Office of the General Counsel

• Publication year: 2023
• Pages: 0048

Office of the General Counsel Vol. 28 No. 6 Pg. 48 Georgia Bar Journal June, 2023

Only in Georgia

BY PAULA FREDERICK

"Just as I predicted, Digby fired us," you announce to your summer associate. "I knew it was coming, and it's actually a relief-I didn't believe a word he said! He wants me to refund his retainer fee today, of course," you say. "We agreed that I will keep $500 for the time we spent working on the case."

"Wrong checkbook," you say as your associate hands you the firm ledger. "I need the one for the operating account, not the trust account."

"But you put the retainer in your trust account, right?" your associate asks, her voice quavering. "I sure hope so; otherwise, you're comingling. We learned that in the first week of school!"

"You're in Georgia now," you assure her.

Does a lawyer have to put fees paid in advance into her escrow account?

In most of the country, the answer would be "of course." Not in Georgia.

American Bar Association Model Rule 1.15(c) says that a lawyer must deposit fees and advance payments for expenses into a trust account until they are earned, or until the expense is incurred. But the Georgia Rules of Professional Conduct do not include that language, and Georgia Advisory Opinion 91-2 states outright that Georgia lawyers do not have an obligation to put any fee into escrow.

So you might think there's no need to take a look at the new Formal Opinion from the ABA, "Fees Paid in Advance for Contemplated Services" (issued May 3, 2023). Since it is based on the ABA Model Rule, the opinion finds that a fee paid in advance must go into a trust account because until it is earned, it is "other people's money" held in a fiduciary capacity. The opinion cites public protection and promoting access to legal services as the purposes of the rule-since the lawyer has the

unearned money in escrow, she can refund it...