Funds for Clients Burned by Lawyers

"In fiscal year 2006, the Lawyers' Fund for Client Protection (Fund) of the Washington State Bar Association (WSBA) made gifts totaling nearly $468,700 to 65 applicants who were the victims of either dishonest conduct or failure to account for client funds by 26 lawyers." Press release, Oct. 13, 2006.

This year, individual gifts from the Fund ranged from a few hundred dollars to $75,000. The majority of these applications concerned unearned fees paid to lawyers who abandoned their practice, or who failed to perform the services for which they were employed, and who failed to refund advanced fees and costs. A smaller number of the applications involved outright theft or conversion of client funds for the lawyer's own purposes. Areas of practice involved included family law (dissolutions, child support, and paternity actions), probate and trusts, personal injury, criminal law, and others.

The Fund is financed by members of the bar; it does not use any tax dollars.Id. Each active lawyer pays $13/year; the Fund also received interest income and collects some money from lawyers as restitution.

More information is in the Lawyers' Fund for Client Protection's (Sept. 2006).Annual Report. A table (p. 2) shows, for each year since 1988, how many applications were received by the Fund, how many were approved, how many lawyers were approved (i.e., found to have behaved so badly that their clients were entitled to funds), and the amount paid. We can also contrast the number of applications with the number of active bar members. So, while it's dismaying that there was need to pay out $468,695 last year at all, I'm impressed that there were only 139 applications for funds when WSBA has over 26,000 active members. The successful claims involved 26 lawyers -- a tidy .1%

The annual report describes two programs designed to prevent loss in the first place: random audits of lawyers' trust accounts and a requirement that banks report to WSBA any overdrafts on trust accounts. Pages 8-36 of the annual report give summaries of the successful applications -- short, cautionary tales about how not to run your practice.

Oct. 30 postscript: By the way, one of the lawyers whose former clients the fund paid was William Joice, who was convicted in December of shooting Kevin Jung, a rival attorney. See posts: conviction, sentencting, another note on sentencing, and Jung's death.

Filed in: WSBA, Lawyers'-Fund-for-Client-Protection, ethics, practice-of-law, Joice, Jung