Does a bank arrangement using a firm's line of credit to cover trust-account obligations comply with the trust-account rules?

Plain-English summary

The inquiry involved a letter agreement between a lawyer and the lawyer's bank. In connection with an extension of credit, the bank agreed to implement an arrangement whereby the firm's general account and line of credit would be used to permit immediate payment of the firm's trust obligations, as foreseen by WSBA Formal Ethics Opinion No. 177.

The committee reviewed the agreement letter concerning the plan approved in Formal Opinion 177 and was of the opinion that the proposal appeared to comply with that opinion.

Currency note

This opinion was issued in 1988, before the 2006 revisions to the Washington Rules of Professional Conduct. The rule then numbered RPC 1.14, governing safekeeping of client property and trust accounts, corresponds to Model Rule 1.15 and was later renumbered and amended. The arrangement also depends on WSBA Formal Opinion 177, whose status should be verified. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Did the committee approve the bank arrangement?

A: The committee was of the opinion that the proposal appeared to comply with Formal Opinion 177, the opinion that had already approved this type of plan.

Q: What did the bank agreement provide?

A: Per the agreement quoted in the opinion, in connection with an extension of credit the bank agreed to implement an arrangement whereby the firm's general account and line of credit are used to permit immediate payment of the firm's trust obligations, as foreseen by WSBA Formal Ethics Opinion No. 177.

Background and rules framework

The opinion concerns the safekeeping of client trust funds under the rule then numbered Washington RPC 1.14, corresponding to Model Rule 1.15. The committee did not independently re-analyze the underlying plan; it measured the specific letter agreement against WSBA Formal Opinion 177, which had approved the use of a firm line of credit to cover trust obligations, and found the agreement appeared to comply.

Citations and references

Rules of Professional Conduct:

• Washington RPC 1.14 (safekeeping of client property), corresponding to Model Rule 1.15.

Other opinions cited:

• WSBA Formal Opinion No. 177 (plan using a firm line of credit to permit immediate payment of trust obligations).

See also

• WSBA Ethics Op. 1066: whether a client can waive the "qualified" trust-account rule
• WSBA Ethics Op. 1052: keeping a client trust account in a Canadian bank
• WSBA Ethics Op. 969: keeping a trust account at a brokerage instead of an insured bank

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=273

Original opinion text

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

Advisory Opinion: 1193
Year Issued: 1988
RPC(s): RPC 1.14; Formal Opinion 177
Subject: Letter of agreement with bank complies with Formal Opinion 177

[The lawyer and the lawyer's bank entered into agreement, which stated, in pertinent part, that in connection with an extension of credit, "you have also asked Bank to implement an arrangement whereby your firm's general account and line of credit are used to permit immediate payment of your trust obligations as foreseen by WSBA Formal Ethics Opinion No. 177, and we have agreed to do so."] The Committee reviewed the agreement letter between you and your bank concerning the plan approved in Formal Opinion 177, and was of the opinion that the proposal appeared to comply with that opinion.