Sunday, July 1, 2007
Effective today, Wisconsin has amended its ethical rules regulating the handling of funds that are or should be escrowed. A recent article in the Wisconsin Lawyer by State Bar ethics counsel Timothy J. Pierce explains the changes. There is a dissent from the adoption of a new rule that allows the lawyer to treat advanced fees and expenses as earned on receipt. Judge Ann Walsh Bradley considers the change to be "fundamentally wrong...we need do no more than apply fourth grade playground ethics, it is wrong to spend money that is not yours. Some call that stealing."
To a disciplinary prosecutor, this rule (Rule 1.15) is the most important from an enforcement standpoint, as it is relatively straighforward to prove the violation and the consequences can be severe. I have not studied the Wisconsin rule in detail, but Judge Bradley's point is well taken. In D.C., the rule was changed in the reverse manner from in Wisconsin. It was a change for the better. In a D.C. case where "the lawyer owns on receipt" former rule applied, a lawyer who had engaged in theft-like behavior avoided a well deserved disbarment. (Mike Frisch)