May a Missouri lawyer pay personal or firm expenses directly from earned funds still in the client trust account?

Short answer No. Once deposited funds are good funds and belong to the lawyer, they must be transferred reasonably promptly to a personal or business account before being used for expenses.

Bar

MOLEC

Issued

2020

Apply this to your situation

This page answers the general question as of 2020. Ask about yours and see what the current Missouri Rules of Professional Conduct say for your facts, with citations.

How much weight this carries: Under Missouri Supreme Court Rule 5.30, formal opinions are binding; informal opinions are advisory. Source.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The opinion prohibits using the trust account itself to pay a lawyer's personal or firm expenses, even after a fee is earned or an expense has been paid and the money belongs to the lawyer.

Once the deposit is good funds under Rule 4-1.15(a)(6), Rules 4-1.15(a) and (c) require the lawyer-owned amount to be transferred reasonably promptly to a personal or business account. Only after that transfer may the lawyer use it for expenses.

The opinion cites In re Coleman and In re Ehler for the trust-account limits.

In practice

Under this opinion, ownership does not turn the trust account into an operating or personal account. Lawyer-owned money leaves trust first and is spent only from the proper outside account.

Common questions

Q: May earned fees pay an office bill directly from trust?

A: No. The funds must first be transferred to the lawyer's business or personal account.

Q: When should lawyer-owned funds leave trust?

A: Reasonably promptly after they become good funds and belong to the lawyer.

Q: Does the same rule apply to personal expenses?

A: Yes. Neither personal nor business expenses may be paid from trust.

Background and rules framework

Rule 4-1.15(a)(6) and Comment [5] address good funds. Rules 4-1.15(a) and (c) and Comment [6] govern transfer of money belonging to the lawyer.

Citations and references

Rules of Professional Conduct:

Missouri Rules 4-1.15(a), 4-1.15(a)(6), and 4-1.15(c)
Missouri Rule 4-1.15 Comments [5] and [6]

Cases:

In re Coleman, 295 S.W.3d 857, 866 (Mo. banc 2009)
In re Ehler, 319 S.W.3d 442, 450-451 (Mo. banc 2010)

Source

Landing page: Missouri Informal Opinion 2020-14

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

QUESTION: Once Attorney has earned a fee or paid an expense such that funds in the trust account belong to Attorney, may Attorney pay personal or firm expenses directly from the trust account?

ANSWER: No. A trust account is not to be used to pay a lawyer’s personal or business expenses. See In re Coleman, 295 S.W.3d 857, 866 (Mo. banc 2009); see also In re Ehler, 319 S.W.3d 442, 450–451 (Mo. banc 2010). Once funds are “good funds” per Rule 4–1.15(a)(6) and Comment [5], any funds belonging to Attorney should be transferred reasonably promptly from the trust account to Attorney’s personal or business account. Rule 4–1.15(a) and (c) and Comment [6]. Only then may Attorney use the funds for personal or business expenses. In re Coleman, 295 S.W.3d at 866.

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