Opinion ID: 1816925
Heading Depth: 1
Heading Rank: 5

Heading: Failure to Provide Client With Accounting.

Text: DR 9-102(B)(3) requires a lawyer to [m]aintain complete records of all funds. . . of a client coming into the possession of the lawyer and render appropriate accounts to the client regarding them. Advance fee payments present special problems to lawyers when it comes to accounting to the client for such payments. Lawyers accepting such payments face questions like the following: When may the lawyer withdraw funds from the trust account? What notice, if any, must a lawyer give the client when withdrawing funds? Must a lawyer give an accounting? To resolve these questions, one court requires lawyers to notify the client in writing of the time, amount, and purpose of any withdrawal together with a complete accounting. In re Disciplinary Action Against Lochow, 469 N.W.2d 91, 97 (Minn.1991). We think such a rule not only protects lawyers from potentially unethical conduct but it also protects the client's interests. We hold that lawyers accepting advance fee payments must notify their clients in writing of the time, amount, and purpose of any withdrawal of the fee together with a complete accounting. No withdrawal of any part of the fee shall occur until the lawyer has rendered some services. Suffice it to say that the prudent lawyer will reduce an advance fee payment agreement to writing, spelling out its purpose, at what intervals the lawyer may withdraw a portion of the fee, and at what intervals the lawyer will render an accounting. The record here shows that Vonnahme asked for an accounting. In his answer to the complaint, Apland admitted he never provided an itemized statement or accounting to Vonnahme. Apland could not do so because he kept no detailed billing records. Apparently, he believed, like the commission, that he had no ethical obligation to account because he thought the fee belonged to him at the time he received it. Nevertheless, contrary to the commission, we conclude Apland violated DR 9-102(B)(3) for his failure to account to Vonnahme for the fee.