Florida Bar Rules Now Require Written Trust Account Plans

The Florida Bar now requires all law firms with more than one attorney to have a written trust account plan in place for each of the firm’s trust accounts. Lawyers must comply with the newly amended rules to avoid stiff penalties.

The major change is the amendment to Bar Rule 5-1.2(c), which goes into effect June 1, 2014. Under the revised rule, each lawyer in a law firm will be responsible for his or her own actions regarding trust account funds.

The plan, according to The Florida Bar News, is required to include the names of all lawyers who:

• Sign trust account checks for the law firm and review all trust account checks
• Are responsible for oversight of reconciliation of the law firm’s trust accounts, both monthly and annually
• Are responsible for answering any questions that lawyers in the firm may have about the firm’s trust accounts

One lawyer might be responsible for all of these functions in a boutique law firm. In a larger firm, a law firm manager or accountant may handle these functions, but his or her work must always be overseen by an attorney who is responsible for the trust accounts.

The amended rule requires that the written trust account plan is disseminated to every lawyer in the firm. The plan must also be updated whenever there are material changes, and all lawyers in the firm must be notified of any changes to the plan.

For law firms that already have written plans, this revised rule presents an excellent opportunity to revisit those plans to ensure that they are up to date, designed appropriately, are being applied consistently and meet the requirements of the revised rule.

Trust accounting violations under Florida Bar Rules can result in sanctions, including admonishment or public reprimands, with more severe penalties for gross negligence or patterns of misconduct.

Draft trust account plans for small and large Florida law firms are available on The Florida Bar’s website, but you may not want to go it alone. We can help you prepare or update your plan, and more importantly, our law firm industry group can evaluate your firm’s current controls around trust accounts to help you stay in compliance with this and other Florida Bar rules. We can advise you on best practices and assist in determining if your firm has appropriate safeguards in place to comply with your fiduciary responsibilities.

Please contact me or another member of our law firm industry group for assistance with assessing your firm’s controls and meeting the requirements of this new rule.