Friday, March 2, 2012

Two recent cases illustrate basic principle of lawyer accounting: if the client overpays, you can't pocket the money!

Suppose you go to a store and pay with a $10 bill, but thinking you paid with a $20, the cashier gives you more change than you deserve. Would you correct the error?   You don't need to tell me... but let me tell you this, if you are a lawyer and the cashier is a client paying for your bill, you better....!

Two separate cases reported this month in the Legal Profession blog deal with the issue.  In the first one, Iowa Supreme Court Attorney Disciplinary Board v. Ries, Jr, an attorney was suspended for not refunding the clients after it was pointed out they had paid the bill twice.  The attorney charged the client a $500 retainer but, after the representation ended, the final invoice failed to credit the $500 that had already been paid. The attorney then did not pay attention to the client's concerns when the client discovered the error and complained the attorney had been paid $500 more than he was entitled to.

In the second case, the Minnesota Supreme Court imposed an indefinite suspension of no less than two years to an attorney who had engaged in a pattern of misrepresentations, failed to maintain a trust account and failed to pay an arbitration award.  Among other things, at one point the attorney was to receive an initial retainer payment of $1,000. She mistakenly was paid $5,000 which she did not place in escrow and did not refund when she was confronted with the error and discharged.

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