Does a law firm need to treat an in-house account for its employees' own funds as a client trust account?
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This page answers the general question as of 1986. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The committee reviewed an inquiry about establishing an in-house trust account to be used for the deposit of funds belonging to law firm employees. The committee concluded that if the account had no client funds in it, it did not present an ethical question.
The committee did raise a separate point. It questioned whether depositing funds belonging to an employee who is not a lawyer into such an account might create an attorney-client relationship, but it did not attempt to answer that question.
Currency note
This opinion was issued in 1986, before the 2006 revisions to the Washington Rules of Professional Conduct. The trust-account and safekeeping rules were later renumbered and amended. Treat this page as historical context, not current guidance.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: Is an account for a firm's own employees' funds an ethics problem?
A: Not on these facts. The committee concluded that if the account had no client funds in it, it did not present an ethical question.
Q: Did the committee resolve whether holding a nonlawyer employee's funds creates an attorney-client relationship?
A: No. The committee questioned whether depositing a nonlawyer employee's funds into such an account might create an attorney-client relationship, but did not attempt to answer that question.
Background and rules framework
The inquiry concerned an in-house trust account for law firm employees' funds. The committee did not cite a specific Rule of Professional Conduct; it concluded that, absent any client funds, the account did not present an ethical question, and it left open the separate question of whether holding a nonlawyer employee's funds could create an attorney-client relationship.
See also
- WSBA Ethics Op. 969: keeping a client trust account at a brokerage house
- WSBA Ethics Op. 949: no commingling of personal funds in a client trust account
- WSBA Ethics Op. 959: trust funds in a multi-state practice
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=95
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Advisory Opinion: 984
Year Issued: 1986
RPC(s):
Subject: Trust account for deposit of law firm employees' funds
The Committee reviewed your inquiry regarding the establishment of an in-house trust account to be used for the deposit of funds belonging to law firm employees. The Committee was of the opinion that if the account had no client funds in it, it did not present an ethical question. The Committee did question whether the deposit of funds belonging to any employee who is not a lawyer into such an account might create an attorney-client relationship, but did not attempt to answer that question.
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