State Bar Ethics Opinions cite the applicable California Rules of Professional Conduct in effect at the time of the writing of the opinion. Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.
May an attorney have a lay signatory on the client trust account?
An attorney may allow a non-lawyer to sign checks drawn on the attorney's trust account, although the attorney must ultimately be responsible for maintaining the integrity of the account.
Rule 8-101 of the Rules of Professional Conduct of the State Bar of California.
The question has been posed as to whether any ethical considerations preclude an attorney from allowing a layperson to have signatory powers over his or her clients' trust account.
For the purpose of this opinion it is assumed that the non-lawyer is not a co-trustee, or vested with any fiduciary responsibilities toward the clients. Deposits and withdrawals would only be made at the direction of the attorney or attorneys in whose name the account is established.
Rule 8-101 of the Rules of Professional Conduct deals with the maintenance of trust accounts. None of the provisions of that rule speak directly to the question presented. The rule's clear purpose, however, is to make the attorney accountable for any funds held for a client's benefit.
Rule 8-101 (A) requires the use of a trust account whenever funds are received or held for the benefit of client, and prohibits the attorney from commingling personal funds with those held in trust.
Rule 8-101 (B) defines the attorney's responsibility with respect to a client's property. These include the following obligations: (1) to notify the client promptly when such property is received; (2) to identify, label, and place such property in a safe place as soon as practicable; (3) to maintain and preserve complete records of such property, render appropriate accounts to the client, and comply with a duly-issued order for an audit of the records; and (4) to make prompt payment as requested by the client of all funds to which the client is entitled.
These rules require the attorney ultimately to be answerable for the integrity of the client's property. This is a fiduciary responsibility which cannot be delegated to another person.
Indeed, as the California Supreme Court noted in Palomo v. State Bar (1984) 36 Cal.3d 785, 795-796 [205 Cal. Rptr. 834], "where fiduciary violations occur as the result of serious and inexcusable lapses in office procedure, they may be deemed 'wilful' for disciplinary purposes, even if there was no deliberate wrongdoing. . . [W]e have repeatedly held that trust account deficiencies are attributable to attorneys - not to their employees." (See e.g., Giovanazzi v. State Bar (1980) 28 Cal.3d 465 [169 Cal.Rptr. 581) Black v. State Bar (1972) 7 Cal.3d 676 [103 Cal.Rptr. 288].)
Assuming, however, that the attorney can be certain that the account is maintained in compliance with rule 8-101, nothing prohibits him or her from giving a non-attorney the purely ministerial job of signing checks drawn on the account.
It bears repeating that this opinion does not sanction giving the layperson any discretion with respect to trust funds, nor does it relieve the attorney of any duties he or she would otherwise have concerning the trust funds.
This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding on the courts, the State Bar of California, its Board of Governors, any person or tribunals charged with regulatory responsibilities, or any member of the State Bar.