A lawyer could potentially face suspension for failing to keep proper financial records.

Can a lawyer be disciplined for not maintaining proper financial records?

The answer is yes. Under Rule of Professional Conduct 8.1(b), a lawyer can be disciplined for knowingly failing to respond to a demand for information from a disciplinary authority. Obviously, this rule is subject to the Fifth Amendment of the U.S. Constitution and Article 1, Section 9, of the Pennsylvania Constitution. But the lawyer does have an obligation in disciplinary proceedings to produce information that is not protected by the Fifth Amendment and/or protected by attorney-client privilege.

Financial records have been a problem in years past. Lawyers, unfortunately, have not been maintaining their financial records, or have been maintaining only portions of those records, for the five years required by Rule of Professional Conduct 1.15(c).

As a result, when there is a disciplinary issue involving records, the lawyer oftentimes is unable to respond with the records requested. When this happens, there is a delay in the proceedings because the lawyer has to get the records from the bank or subpoenas have to be issued to the bank. It is very time consuming and can be expensive.

Any attorney in a disciplinary proceeding must remember that the cost of the proceedings will be assessed against the lawyer at the end unless there is no finding of violation. So, in some ways, it is in the lawyer’s interest to cooperate in getting financial records. The Office of Disciplinary Counsel has to pay the bank for copies, etc. The lawyer will have to ultimately pay if there is professional discipline at the end.

The Pennsylvania Supreme Court has been somewhat upset by the delays caused by the failure of attorneys to maintain required records. Therefore, every attorney should be aware of what is required.

The requirement is set forth in Rule of Professional Conduct 1.15(c). That rule requires complete records of receipts, maintenance and dispositions of funds and properties in escrow be maintained for five years after termination of the attorney-client relationship. Also, for each trust account, the lawyer has to maintain the following records:

1. All transaction records provided to the lawyer by the financial institution, such as periodic statements, canceled checks, deposited items and records of electronic transactions.

2. Check register or separately maintained ledger, which shall include payee, date, amount of each check, withdrawal and transfer, payor and amount of each deposit. Also, the matter for each transaction must be listed.

3. The records can be in electronic or paper form. If the records are in electronic form, then they must be backed up at least monthly on a separate electronic storage device.

Unfortunately, some attorneys do not maintain these financial records regularly. What is particularly neglected is the separately maintained ledger. These requirements are reiterated in the Pennsylvania Rules of Disciplinary Enforcement, Rule 221(e). These rules apply to all trust funds, including IOLTA funds maintained by a lawyer.

It is important to note that under Rule of Disciplinary Enforcement 221(g) there is a specific requirement that these records may be subject to subpoena and produced, if requested. The following is then noted in the rule:

“Failure to produce such records may result in the initiation of proceedings pursuant to enforcement Rule 208(f) relating to emergency temporary suspensions and other related relief, which permits Disciplinary Counsel to commence a proceeding for the temporary suspension of a respondent attorney who refuses to comply with a valid subpoena.”

Therefore, there is a specific requirement to maintain financial records. If a lawyer doesn’t maintain them and can’t produce them, there could well be an interim suspension.

The bottom line is that whether an attorney uses paper accounts or electronic accounts, these records have to be maintained for five years and in the format suggested by both Rule 1.15 of the Rules of Professional Conduct and Rule 221 of the Rules of Disciplinary Enforcement. This requirement has been in place for a number of years. A lawyer not maintaining these records risks the possibility of a suspension for lack of maintaining the records if they cannot be timely produced. Clearly, that is a result no one wishes to happen. This result can be avoided by reading these rules and complying.

Court-appointed criminal defense lawyers have an obligation to file appeals on behalf of their clients.

I am an attorney handling a criminal case. What is my obligation to file a petition for allowance of appeal on behalf of my criminal defendant if I don’t think the issues are strong enough?

If a lawyer filed a brief to the Superior Court on behalf of a criminal defendant as opposed to filing an Anders brief, then there must have been some arguable merit in the issues. The lawyer, if retained and paid, has an obligation then to file a petition for allowance of appeal to the Pennsylvania Supreme Court unless the client, after informed advice, chooses not to. If the lawyer is court appointed, there normally is an obligation pursuant to the court-appointed rules in each county.

Of course, there are certain caveats. If a lawyer is court appointed or a public defender, normally there is an absolute requirement to file a petition for allowance of appeal. Usually, a court appointment requires a lawyer to handle the case up through the highest appellate court in the state. Public defenders are normally under the same requirement.

Obviously, if a particular county has a different requirement, the client should be fully advised. If the lawyer is privately retained and not paid, the lawyer must timely notify the client no petition will be filed without being retained. The lawyer should also advise, in writing, the time deadlines.

But whether it is a requirement or not, the lawyer has to seek the client’s advice once there is an adverse Superior Court decision. A lawyer has to inquire with the client whether a petition for allowance of appeal should be filed and/or if the client wants such a petition. The lawyer cannot just write the client about the result and then not file a petition for allowance of appeal if the client hasn’t responded. The lawyer has to assume the client will not fully understand. The lawyer must make very clear to the client the need for filing a petition for allowance of appeal.

Obviously, if the lawyer is privately retained, he or she must immediately advise the client of additional fees. If the client refuses to pay the additional fees, the lawyer has to let the client timely know that the lawyer will not file the petition for allowance of appeal. The lawyer can’t wait until the 29th day.

The best thing for the lawyer to do is to notify the court that the client will need court-appointed counsel. If the lawyer is court appointed, then the lawyer should file the petition for allowance of appeal to preserve all of the client’s rights.

There was some suggestion about 10 or 12 years ago that a Pennsylvania petition for allowance of appeal did not have to be filed and that would still preserve issues for federal habeas corpus purposes. But that concept has been criticized and the better practice is to file the petition.

The key thing is notice and communication to the client. The two relevant Rules of Professional Conduct are Rule 1.4, involving full and complete communication and information that would allow the client to make an informed decision, and Rule of Professional Conduct 1.16, whereby a lawyer cannot withdraw without prejudicing a client.

But if a lawyer is privately retained, the lawyer is retained for the particular level he or she is representing the client. In other words, if the lawyer is retained for trial and not for appeal, there is no obligation to file an appeal, despite some judges thinking to the contrary.

Similarly, if a lawyer is in the Superior Court, but not retained in the Supreme Court, that would end the matter. But the lawyer has to make it clear in writing to the client. A good lawyer will do it in person.

In conclusion, a lawyer has a responsibility, particularly if court appointed or assigned as an assistant defender, to take the case all the way up at each level. If the lawyer feels there are no good issues, then an Anders brief should be filed. But an Anders brief is a tough thing to do and many lawyers who have tried the Anders route have found it is easier just to file the brief on the merits. And that is really the best way to give the client a chance. •

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa. 19381.