Monday, August 6, 2007

Failure To Pay Yourself= Commingling

If a lawyer fails to remove earned fees from an escrow account, does the lawyer engage in commingling? Yes, according to the Court of Appeals of Maryland. The attorney had been admitted to practice in 1964. He had represented a client in a case that resulted in a substantial settlement. A complaint purportedly signed by the client about the handling of funds was filed with bar counsel. The client advised bar counsel that he had not filed the complaint and was entirely satisfied with the attorney. Bar counsel did not get prompt cooperation and took a close look at the attorney's books. The investigation found the failure to pay earned fees, but did not reveal evidence that the lawyer improperly withheld payments from the client.

In the disciplinary case, the court concluded that the attorney's misconduct was "not willful but rather the result of his own disorganization and reliance on others to manage his accounts." He did intend to shield fees from the IRS. He received no benefit and was remorseful. No suspension. (Mike Frisch)

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