein.journals/cdozo10 and id is 665 raw text is: THE ADVANCE FEE PAYMENT DILEMMA:
Lester Brickman *
A lawyer possessing client property is acting in a fiduciary capac-
ity.I If the property is in the form of funds, fiduciary safeguards man-
date the deposit of the funds to a client trust account2-a requirement
that has occasioned a considerable volume of disciplinary proceedings
against lawyers.' Disciplinary Rule 9-102 of the Code of Professional
Responsibility4 (DR 9-102), entitled Preserving Identity of Funds
* Professor of Law, Benjamin N. Cardozo School of Law, Yeshiva University. The author
wishes to express his appreciation to his research assistants, Irving Cohen and Nancy Sindell,
who have made important contributions to this article.
I See In re Caplan, 59 A.D.2d 42, 397 N.Y.S.2d 133 (1977); In re Iverson, 51 A.D.2d 422,
381 N.Y.S.2d 711 (1976).
2 A client trust account is a separately maintained bank account that
must be identified as a client or trust account and cannot be the account main-
tained for a lawyer's law firm or other business purposes.... Funds of all clients
can generally be deposited in the same trust account, in which case adequate
records must be maintained of each client's interest in the account.
C. Wolfram, Modem Legal Ethics § 4.8, at 179-80 (1986).
3 [T]here were more than 800 disbarments and suspensions nationally between the
years 1980 and 1985 as a result of violations of attorney trust accounts. The
wrongs include misappropriation of client funds, poor or inadequate record keep-
ing, embezzlement or theft of client funds, conversion of client property, commin-
gling, and poor accounting of client funds.
Weston, Speaking of Ethics, Killing an Ant with a Sledgehammer, 4 Compleat Law. 49, 49
(1987) (citing the American Bar Association Center for Professional Responsibility National
Discipline Data Bank). See Austern, Ethics, 20 Trial 16, 16 (1984) (trust accounts present
potentially serious disciplinary problems for lawyers); Kurzer, Coleman, Leiter & Trager, At-
toreys' Trust Accounts-Rules and Pitfalls, 55 Fla. B.J. 355, 356 (1981) [hereinafter Kurzer]
(A large number of disciplinary proceedings against lawyers-including disbarment in some
cases-stem from the mishandling of client funds.).
4 Disciplinary Rule 9-102 states in pertinent part that:
(A) All funds of clients paid to a lawyer. .. , other than advances for costs and
expenses, shall be deposited in one or more identifiable bank accounts.., and no
funds belonging to the lawyer or law firm shall be deposited therein except as
(2) Funds belonging in part to a client and in part presently or potentially to
the lawyer or law firm must be deposited therein, but the portion belonging to
the lawyer or law firm may be withdrawn when due unless the right of the
lawyer or law firm to receive it is disputed by the client, in which event the
disputed portion shall not be withdrawn until the dispute is finally resolved.
(B) A lawyer shall:

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