- It’s a Springboard, Too
- Meet the New Rule 1.15 (Not the Same as the Old Rule 1.15)
- Help for the Troubled Attorney
- Tip of the Month: PDF Doesn’t Mean “Please Don’t Find Out”
- Got a Tip?
It’s a Springboard, Too
Two former members of the Disciplinary Board, John W. Morris and Robert E.J. Curran, have been appointed by the Governor to the Court of Judicial Discipline of the Commonwealth of Pennsylvania, where they will hear and adjudicate cases involving allegations of misconduct against members of the judiciary. Mr. Morris served on the Disciplinary Board from 1998-2003, and Mr. Curran from 2002-2008.
Meet the New Rule 1.15 (Not the Same as the Old Rule 1.15)
On September 4, 2008, the Supreme Court of Pennsylvania adopted changes to Rule 1.15 of the Pennsylvania Rules of Professional Conduct (Pa.RPC) and Rule 221 of the Pennsylvania Rules of Disciplinary Enforcement (Pa.RDE), dealing with the handling of property of others. The revisions were published September 20, 2008, at 38 Pa.B. 5157, and are now in effect.
Many of the changes represent reorganization rather than substantive changes to the rules. Previously the requirements for money handling were divided between Pa. RPC 1.15 and Pa.RDE 221 in a rather confusing way.
This article will describe substantive changes to Rule 1.15. The subsections of Rule 1.15 are extensively relabeled. We will indicate new subsection labels in (bold parentheses) and the superseded ones in [bracketed italics].1
This is new, displacing the previous [a] down to (b). The new section sets forth definitions of essential terms. Most of these definitions are similar if not identical to definitions previously housed in [RPC 1.15(d)] and various sections of Pa.RDE 221. One that is new is RPC 1.15(a)(10), which coins2 the term “Rule 1.15 funds” to describe a range of funds including traditional lawyer trust funds, those received as an escrow or settlement agent, representative payee, fiduciary, or agent, to the extent the lawyer is in such a role as a result of a client-lawyer relationship or status as a lawyer. The rule preserves the distinction between “qualified funds,” which are held in amounts or for periods of time that are not likely to generate significant interest, and “nonqualified funds,” which are Rule 1.15 funds that are not qualified funds.3
This is a new section split out from the record keeping provision of former [RPC 1.15(a)]. Complete records of financial transactions must be created and kept for five years. The records which must be kept are defined in Subsections (1) and (2):
- all transaction records provided to the lawyer by the Financial Institution or other investment entity, such as periodic statements, cancelled checks, deposited items and records of electronic transactions; and
- check register or separately maintained ledger, which shall include the payee, date and amount of each check, withdrawal and transfer, the payor, date, and amount of each deposit, and the matter involved for each transaction.
Subsection (c) provides that “The records required by this rule may be maintained in electronic or hard copy form. If records are kept only in electronic form, then such records shall be backed up at least monthly on a separate electronic storage device.”
These are not new requirements; they carry over provisions already stated in Pa.RDE 221 (e) and (f) [formerly (f) and (g)]. The duplicated placement in Rule 1.15 and Pa.RDE 221 emphasizes how critical it is that lawyers observe these record keeping standards, at a minimum.
Pa.RPC 1.15(d) [formerly (b)]:
This provision regarding notice of receipt of funds is somewhat changed. Notable is a provision that notice regarding fiduciary funds is governed by fiduciary law, procedure, and rules applicable to the entrustment.
Pa.RPC 1.15(e) [formerly (b)]:
This new subsection splits out the requirements of delivery and accounting of funds. The only change is a provision that delivery, accounting, and disclosure of fiduciary funds are governed by fiduciary law, procedure, and rules applicable to the entrustment.
Pa.RPC 1.15(f) [formerly (c)]:
The provision of the former [RPC 1.15(c)] requiring that disputed funds be retained in trust until the dispute is resolved4 is carried over essentially intact to this section, except that the former limitation of the provision to funds held “in connection with a client-lawyer relationship” is eliminated. The principle applies to all Rule 1.15 funds.
Pa.RPC 1.15(g) through (j) [formerly (e)]:
These four sections dealing with the management of trust accounts are not new; they were split out of the four sentences of the former [RPC 1.15(e).] The breaking of one long paragraph into four separate sections highlights the importance of each of these requirements.
Pa.RPC 1.15(k) [formerly (f)]:
There are two changes to this section regarding the treatment of nonqualified funds. Fiduciary funds are exempted, and the type of account into which the funds must be deposited is identified as a non-IOLTA account rather than a trust account, defined in RPC 1.15(a)(7).
This new section provides for the handling of fiduciary funds. They must be placed in either a trust account or vehicle authorized by the law or the instrument governing the entrustment. There’s more detail, so if you handle fiduciary funds, read the language carefully.
Pa.RPC 1.15(m) and (o) [formerly (g)]:
This section requires that Qualified Funds which are not fiduciary funds shall be placed in an IOLTA account.5 All but the first sentence of the section, defining an IOLTA account in excruciating detail, is excised and moved to a new Section (o), sandwiched around . . .
Pa.RPC 1.15(n) [formerly (h)]:
This section, addressing lawyers who are exempted from participation in IOLTA by the IOLTA Board, is carried over with minor wording changes, and two substantive additions. It is specified that Qualified Funds must be held in a trust account which is not income producing, and “income” is substituted for “interest” in the test of a lawyer’s historical trust account experience.6
Pa.RPC 1.15(q) through (t) [formerly (j) through (l)]:
These sections concern the creation and operation of the IOLTA Board, and probably will not be of much interest to lawyers not named to or employed by the Board, and thus they need not be summarized here.
So there it is, all 1,988 words of it.7 In future issues we will discuss changes to the Comments to Rule 1.15 and the changes to Rule 221.8
Help for the Troubled Attorney
Reader Bob Sharpe writes in response to last month’s item “It’s Not Nice to Dis your Disciplinary Counsel” to express a concern that the article overlooks the lawyer’s mental disability, and suggests we revisit the help that is available for attorneys struggling with mental health issues and other problems. It’s a good point.
The legal profession, being a high-stress occupation, is subject to higher-than-average rates of substance abuse, depression, problem gambling, and other mental health issues. A high percentage of disciplinary cases involve lawyers whose normal competence has been compromised by such issues. The same is probably true of malpractice cases and other adverse consequences lawyers can experience.
Fortunately there are resources available that lawyers suffering from such problems can draw upon. One of the best of these is Lawyers Concerned for Lawyers of Pennsylvania. LCL is a comprehensive assistance program designed to meet the unique needs of lawyers, judges and their family members who are struggling not only with alcohol and drug related problems but also with stress, anxiety, depression, gambling and other emotional and mental health issues. Support is provided by a network of volunteer lawyers and judges from around the Commonwealth, other states, Canada, and Great Britain.
LCL offers a 24-hour helpline at 888-999-1941. It also offers an intervention service through which colleagues and family members can seek help for lawyers who may not realize the scope of their problems or be ready to reach out themselves. Details are available at LCL’s website, www.lclpa.org.
All communications to LCL are confidential. Lawyers working through LCL and other approved lawyer assistance programs are exempt from the requirement to notify authorities of misconduct under the terms of Rule 8.2(c) of the Rules of Professional Conduct.
Tip of the Month: PDF Doesn’t Mean “Please Don’t Find Out”
This month’s tip: if you will be supplying electronic files in discovery, and those files need redaction, make sure you understand the redaction technology you are using.
A lawyer was embarrassed (and perhaps worse) when a document he produced in PDF (Portable Document Format) with redactions of “personal information” turned out not to be so private after all. First, when his opponents copied the text and pasted it into Microsoft Word©®, all the redactions disappeared. As a result, his client the pwner was pwned.9
Second, the redactions turned out not to be of personal data, but of key facts which demonstrated that an affidavit the lawyer had signed was false. This leads to our second recurring Tip of the Month, or the year, or the century – don’t lie. As a recently seen bumper sticker advised, “Always tell the truth. That way, you don’t have to remember what you said.”
[WARNING – the website link in the story is not “work safe” and should not be followed by the easily offended. The case in question is domain name litigation between nude photography sites and the sites in question will be offensive to many.]
Got a Tip?
Or a question, a comment, an idea you’d like to see addressed? We are always glad to hear from you. Write us at firstname.lastname@example.org.
1 Does this lack clarity? Abandon all hope, ye. The new rule offers such breathtaking turgidity that clarity and accuracy are locked in a zero-sum death struggle from which only one shall emerge (at most).
2 Coins – get it?
3 So clever, that.
4 Often referred to by a distinguished former Disciplinary Counsel, PBI lecturer, Widener Law adjunct professor, and newsletter editor as “the stalemate rule.”
5 If IOLTA stands for “Interest on Lawyer Trust Accounts,” IOLTA Account must mean “Interest on Lawyer Trust Accounts Account.” Is that redundant? Or is “accounts” a part of a descriptive prepositional phrase? We will delve no deeper lest the spirit of Mrs. Letzkus, our junior high English teacher of decades ago, will return to compel us to diagram the sentence.
6 Didn’t know there was going to be a test, did you?
7 In contrast, Rule 1.15 of the ABA Model Rules of Professional Conduct contains 320 words.
8Yes, we know, you can hardly wait. Try to occupy yourself – take in a movie, walk the dog, play with the kids. They’ll be here before you know it.
9 For those unfamiliar with the term, the neologistic verb “pwn” has at least two meanings. One meaning, from Internet gaming, is to “own” [originally a misspelling of “own”] or dominate an opponent.10 The other is to control, hack, or hijack another’s computer or website.11 Since the word originated in writing, pronunciations vary; acceptable14 formulations include “pone,” 15 “own,” “pawn,” “poon,” and “pwen.”
10 As in, “I really pwned him on that suppression motion!”
11 A third possible usage is for really desperate Scrabble©® players.12 Or really tricky crossword developers.13
12 The Editor still can’t believe he was once challenged for nailing a triple word score with “muon.” Don’t educated people know anything about particle physics?
13 Another word useful in these situations is “crwth.” It’s a Welsh lyre. It’s in the dictionary. It’s pronounced “crouth,” to rhyme with “tooth.”
14 Yeah, like someone’s going to prove yours is wrong?
15 Used in the 2006 South Park episode Make Love, Not Warcraft.©®16
16 The spell-check for Microsoft Word©® has electronically reported to the Department of Homeland Security that these footnotes were definitely written by aliens.