Other Client Property

Other Client Property

Money is only one thing a lawyer holds for other people. The third sentence of Model Rule 1.15(a) covers the rest: "Other property shall be identified as such and appropriately safeguarded."¹ That sentence completes a three-part structure. The first requires a lawyer to hold property of clients or third persons, received in connection with a representation, separate from the lawyer's own; the second puts funds in a separate account.² A stock certificate or an original deed cannot be deposited in an account, so the third sentence supplies a different protection: identification and secure storage.

Property reaches well past cash. What a lawyer receives in a representation can include funds for a transaction, payment of a judgment or settlement, an advance deposit against fees, valuable documents to be analyzed, and property of evidentiary value. Everything on that list that is not money falls under the third sentence.³ The duty also protects third persons, because the first sentence names clients and third persons alike. A lawyer who holds a lender's original documents at a closing owes them the same care as a client's own papers. The property must come into the lawyer's possession in connection with a representation, so the lawyer's own belongings stay outside the rule.

The sentence gives two commands. The first is identification: the property must be marked and cataloged as belonging to someone else.⁴ A separate account keeps funds apart by its nature, but a deed has no account, so the lawyer's own records must show what was received, from whom, and for which matter. The rule separately requires complete records of other property, preserved after the representation ends for a period the Model Rule brackets at five years.⁵ A careful catalog supplies the start of those records, and the next section takes up the record-keeping duty.

The second command is safeguarding, and the rule says appropriately because security must suit the item. Lawyers once ran their fiscal affairs from an office safe and held clients' funds there.⁶ Today that safe has only residual use, for temporarily holding certain valuables and safekeeping sensitive documents. Client securities and other valuable or negotiable documents ordinarily belong in a bank safe deposit box maintained separately for client property.⁷ Other client property, such as documents, is identified, cataloged, and kept in a secure location physically apart from the lawyer's own property.⁸ The box must be maintained separately for client property because the rule's first command is separation from the lawyer's own property.

Some jurisdictions add mechanics. One rule requires a lawyer who uses a safe deposit box to store trust funds or property to advise the institution where the box is located that it may include property of clients or third persons.⁹ The notice tells the institution that the contents may belong to others.

Students make two mistakes here, and the two scenes mark both. The first is to read the separate-account sentence as the whole rule and conclude that property other than funds carries no safekeeping duty; the third sentence imposes one. The second is to read appropriately as demanding a bank box for everything, when the bank box is the ordinary home for securities and valuable or negotiable documents.¹⁰

Safekeeping is custody, not ownership. The property never becomes the lawyer's, and the lawyer keeps it secure so that it can eventually go back to the client.¹¹ The Rule's notice and delivery provision sets the clock. On receiving property in which a client or third person has an interest, the lawyer must promptly notify that person. Unless the Rule, other law, or an agreement with the client provides otherwise, the lawyer must promptly deliver whatever the person is entitled to receive and, on request, render a full accounting.¹² Later sections take up those duties.