When could a Vermont firm transfer earned fees from trust and notify the client of trust transactions?

Plain-English summary

A firm asked whether a monthly client ledger satisfied the former Code's prompt-notice and timely-record requirements for trust receipts and disbursements. The committee said a ledger or similar notice at the end of a month with transactions would usually comply, though the meaning of prompt notice depended on circumstances. It noted that large transactions such as real estate closings could require faster disbursement once deposited funds cleared.

The committee also allowed transfer of earned fees when an invoice was sent if the fee was then due and not disputed. If the client later disputed the transfer, the firm had to redeposit the disputed amount immediately. It found no general waiting period before withdrawing earned fees.

On advance notice of trust disbursements, the opinion said none was ordinarily required if the disbursement terms were clear to the client at the outset, unless the engagement agreement required notice. Where the client's approval of documents could matter, the committee said the documents should be shown before disbursement.

Currency note

This opinion was issued in 1998 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history states that the Rules of Professional Conduct applied to lawyer conduct after September 1, 1999. Later rule amendments or opinions may have changed the analysis. Treat this opinion as historical context and verify current rules before relying on it.

Common questions

Q: Did the committee generally accept monthly trust-transaction notices?

A: Yes. It said a month-end ledger or similar notice usually met the former Code's requirements when trust transactions occurred during that month.

Q: Could the firm transfer an earned fee when it sent the bill?

A: Yes, if the fee was due and undisputed. A later client dispute required immediate redeposit of the disputed amount.

Q: Was advance notice required for every trust disbursement?

A: No. The opinion said no general advance notice was needed if the disbursement was clear from the outset, unless the parties' agreement required it.

Background and rules framework

The opinion interpreted former DR 9-102(B) and DR 9-102(C)(3) on notice and records, and DR 9-102(A)(2) on withdrawing fees from trust. Its answers addressed the firm arrangements and rules then in force.

Citations and references

Rules of Professional Conduct:

• Vermont Code of Professional Responsibility DR 9-102(B), DR 9-102(C)(3), DR 9-102(A)(2)

See also

• Vermont Ethics Op. 10-01: Fees from disputed trust funds
• Vermont Ethics Op. 97-07: Prepaid fees in trust

Source

• Landing page: Vermont Bar Association fee opinions
• Original PDF: Opinion 98-05
• Vermont Supreme Court rules history, “These rules apply to lawyer conduct after September 1, 1999.”