The Wisconsin Supreme Court plans to meet Friday to hear testimony on proposed changes that would expand attorneys’ ability to use electronic banking to manage trust accounts for their practices.
The hearing will be on an Office of Lawyer Regulation’s proposal that calls for amending the rules of professional conduct that pertain to trust accounts. The trust-account rule has not undergone a significant revision for about seven years.
The petition results from work done by a committee convened by the OLR and comes in response to concerns about checks being used less in business and banking. Among the committee members were representatives of the banking industry, nonlawyers and attorneys in a variety of practice areas, including criminal, family and bankruptcy law.
The current trust-account rule lets lawyers accept only some types of electronic payments. The committee’s proposal would allow additional forms of electronic payment and would let lawyers collect the payments using either an e-banking trust account or an IOLTA account.
The proposed changed would help lawyers better serve the public, said OLR Director Keith Sellen. At the same time, committee members wanted to make sure certain protections would be in place.
“When you use no physical pieces of paper,” Sellen said, “the ability of an investigative agency to understand where the money went is nearly impossible.”
In response to such concerns, the proposal calls for another significant change. Through the creation of two rebuttable presumptions, lawyers would have the responsibility of producing records.
Under the first, lawyers would be presumed to have broken the rule that requires them to hold client and third-party money in trust if they failed to properly deliver any amount owed to the owner or if they were unable to produce records showing what happened to the money.
Under the second, attorneys would be presumed to have converted funds and broken the dishonesty rule if they were unable to provide records showing that the money was still in the trust account.
In addition to the two presumptions, the proposal would also revise record-keeping requirements to include only general guidelines and would transfer various detailed procedures from the requirements to the OLR’s published guidelines. The types of cases the OLR would prosecute would be narrowed.
“This will result in OLR investigating fewer matters of record-keeping and focus on serious cases where funds are not delivered and records are not being kept,” Sellen said.
So far, only the Wisconsin State Bar has filed a comment on the petition. The bar’s Board of Governors unanimously approved it in June.
“I think we tried to get as much comment and insight in the development of our rule,” said Sellen. “As a result, we haven’t had any other comments.”
The committee that developed the rule met from June 2012 to July 2014.
“It was a pretty extensive process,” said Sellen. Follow @erikastrebel