Lawyer Trust Account Georgia

Common Lawyer Trust Account (IOLTA) Mistakes

The following three management principles for a trust account for your clients can protect you from hefty fines and even from being disbarred.

  1. Properly track client funds.

Precise records must be kept at the client level. Insist that client’s names or file numbers be notated on checks at the time of issue. This will aid in the reconstruction of the trust account in the event of an audit or loss of records due to computer crash, natural disaster or any other data integrity issue. Compare the individual client balances against the overall account on a monthly basis as a way to catch any errors.

  1. Keep attorney funds and client money separated.

Commingling attorney funds with client money is a major violation (See Rule 1.15(II)(b) of the State Bar of Georgia). Keeping money properly separated is often more easily said than done. You will almost certainly need to develop protocols for a wide variety of scenarios to legally maintain separation of attorney and client funds. Here are some questions to help you put protocols in place:

  • When should earned fees or reimbursements be removed from the account?
  • Does interest earned on retainer fees while in the trust account belong to you or the client?
  • When a client provides one check for multiple purposes such as your legal fees and a court filing fee, does it go into the business account or trust account?
  • Are non-refundable retainers acceptable in your county?
  • Can bills such as overhead office expenses be paid directly out of the trust account?

These questions and others are very common and should be clearly addressed with your entire team to ensure that you are protecting yourselves and each other from costly mistakes.

Related posts: