If you are a a lawyer and happen to mismanage a trust account, there will be consequences to pay for your mistakes, even a disbarment. Below are some mistakes lawyers have made in the past that yon can learn from:
Borrow money from a trust account – Some lawyers will take the funds out before they have earned the right to. Usually they are the ones with cash flow issues, concerned about paying office rent, payroll, etc. Some also will take out the funds with the intention of replacing the money later on. This can lead down to a slippery slope if you’re not careful and both your career and the lives of your clients can be at stake.
Co-mingling lawyer funds with client funds – Some lawyers lack the understanding of how a trust funds actually works. One mistake lawyers make is by having the legal and the court filing fees all be in one check from the client. Bar association rules requires the check to go into a trust account because the filing fee portion of the check must be held in trust. Lawyers also must not user the funds needed to cover their overheard expenses from their trust accounts. There have been times where lawyers have done this as a way to hide their assets, which in turn is an ethics violation.