Can my firm ask new personal injury and workers' comp clients to advance money for future costs, keep it in a client account, and draw on it as needed?

Plain-English summary

The inquiring attorney's law firm handles numerous workers' compensation and personal injury clients. The firm would like to establish a procedure of asking new clients to advance a certain amount of money for future expenses and costs, place the money in a client account, and use it as needed. The firm asked whether this procedure is ethically appropriate.

The panel agreed that the proposed procedure is guided by Rule 1.15 ("Safekeeping of Property"), and that Rule 1.15(d)-(g) specifically sets forth the procedure for the deposit of client funds. The panel concluded that as long as the law firm follows Rule 1.15 precisely, the proposed procedure would not violate the Rules of Professional Conduct.

In practice

Under this opinion, a firm may collect advance deposits from clients toward future expenses and costs and hold them in a client account, provided the handling conforms exactly to Rule 1.15 and its deposit procedures in subsections (d) through (g). The opinion does not condition the practice on anything beyond precise compliance with Rule 1.15.

Common questions

Q: Is it permissible to ask clients to advance money for future case costs?

A: Per the opinion, yes; the procedure is guided by Rule 1.15, and following Rule 1.15 precisely means the procedure would not violate the Rules of Professional Conduct.

Q: Where do the advanced funds go?

A: Per the opinion, the funds are placed in a client account, and Rule 1.15(d)-(g) sets forth the procedure for the deposit of client funds.

Q: What is the condition on using this procedure?

A: Per the opinion, the firm must follow Rule 1.15 precisely.

Background and rules framework

The opinion applies Rhode Island Rule 1.15 (safekeeping of property), corresponding to Model Rule 1.15. The panel identified Rule 1.15(d)-(g) as governing the deposit of client funds and treated precise compliance with Rule 1.15 as the condition on which the advance-cost-deposit procedure is permissible.

Citations and references

Rules of Professional Conduct:

• MR 1.15 (safekeeping of property)
• RI RPC 1.15(d)-(g)

Statutes:

• None cited.

Cases:

• None cited.

Other opinions cited:

• None cited.

See also

• RI EAP Op. 92-47: Holding Settlement Funds Subject to a Hospital and Collection-Agency Claim
• RI EAP Op. 92-34: Disputed Contingent Fee Held and Arbitrated Under Rule 1.15

Currency note

This opinion was issued in 1992 (Opinion 92-45), after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rule 1.15 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, which amended and relettered Rule 1.15 (safekeeping of property). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2092-45.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

ETHICS ADVISORY PANEL
Opinion #92-45, Request #268
Issued July 23, 1992

An attorney seeks Panel advice regarding the following facts. The attorney's law firm handles numerous clients with regards to workers' compensation and personal injury cases. The attorney would like to establish a procedure whereby the firm would ask new clients to advance a certain amount of money for future expenses and costs. The firm would like to place the money in a client account and use it as needed. The law firm asks if this procedure is ethically appropriate.

The Panel agrees that the above proposed procedure is guided by Rule 1.15 "Safekeeping of Property." Rule 1.15(d-g) specifically sets forth the procedure for the deposit of client funds. As long as the law firm follows Rule 1.15 precisely, the proposed procedure would not violate the Rules of Professional Conduct.