69 The Alabama Lawyer 103 (2008). Rule 1.15(e) of the Rules of Professional Conduct: A Banker's Perspective on Section (e) Compliance.

• Author: BY TIMOTHY P. McMAHON

The Alabama Lawyer

2008.

69 The Alabama Lawyer 103 (2008).

Rule 1.15(e) of the Rules of Professional Conduct: A Banker's Perspective on Section (e) Compliance

Rule 1.15(e) of the Rules of Professional Conduct: A Banker's Perspective on Section (e) ComplianceBY TIMOTHY P. McMAHON The entire text of Rule 1.15 of the Rules of Professional Conduct was published in the November 2007 issue of The Alabama Lawyer. Changes in that rule have recently taken place, as most are aware. However, a part of the rule has been in effect since July 1, 1997 and apparently requires the attention of the bar.

Rule 1.15 (e) requires a lawyer to enter into an agreement with a bank, where the lawyer maintains a trust account, that provides for the bank to report certain overdraft activity on the trust account to the Office of the General Counsel of the Alabama State Bar. Pursuant to the agreement, the rule requires reporting when an item is presented against a trust account with insufficient funds, and the item is returned for insufficient funds or the item is paid, but the overdrawn account is not covered within three business days of the date the bank sends notification of the overdraft to the lawyer.

It appears that the obligations of Section (e) are infrequently observed. Both an informal survey conducted several years ago and another more recent informal survey indicated inadequate compliance with Section (e) and often a lack of knowledge of the requirements it imposes.

Every attorney has a duty to assure that a trust account he or she uses is in conformity with Rule 1.15 (e). The Rule is very specific in that respect. No matter what the practicalities may be for the possibility of sanctions for failure to comply with Section (e), an agreement with the bank should be put in place by each lawyer who has a trust account.

No lawyer should be lulled into a sense of complacency by the notion that the bank will make sure that the agreement is put in place. Again, the Rule is very specific. The duty rests with the lawyer and not the bank. Also, bank officers and employees were questioned as part of the previously mentioned surveys. Typically, bankers know less about the requirements of the Rule than lawyers.

It is also suggested that lawyers reach an agreement with their bank that is very specific about the circumstances that have to be reported. Big...