Does a lawyer who runs a separate licensed escrow business have to follow the lawyer trust-account rule, or just the escrow-agent statute?

Plain-English summary

The committee was of the opinion that the issue is of significant concern to the bar and proposed a formal opinion for adoption by the Board of Governors. In summary, the committee was of the opinion that if a lawyer is licensed as an escrow business agent under RCW 18.44 and maintains an escrow business entirely separate and apart from a law practice, including not holding himself or herself out as a lawyer in engaging in the escrow business, then the lawyer need not comply with RPC 1.14 but rather with the statutory requirements regarding escrow agents.

However, if the lawyer held himself or herself out as a lawyer, then RPC 1.14 must be complied with. An editor's note refers readers to Formal Opinion 187.

Currency note

This opinion was issued in 1990, before the Washington State Bar Association's adoption of the 2006 revisions to the Washington 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 Treat this page as historical context, not current guidance.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: Does the lawyer trust-account rule apply to a lawyer's separate escrow business?

A: Under this 1990 opinion, not if the escrow business is licensed under RCW 18.44, kept entirely separate from the law practice, and the lawyer does not hold out as a lawyer in it; the escrow-agent statute governs instead.

Q: When does RPC 1.14 still apply?

A: The committee was of the opinion that if the lawyer holds out as a lawyer in the escrow business, RPC 1.14 must be complied with.

Q: Was this issued as a final advisory opinion?

A: The committee proposed a formal opinion for adoption by the Board of Governors and treated the issue as significant; an editor's note points to Formal Opinion 187.

Background and rules framework

At the time of this opinion, Washington's RPC 1.14 governed the safekeeping of client property, the subject the current Model Rules place in Rule 1.15. RCW 18.44 licenses and regulates escrow agents. The committee drew the line at holding out as a lawyer: a genuinely separate, non-lawyer-branded escrow business follows the statute, while an escrow practice conducted as a lawyer falls under RPC 1.14.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property)
• Washington RPC 1.14 (as numbered at the time of the opinion)

Statutes:

• RCW 18.44 (escrow agent registration)

Other opinions cited:

• WSBA Formal Opinion 187 (cross-referenced in an editor's note)

See also

• WA Ethics Op. 1320: Trust Account Overbalance and Earned Fees
• WA Ethics Op. 1327: Trust Funds With More Than One Claimant

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=418

Original opinion text

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

The Committee was of the opinion that the issue raised is of significant concern to the bar, and therefore has proposed a formal opinion to be adopted by the Board of Governors. In summary, the Committee was of the opinion that if a lawyer is licensed as an escrow business agent as set forth in RCW 18.44, and maintains an escrow business entirely separate and apart from a law practice, including not holding himself or herself out as a lawyer in engaging in the escrow business, then the lawyer need not comply with RPC 1.14, but rather with the statutory requirements regarding escrow agents. However, if he or she held himself or herself out as a lawyer, the RPC 1.14 must be complied with.

(Editor's Note: See Formal Opinion 187.)