Can a lawyer post cash in lieu of a surety bond for a client, and from what kind of account should the check be drawn?

Plain-English summary

The inquiry asked whether the Code or the Rules prohibited an attorney from depositing cash in lieu of a surety bond with a clerk of court, magistrate, or municipal judge for a client, using either (a) a check drawn on the attorney's trust account from the client's funds, or (b) a check drawn on the attorney's own non-trust account, leaving it unclear whether the attorney advanced money to the client.

The committee broke the question into three issues. First, an attorney may not advance his own money to a client as cash in lieu of a surety bond: DR 5-103(B) and Rule 1.8(e) expressly prohibit advancing or providing financial assistance to a client in connection with pending or contemplated litigation, and posting cash in lieu of bond from the lawyer's funds is such prohibited assistance. Second, the attorney may instead transmit money the client had already provided, so long as the client is given notice that the money will be used as cash in lieu of surety. Third, on the type of account, the check must be drawn on the client's funds held in an identifiable trust account maintained in the state where the law office is situated (DR 9-102 and Rule 1.15), and the trust-account check must clearly indicate the purpose for which it was drafted. The committee explained that DR 9-102(A) and Rule 1.15(a) require all funds paid to an attorney, other than advances for costs and expenses, to be held in such identifiable trust accounts, reflecting the prohibition on commingling and the need to separate client funds from the lawyer's to avoid even the appearance of impropriety. While neither the Code nor the Rules expressly barred using a non-trust-account check, the committee said attorneys should use a trust-account check to avoid any appearance of impropriety and commingling.

Currency note

This opinion was issued in 1990, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Common questions

Q: Could a lawyer post his own money as cash in lieu of a client's bond?

A: The committee said no. That is prohibited financial assistance to a client in connection with litigation under DR 5-103(B) and Rule 1.8(e).

Q: Could the lawyer post the client's own money?

A: The committee said yes, if the client is given notice that the money will be used as cash in lieu of surety and the funds are drawn from an identifiable trust account.

Q: What kind of check should the lawyer use?

A: A check drawn on an identifiable trust account maintained in the state where the office is located, clearly indicating the purpose for which it was drafted, per DR 9-102 and Rule 1.15.

Background and rules framework

The opinion applied the former Code's DR 5-103(B) (financial assistance) and DR 9-102 (trust accounts) alongside Rules 1.8(e) and 1.15 of the Rules of Professional Conduct, corresponding to Model Rules 1.8 and 1.15. It distinguished the lawyer's own funds (prohibited) from the client's funds held in trust (permitted with notice).

Citations and references

Rules of Professional Conduct:

• Code DR 5-103(B) / Rule 1.8(e) / Model Rule 1.8: no financial assistance to a client in connection with litigation.
• Code DR 9-102 / Rule 1.15(a) / Model Rule 1.15: client funds must be held in an identifiable trust account; no commingling.

See also

• SC Bar Ethics Op. 90-02: Guaranteeing a Client's Loan
• SC Bar Ethics Op. 90-24: A County Attorney Recruiting a Taxpayer Plaintiff

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-90-06/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 90-06

Does the current or proposed Code of Professional Responsibility prohibit an attorney from:

1. depositing cash in lieu of a surety bond with a clerk of court, magistrate or municipal judge, on behalf of his or her client, using:
   a. a check drawn on the attorney's trust accounts from funds deposited in that account from the client;
   b. a check drawn on the attorney's account, not identified as a trust account, so that it is unclear whether or not the attorney advanced any money to the client for cash in lieu of bond?

Summary:
The current Code of Professional Responsibility does not expressly prohibit an attorney from depositing a check as cash in lieu of a surety bond with a clerk of court, magistrate or municipal judge on behalf of his or her client provided the check is drawn on the client's funds deposited in an identifiable trust account maintained in the state in which the attorney's law office is situated. (DR 9-102 and Rule 1.15 of the Rules of Professional Conduct of South Carolina). The trust account check should also clearly indicate the purpose for which it was drafted. Although the Code of Professional Responsibility and Rules of Professional Conduct does not expressly prohibit an attorney from utilizing a check drawn on an account other than an identifiable trust account, it should be the practice of all attorneys to do such in order to avoid any appearance of impropriety and commingling of funds.

Opinion:
Although an attorney may deposit with a clerk of court, magistrate or municipal judge a check drawn on an identifiable trust account as cash in lieu of a surety bond, he or she may not advance money to a client in lieu of a surety bond. The rules of Professional Responsibility and the Rules of Professional Conduct expressly prohibit cash advancements or any financial assistance to a client in connection with pending litigation. An attorney may, however, make such advances from monies already provided him by the client provided (1) the clients is given notice the money, as provided, will be used as cash in lieu of surety; and, (2) the funds will be drawn on an identifiable trust account maintained in the state in which the attorney's law office is situated.

The Rules of Professional Responsibility and Rules of Professional Conduct specifically outline instances in which an attorney may advance cost for a client due to pending or contemplated litigation and instances to the contrary.

To the Committee, the aforementioned question raises three (3) issues: (1) may an attorney advance money to a client for cash in lieu of a surety bond; (2) if not, may the attorney transmit monies previously provided him by the client to court officials as cash in lieu of bond; and, (3) if use of checks is permissible, on what type of account should funds be drawn?

1. Advancement of Money to Client as Cash in Lieu of Surety Bond. Disciplinary Rule 5-103(B) of the Rules of Professional Responsibility and Rule 1.8(e) of the Rules of Professional Conduct expressly prohibit cash advancements or any financial assistance to a client in connection with pending or contemplated litigation.

DR 5-103(B) states, in pertinent part, that:
"While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to his client. . . ." (emphasis added) Rule 1.8(e) states, in pertinent part, that:
"A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation." Clearly, the advancement of money to clients as cash in lieu of surety bond is prohibited as providing financial assistance to a client in connection with pending or contemplated litigation.

2. Circumstances under which attorney may transmit monies previously provided him by the client to court official as cash in lieu of surety bond.

3. Type of account from which funds should be drawn.

An attorney may deposit a check as cash in lieu of a surety bond with court officials provided the check is drawn on the client's funds deposited in an identifiable trust account maintained in the state in which the attorney's law office is situated. (DR 9-102 and Rule 1.5 of the Rules of Professional Conduct). The trust account check must clearly indicate the purpose for which it was drafted and the client must be given notice of the attorney's intentions.

DR 9-102(A) and Rule 1.15(a) clearly mandate that all funds paid to an attorney, other than advances for costs/expenses, shall be deposited in identifiable trust accounts maintained in the state in which the law office is situated. The spirit of DR 9-102 reflects a prohibition against commingling of attorney's fees with monies of clients and promotes the separation of funds of a client from that of an attorney in order to avoid even the appearance of impropriety.