Fees, Billings, & Client Trust Accounts. Iowa Defense Counsel Association. 52 Annual Meeting & Seminar

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1 Fees, Billings, & Client Trust Accounts Iowa Defense Counsel Association 52 Annual Meeting & Seminar Stoney Creek Conference Center Johnston September 23, 2016 Wendell J. Harms Ethics Counsel Iowa Supreme Court Attorney Disciplinary Board 1111 East Court Avenue Des Moines, IA Telephone: (515) Facsimile: (515)

2 Fees, Billings, & Client Trust Accounts Table of Contents Rule of Professional Conduct 32:1.5 - Fees...2 Rule 32:1.5 Selected Comments... 3 Rule 32:1.5 Caselaw... 5 Contingent Fees... 5 Communicating the Fee to the Client...5 Reasonable Fees...6 Division of Fees... 7 Fees Requiring Court Approval...8 Rule of Professional Conduct 32: Safekeeping property... 9 Rule 32:1.15 Selected Comments... 9 Rule32:1.15Caselaw...10 Accountings to Clients Earned Fees Fee Disputes Client Property & Files Settlement Funds Commingling of Client Funds with Lawyer Funds Proving Conversion & Proving a Colorable Future Claim Managing Special Retainers (Advances for Fees & Expenses) Client Trust Account Rule Requirement for client trust account Client Trust Account Rule Action required upon receiving funds, accounting, and records Rule 45.2 Caselaw Client Trust Account Rule Advance fee and expense payments Client Trust Account Rule General retainer... 20

3 Client Trust Account Rule Special retainer...20 Rule 45.9 Caselaw Client Trust Account Rule Flat Fee Rule 45.lOCaselaw Sanctions for Trust Account Mismanagement Rule of Professional Conduct 32:1.5 - Fees (a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses, or violate any restrictions imposed by law. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. (b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client. (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial, or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after 2

4 the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination. (d) A lawyer shall not enter into an arrangement for, charge, or collect: (1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or (2) a contingent fee for representing a defendant in a criminal case. if: (e) A division of a fee between lawyers who are not in the same firm may be made only (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and (3) the total fee is reasonable. Rule 32:1.5 Selected Comments Basis or Rate of Fee [2] When the lawyer has regularly represented a client, they ordinarily will have evolved an understanding concerning the basis or rate of the fee and the expenses for which the client will be responsible. In a new client-lawyer relationship, however, an understanding as to fees and expenses must be promptly established. Generally, it is desirable to furnish the client with at least a simple memorandum or copy of the lawyer's customary fee arrangements that states the general nature of the legal services to be provided, the basis, rate, or total amount of the fee, and whether and to what extent the client will be responsible for any costs, expenses, or disbursements in the course of the representation. A written statement concerning the terms of the engagement reduces the possibility of misunderstanding. [3] Contingent fees, like any other fees, are subject to the reasonableness standard of paragraph (a) of this rule. In determining whether a particular contingent fee is reasonable, or whether it is reasonable to charge any form of contingent fee, a lawyer must consider the factors that are relevant under the circumstances. Applicable law may impose limitations on contingent fees, such as a ceiling on the percentage allowable, or may require a lawyer to offer clients an alternative basis for the fee. Applicable law also may apply to situations other than a contingent fee, for example, government regulations regarding fees in certain tax matters.

5 Terms of Payment [4] A lawyer may require advance payment of a fee, but is obliged to return any unearned portion. See rule 32:1.16(d). A lawyer may accept property in payment for services, such as an ownership interest in an enterprise, providing this does not involve acquisition of a proprietary interest in the cause of action or subject matter of the litigation contrary to rule 32:1.8(i). However, a fee paid in property instead of money may be subject to the requirements of rule 32:1.8(a) because such fees often have the essential qualities of a business transaction with the client. [5] An agreement may not be made whose terms might induce the lawyer improperly to curtail services for the client or perform them in a way contrary to the client's interest. For example, a lawyer should not enter into an agreement whereby services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required, unless the situation is adequately explained to the client. Otherwise, the client might have to bargain for further assistance in the midst of a proceeding or transaction. However, it is proper to define the extent of services in light of the client's ability to pay. A lawyer should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures. Prohibited Contingent Fees [6] Paragraph (d) prohibits a lawyer from charging a contingent fee in a domestic relations matter when payment is contingent upon the securing of a divorce or upon the amount of alimony or support or property settlement to be obtained. This provision does not preclude a contract for a contingent fee for legal representation in connection with the recovery of postjudgment balances due under support, alimony, or other financial orders because such contracts do not implicate the same policy concerns. Division of Fee [7] A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist. Paragraph (e) permits the lawyers to divide a fee either on the basis of the proportion of services they render or if each lawyer assumes responsibility for the representation as a whole. In addition, the client must agree to the arrangement, including the share that each lawyer is to receive, and the agreement must be confirmed in writing. Contingent fee agreements must be in a writing signed by the client and must otherwise comply with paragraph (c) of this rule. Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership. A lawyer should only refer a matter to a lawyer whom the referring lawyer reasonably believes is competent to handle the matter. See rule 32:1.1. [8] Paragraph (e) does not prohibit or regulate division of fees to be received in the future for work done when lawyers were previously associated in a law firm.

6 Disputes over Fees [9] If a procedure has been established for resolution of fee disputes, such as an arbitration or mediation procedure established by the bar, the lawyer must comply with the procedure when it is mandatory, and, even when it is voluntary, the lawyer should conscientiously consider submitting to it. Law may prescribe a procedure for determining a lawyer's fee, for example, in representation of an executor or administrator, a class or a person entitled to a reasonable fee as part of the measure of damages. The lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed procedure. Rule 32:1.5 Caselaw Contingent Fees In Attorney Disciplinary Bd. v. Netti, 799 N.W.2d 591, (Iowa 2011), the Court: concluded that John Netti violated Rule 32:1.5(c) because his contingent fee agreement in one case did not state whether he would deduct the litigation expenses before or after calculating his fee. In another case with a contingent fee, Mr. Netti violated this Rule because he did not execute a written fee agreement with his client. Communicating the Fee to the Client In Attorney Disciplinary Bd. v. Dunahoo, 799 N.W.2d 524, 533 (Iowa 2011), the Court concluded that Kermit Dunahoo violated Rule 32:1.5(b) because of poor communications about his fees with his clients; the Court based its conclusion on Mr. Dunahoo's stipulation that he did not use a written fee agreement in five of the six counts, his stipulation that he had not effectively communicated his fee to three of his clients; and upon proof that he and his assistant told one client different amounts as to his fee to do their bankruptcy. In Attorney Disciplinary Bd. v. Hearity, 812 N.W.2d 614, 619 (Iowa 2012), the Court concluded that Robert Hearity violated Rule 32:1.5(b) because he failed to use a written fee agreement with a client charged with driving while intoxicated in Georgia; the client paid $500 with the understanding that amount was the total fee. After the client discharged Mr. Hearity before he finished the case, he sent her a bill for an additional $1,312. In Attorney Disciplinary Bd. v. McCarthy, 814 N.W.2d 596, 606 (Iowa 2012), the Court concluded that James Mccarthy violated Rule 32:1.5(b) when he did not communicate his fee to his clients within a reasonable time after beginning the representation. Mr. Mccarthy's detailed billing statements to the clients after he provided the service was not sufficient by itself to comply with this Rule. In Attorney Disciplinary Bd. v. Nelson, 838 N.W.2d 528, (Iowa 2013), the Court concluded that Brian Nelson violated Rule 32:1.5(b) when he failed to use a written fee agreement with two clients, when he failed to respond to client questions and complaints about his fee, and when he failed to provide the clients with a final accounting of their retainer. The Court concluded that Mr. Nelson violated Rule 32:1.15(a) by failing to refund a retainer, as he had agreed to do, to a client.

7 In Attorney Disciplinary Bd. v. Ryan, 863 N.W.2d 20, (Iowa 2015), the Court concluded that Vicki Ryan violated Rule 32:1.5(b) when she failed to use a written fee agreement, failed to state her hourly rate, failed to state how her fees would be determined, and failed to respond to the client's requests that she explain her fees and billing statements. In Attorney Disciplinary Bd. v. Santiago, 869 N.W.2d 172, (Iowa 2015), the Court concluded that Frank Santiago violated Rule 32:1.5(b) when he failed to use a written fee agreement and when he failed to contradict testimony from the client's new lawyer that he had not discussed his hourly rate with his client. In Attorney Disciplinary Bd. v. Nelissen, 871 N.W.2d 694, 699 (Iowa 2015), the Court concluded that Alexandra Nelissen violated Rule 32:1.5(b) when she failed to inform her client that she had increased her hourly fee from $150 to $200 other than by using the new rate in her billing. Reasonable Fees In Attorney Disciplinary Bd. v. Pam'sh, 801 N.W.2d 580, (Iowa 2011), the Court: concluded that Eric Parrish violated Rule 32:1.5(a) by collecting unreasonable and illegal fees from two clients when he withdrew all of their retainers from the trust account before he had earned the fees and when he failed to refund the unearned portion of these retainers to the clients. In Attorney Disciplinary Bd. v. Hearity, 812 N.W.2d 614, 619 (Iowa 2012), the Court concluded that Robert Hearity violated Rule 32:1.5(a) when he failed to refund a $500 retainer to a client although he had done nothing to resolve her criminal case in Georgia, a state in which he did not have a law license. In Attorney Disciplinary Bd. v. VHmont, 812 N.W.2d 677, (Iowa 2012), the Court: concluded that William Vilmont violated Rules 32:1.5(a) and 45.9(2) when he used a minimum fee contract in a criminal case. The agreement established an hourly fee arrangement, but it included a $2,500 minimum fee. The Court permits minimum fee arrangements only in the context of a general retainer. Here, Mr. Vilmont had earned $607; collecting a $2,500 minimum fee was not reasonable. The Court also found that Mr. Vilmont violated a number of trust account rules by failing to treat the $2,500 as a special retainer. In Attorney Disciplinary Bd. v. Rhinehart, 827 N.W.2d 169, (Iowa 2013), the Court concluded that Richard Rhinehart violated Rule 32:1.5(a) when he failed to deduct the fees the client had previously paid under an hourly fee agreement as he was required to do under their subsequent contingent fee agreement. By failing to deduct the fee he earned on an hourly basis, Mr. Reinhardt retained fees that he had not earned under the terms of the contingent fee agreement. In Attorney Disciplinary Bd. v. Laing, 832 N.W.2d 366, 373 (Iowa 2013), the Court concluded that Donald Laing and D. Scott Railsback violated Rule 32:1.5(a) by claiming an unreasonable length of time to perform Laing's duties as Conservator for John Klein and Railsback's duties as Laing's lawyer and by charging an excessive hourly rate for providing services to Mr. Klein that did not require legal training or other professional skills.

8 This conduct also violated the Rule prohibiting engaging in misrepresentations and the Rule prohibiting conduct prejudicial to the administration of justice. In Attorney Disciplinary Bd. v. Clarity, 838 N.W.2d 648, (Iowa 2013), the Court concluded that James Clarity III violated Rule 32:1.5(a) when he claimed to have earned a $75,000 special retainer in a complex criminal case; the Court found Mr. Clarity's credibility lacking when he supported his fee with a re-created cryptic billing that did not provides dates of service or the length of time spent on individual tasks. The Court also supported its decision on Mr. Clarity's pattern of withdrawing funds from his trust account, which the Court described as being akin to using the trust account as a personal ATM. The Court also concluded that Mr. Clarity's fee was unreasonable in light of the results, or lack thereof, he obtained for his client. In Attorney Disciplinary Bd. v. Dolezal, 841 N.W.2d 114, (Iowa 2013), the Court concluded that Kenneth Dolezal violated Rule 32:1.5(a) when he billed a client for legal services he provided while his law license was suspended. The Court found further support for this violation because Mr. Dolezal billed the client 5.8 hours for notifying him that his license was suspended and for responding to the Board's investigation of the client's complaint about him. In Attorney Disciplinary Bd. v. Mendez, 855 N.W.2d 156, (Iowa 2014), the Court concluded that Richard Mendez violated Rules 32:1.4(a) and (e)(3) by collecting an unreasonable fee. He had hired an attorney to hand a matter that he was not authorized to handle. He paid this other lawyer more than the amount shown on the other lawyer's bill. The lawyer charged Mr. Mendez's client $558, but Mr. Mendez collected from his client $808 and paid it to the other lawyer. Division of Fees In Attorney Disciplinary Bd. v. Mendez, 855 N.W.2d 156, & 172 (Iowa 2014), the Court concluded that Richard Mendez violated Rule 32:1.5(e)(2) by improperly dividing a fee, on two occasions, with a lawyer in a different firm without obtaining the clients' written consent to do so. With regard to a different client, the Court also concluded that Mr. Mendez violated Rule 32:1.6 by making an improper referral of a client's matter to outside counsel. Fees Requiring Court Approval Probate Procedure Rule 7.2: Fees in probate (1) Every report or application requesting an allowance of fees for personal representatives or their attorneys shall be written and verified as provided in Iowa Code section (2) When fees for ordinary services are sought pursuant to Iowa Code sections and , proof of the nature and extent of responsibilities assumed and services rendered shall be required. Unless special circumstances should be called to the court's attention, the contents of the court probate file may be relied upon as such proof. In determining the value of gross assets of the estate for purposes of Iowa Code section , the court shall not include the value of joint tenancy property excluded from the taxable estate pursuant to Iowa Code section 450.3(5) or the value of life insurance payable to a designated beneficiary. (3) When an allowance for extraordinary expenses or services is sought pursuant to Iowa Code section , the request shall include a written statement showing the necessity 7

9 for such expenses or services, the responsibilities assumed, and the amount of extra time or expense involved. In appropriate cases, the statement shall also explain the importance of the matter to the estate and describe the results obtained. The request may be made in the final report or by separate application. It shall be set for hearing upon reasonable notice, specifying the amounts claimed, unless waivers of notice identifying the amounts claimed are filed by all interested persons. The applicant shall have the burden of proving such allowance should be made. (4) One half of the fees for ordinary services may be paid when the federal estate tax return, if required, and Iowa inheritance tax return, if required, are prepared. When a federal estate tax return is not required, the one-half fee may be paid when the Iowa inheritance tax return is prepared or, when it is not required, when the probate inventory required by the Iowa Probate Code is filed. The remainder of the fees may be paid when the final report is filed and the costs have been paid. The schedule for paying fees may be different when so provided by order of the court for good cause. Cases In Attorney Disciplinary Bd. v. Lickiss, 786 N.W.2d 860, (Iowa 2010), the Court concluded that Stephen Lickiss violated 32:1.5(a) when he took fees without prior court approval in two guardianship/conservatorship cases. In Attorney Disciplinary Bd. v. Van Ginkel, 809 N.W.2d 96, (Iowa 2012), the Court:, citing the bright line established in Rule 7.2(4), concluded that James Van Ginkel violated Rule 32:8.4(d), conduct prejudicial to the administration of justice, when he prematurely withdrew the first half of his fee in a decedent's estate. Rule 7.2(4) requires that the inheritance tax return be "prepared" before taking the first half of the fee. The Court concluded that Van Ginkel's return was not complete since the funeral expenses had not yet been placed on it. As a result, the return was not "prepared", and Van Ginkel's taking of the first half of the fee violated Rule 32:8.4(d). The Court concluded that Mr. Van Ginkel took the second half of his fee in this estate prematurely too. While he had filed the final report, he had not paid the court costs. The Court rejected his argument that escrowing the funds needed to pay the costs should be good enough. He had received a cost estimate from the clerk of court. He violated Rule 32:8.4(d) by prematurely receiving the second half of his fee without payment of the court costs. In Attorney Disciplinary Bcf. v. Kersenbrock, 821 N.W.2d 415, 420 (Iowa 2012), the Court: concluded that Sara Kersenbrock violated Rule 32:1.5(a) when she collected the second half of her fee in a decedent's estate before she filed the final report. In Attorney Disciplinary Bd. v. Morris, 847 N.W.2d 428, (Iowa 2014), the Court concluded that William Morris violated Rules 32:1.5(a) and 7.2(4) when he took the entire fee in a decedent's estate before the court had approved a fee. The court's subsequent approval of his fee did not cure his violation of these two Rules. In Attorney Disciplinary Bd. v. Bartley, 860 N.W.2d 331, (Iowa 2015), the Court concluded thatverla Bartley violated Rules 32:1.5(a), 32:8.4(d), and 7.2 by taking the entire fee in two decedent's estates before filing the final report and before the court approved her fees.

10 Ms. Bartley also violated Rule 32:1.15(c) by not depositing all of these client funds, representing her unapproved and unearned fees, in her trust account. Rule of Professional Conduct 32: Safekeeping property a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of six years after termination of the representation. (b) A lawyer may deposit the lawyer's own funds in a client trust account for the sole purpose of paying bank service charges on that account, but only in an amount necessary for that purpose. (c) A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred. (d) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. (e) When in the course of representation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute. (f) All client trust accounts shall be governed by chapter 45 of the Iowa Court Rules. Rule 32:1.15 Selected Comments [1] A lawyer should hold property of others with the care required of a professional fiduciary. Securities should be kept in a safe deposit box, except when some other form of safekeeping is warranted by special circumstances. All property that is the property of clients or third persons, including prospective clients, must be kept separate from the lawyer's business and personal property and, if monies, in one or more trust accounts. Separate trust accounts may be warranted when administering estate monies or acting in similar fiduciary capacities. A lawyer should maintain on a current basis books and records in accordance with generally accepted accounting practice and comply with any recordkeeping rules established by law or court: order. See, Iowa Ct. R. ch 45. [2] While normally it is impermissible to commingle the lawyer's own funds with client funds, paragraph (b) provides that it is permissible when necessary to pay bank service charges on that account. Accurate records must be kept regarding which part of the funds are the lawyer's.

11 [3] Lawyers often receive funds from which the lawyer's fee will be paid. The lawyer is not required to remit to the client funds that the lawyer reasonably believes represent fees owed. However, a lawyer may not hold funds to coerce a client into accepting the lawyer's contention. The disputed portion of the funds must be kept in a trust account and the lawyer should suggest means for prompt resolution of the dispute, such as arbitration. The undisputed portion of the funds shall be promptly distributed. [4] Paragraph (e) also recognizes that third parties may have lawful claims against specific funds or other property in a lawyer's custody, such as a client's creditor who has a lien on funds recovered in a personal injury action. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client. In such cases, when the third-party claim is not frivolous under applicable law, the lawyer must refuse to surrender the property to the client until the claims are resolved. A lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party; but when there are substantial grounds for dispute as to the person entitled to the funds. Rule 32:1.15 Caselaw Accountings to Client In Attorney Disciplinary Bd. v. Parrish, 801 N.W.2d 580, (Iowa 2011), the Court concluded that Eric Parrish violated Rules 32:1.15(d) and 32:1.16(d) by failing to provide two clients with an appropriate accounting and by failing to return advance fee payments that he had not earned. The Court concluded that Mr. Parrish violated Rules 32:1.15(f) and 45.7(4) by failing to provide to these two clients a contemporaneous written notice and accounting to a client when he withdrew funds from the trust account. In Attorney Disciplinary Bd. v. Nelissen, 871 N.W.2d 694, 699 (Iowa 2015), the Court concluded that Alexandra Nelissen violated Rule 45.7(4) by failing to provide contemporaneous written communication to the client when she withdrew funds from the client trust account. Earned Fees In Attorney Disciplinary Bd. v. Pam'sh, 801 N.W.2d 580, (Iowa 2011), the Court concluded that Eric Parrish violated Rules 32:1.15(c) and (f) and 45.7(3) by withdrawing funds from the trust account that he had not earned. One client had paid him $10,000; an arbitration panel ordered Mr. Parrish to refund $8,467 to this client. Another client had paid him $5,000. In Attorney Disciplinary Bd. v. Denton, 814 N.W.2d 548, 551 (Iowa 2012), the Court concluded that G. Brad Denton II violated Rules 32:1.15(a), (c), and (f) by failing to deposit a client's special retainer in a trust account and violated Rules 45.7(3) and (4) by failing to withdraw such fees from the trust account only as they were earned and upon written notice to the client together with a complete accounting. In Attorney Disciplinary Bd. v. Blessum, 861 N.W.2d 575, (Iowa 2015), the Court concluded that Anthony Blessum violated Rules 32:1.15(c) and 45.7(3) and (4) by withdrawing fees before performing the work and without providing his client with an accounting. 10

12 In Attorney Disciplinary Bd. v. Nelissen, 871 N.W.2d 694, 699 (Iowa 2015), the Court concluded that Alexandra Nelissen violated Rule 32:1.15(c) by withdrawing client funds that she had not yet earned. Fee Disputes In Attorney Disciplinary Bd. v. Rhinehart, 827 N.W.2d 169, (Iowa 2013), the Court concluded that Richard Rhinehart violated Rule 32:1.15(e) by withdrawing fees, which he knew the clients disputed, before resolving the dispute. The court rejected his explanation that he took the fees only after the clients refused to discuss the dispute with him. The clients' refusal to discuss the dispute with him did not resolve the dispute and entitle him to these fees. Rhinehart did not claim that he had taken steps to resolve the dispute, such as suggesting to the clients that they engage in arbitration or some other proceeding. Client Property & Files In Attorney Disciplinary Bd. v. Ries, 812 N.W.2d 594, (Iowa 2012), the Court: concluded that Roscoe Ries, Jr. violated Rule 32:1.15(d) by failing to promptly refund an inadvertent $500 overpayment by a client for work that Mr. Ries had done. In Attorney Disciplinary Bd. v. Mccarthy, 814 N.W.2d 596, (Iowa 2012), the Court: concluded that James Mccarthy violated Rules 32:1.15(a) and (c) by commingling unearned client funds with his own funds; the evidence established that he refunded the unearned portion of a retainer to a client by a personal check. The Court: concluded that Mr. Mccarthy violated Rules 32:1.15(d) and 32:1.16(d) by failing to promptly provide an accounting or a refund to a client who had paid a retainer but who later had discharged him. The Court concluded that Mr. Mccarthy violated Rules 32:1.15(f) and 45.7(4) by failing to provide a contemporaneous written notice of the time, amount, and purpose of the withdrawal to three clients when he withdrew their funds from the trust account. In Attorney Disciplinary Bd. v. Dolezal, 841 N.W.2d 114, 123 (Iowa 2013), the Court concluded that Kenneth Dolezal violated Rules 32:1.5(a) and 45.1 by failing to deposit client funds in a trust account; Mr. Dolezal admitted that he kept cash from a decedent's estate in a vault. The Court: rejected Mr. Dolezal's argument that his client did not want the estate funds deposited into a trust account. In Attorney Disciplinary Bd. v. Mendez, 855 N.W.2d 156, (Iowa 2014), the Court concluded that Richard Mendez violated Rules 32:1.15(d) and 32:1.16(d) by failing to promptly deliver a client's file to the client's new lawyer; the new lawyer received the file four months after requesting it and then only after filing a complaint with the disciplinary board. The Court also concluded that Mr. Mendez violated Rule 32:1.15(d) and (e) by delaying a client refund for seven months and by failing to retain the disputed funds from this client in the trust account. In Attorney Disciplinary Bd. v. Baldwin, 857 N.W.2d 195, (Iowa 2014), the Court concluded that Seth Baldwin violated Rules 32:1.15(d) and 32:1.1 6(d) by failing to return a file to a client after she discharged him, by failing to retain unearned fees in the trust account, by 11

13 failing to refund these unearned funds, and by failing to provide an accounting of the funds he had received. The Court rejected Mr. Baldwin's argument that he had a valid retaining lien under Iowa Code because the client did not owe him any fees or expenses when she discharged him. In fact, the client had overpaid him. In Attorney Disciplinary Bd. v. Nelissen, 871 N.W.2d 694, 699 (Iowa 2015), the Court concluded that Alexandra Nelissen violated Rule 32:1.15(a) by failing to deposit the $1000 balance of a client's special retainer in the trust account. Settlement Funds In Attorney Disciplinary Bd. v. Wengert, 790 N.W.2d 94, (Iowa 2010), the Court concluded that Patricia Wengert violated Rule 32:1.15 by failing to keep her client's funds separate from her own funds, by failing to place client settlement funds into a trust account, and by using client settlement funds for "other purposes", including paying the subrogation obligation of one client with funds belonging to another client. The Court concluded that Ms. Wengert violated Rules 45.1 and 45.2(2) by failing to place settlement funds into a trust account and to keep appropriate trust account records. The Court concluded that Ms. Wengert violated Rule 32:8.4(c) by falsely certifying that her trust account was properly reconciled and by misappropriating and failing to account for client settlement funds. Commingling of Client Funds with Lawyer Funds In Attorney Disciplinary Bd. v. Kersenbrock, 821 N.W.2d 415, 419 (Iowa 2012), the Court: concluded that Sara Kersenbrock violated Rule 32:1.15(c) by failing to deposit retainers from two clients into a trust account. In Attorney Disciplinary Bd. v. Clarity, 838 N.W.2d 648, (Iowa 2013), the Court concluded that James Clarity III violated Rules 32:1.15(c) and 45.7(3) by failing to deposit advance fees he received from three clients into a trust account. The Court concluded that Mr. Clarity violated Rules 45.2(2) and 45.7(4) by failing to promptly provide accounting statements when he withdrew funds from the trust account and when a client repeatedly requested an accounting. Proving Conversion & Proving a Colorable Future Claim In Attorney Disciplinary Bd. v. Thomas, 844 N.W.2d 111, (Iowa 2014), the Court concluded that Aaron Thomas converted client funds for his own use. The Board charged Mr. Thomas with theft by misappropriation, in violation of Iowa Code 714.1; the Court reiterated that it is not necessary for the lawyer to be charged with or convicted of a crime for it to consider whether the lawyer has committed a crime in the context of a disciplinary proceeding. The Court agreed that Mr. Thomas had no colorable claim to the client funds that he took. The Court concluded that Mr. Thomas violated Iowa Code and Rules 32:8.4(b) and (c) and 45.2(2). 12

14 In Attorney Disciplinary Bd. v. Carter, 847 N.W.2d 228, (Iowa 2014), the Court concluded that John Carter violated Rule 32:1.15(a) by converting client funds when he withdrew money from his trust account without a colorable future claim to the funds. The Court will revoke the license of a lawyer who misappropriates or converts client funds unless the lawyer has a colorable future claim to the funds or did not take the funds for personal use. The Court addressed the question whether the burden of proof shifts in any way for the lawyer to prove a colorable future claim. Comparing a professional misconduct proceeding with a criminal proceeding, the Court concluded that the lawyer "bears the burden of coming forward with evidence of a colorable future claim, but the burden to prove conversion remains with the Board." The Court noted that it has allowed the colorable future claim defense to extend to "the premature taking of a fee by an attorney in an amount greater than the actual fee ultimately earned." The premature taking of fees from a retainer fits within the scope of the colorable future claim defense. The funds held and converted by Mr. Carter from his trust account "were not held as a retainer or advance fee. They were funds of the estate that could only be used as attorney fees if approved by the court." Further, Mr. Carter "converted the funds at times that were inconsistent with an intent to take the funds as estate fees. The evidence further supported a finding that the amount of funds converted by Carter had no relationship to an amount that would be actually earned." In Attorney Disciplinary Bd. v. Crum, 861 N.W.2d 595, (Iowa 2015), the Court concluded that Machelle Crum violated Iowa Code by committing theft by misappropriation when she failed to refund retainers received from four clients for whom she did little, if any, work. She "knowingly retained client funds she had not earned and she has yet to return this property to its rightful owners despite repeated demands for their money and property to be returned." Managing Special Retainers (Advances for Fees & Expenses) In Attorney Disciplinary Bd. v. Dunahoo, 799 N.W.2d 524, (Iowa 2011), the Court concluded that Kermit Dunahoo violated Rules 32:1.15(f) and 45.7(4) by failing to provide any contemporaneous accounting or notice to clients when he withdrew their funds from the trust account. In Attorney Disciplinary Bd. v. Boles, 808 N.W.2d 431, (Iowa 2012), the Court concluded that Matthew Boles violated Rule 32:1.15(d) by failing to promptly refund unearned advance fees to his clients. Mr. Boles ignored numerous refund requests from one client before refunding $13,268 to him, 17 months later. Following three written requests, Boles refunded his unearned fees to another client four months after the client discharged him. The Court concluded that Mr. Boles violated Rule 32:1.15(c) by withdrawing fees from the trust account that he had not earned. 13

15 The Court: concluded that Mr. Boles violated Rule 32:1.15(e) by withdrawing, on two occasions, fees and expenses from the trust account, even though he knew that his client's wife claimed an interest in this retainer through a dissolution of marriage proceeding. In Attorney Disciplinary Bd. v. McCusky, 814 N.W.2d 250, 256 (Iowa 2012), the Court concluded that Thomas McCusky violated Rules 32:1.15, 45.2(2), and 45.7 when he accepted funds from his clients "on three different occasions, did not render an accounting to them when he took these funds into his own income, and did not refund any unearned portion of those fees relating to activity that occurred after his suspension took effect." In Attorney Disciplinary Bd. v. Kersenbrock, 821 N.W.2d 415, (Iowa 2012), the Court concluded that Sara Kersenbrock violated Rules 32:1.15(a) and (f) and 45.2(2) when the evidence established that she had failed to maintain a client list with the balance that each client had in the trust account, that she had failed to provide sufficient information to determine the source of many of the operating account deposits, and that she had failed to maintain a complete transaction register. In Attorney Disciplinary Bd. v. Kennedy, 837 N.W.2d 659, 672 (Iowa 2013), the Court concluded that Mary Kennedy violated Rule 45.7(4) by failing to notify her client that she was taking the special retainer she received. In Attorney Disciplinary Bd. v. Ricklefs, 844 N.W.2d 689, (Iowa 2014), the Court concluded that Ronald Ricklefs violated Rule 45.2(3)(a) by failing to maintain a check register or client ledgers, by failing to regularly perform reconciliations, and by failing to retain bank statements. In Attorney Disciplinary Bd. v. Mom's, 847 N.W.2d 428, (Iowa 2014), the Court concluded that William Morris violated Rule 45.2(3)(a) by failing "to comply with these clearly prescribed record-keeping and account-management requirements." The Court also concluded that Mr. Morris violated Rule 45.7(4); the Court based its conclusion on his acknowledgment that he ignored this Rule and his admission that he provided his clients with an accounting only if they requested it. in Attorney Disciplinary Bd. v. Bamhill, 847 N.W.2d 466, (Iowa 2014), the Court concluded that Kathryn Bamhill violated Rule 32:1.15(a) by failing to safeguard a client's money; the client had been using Ms. Barnhill's office to handle her business receipts and other income and to pay her business and personal bills. Ms. Barnhill's staff kept poor records of the money the client brought in, the staff did not pay all of the client's bills timely, and some of the client's money disappeared. The Court concluded that Ms. Barnhill violated Rule 45.2(2) by not being able to give this client a full accounting of the money paid into the trust account. The Court concluded that Ms. Barnhill violated Rule 45.2(3) by not keeping "complete records of the source, date, or amount of [the client's] income deposited into the trust account." She did not maintain a ledger of this client's funds, she did not maintain a running balance in the transaction register, and she did not reconcile the trust account bank statements. 14

16 In Attorney Disciplinary Bd. v. Mendez, 855 N.W.2d 156, 167 (Iowa 2014), the Court concluded that Richard Mendez violated Rules 32:1.15(c) and 45.10(2) by failing to deposit advance fee payments to the trust account for four clients. The Court concluded that he violated Rule 45.7(4) by failing to give notice to 45 clients when he withdrew funds from the trust account. In Attorney Disciplinary Bd. v. Kelsen, 855 N.W.2d 175, (Iowa 2014), the Court concluded that David Kelsen violated Rules 32:1.15(a) and (c) and 32:1.16(d) by failing to deposit several payments by a client to the trust account, by failing to keep this client's funds separate from his personal funds, and by failing to promptly refund the client's funds after the client discharged him. The Court concluded that Mr. Kelsen violated Rules 45.1(2), 45.2(3)(a), and 45.7(4) by failing to deposit client funds to the trust account, by withdrawing funds from the trust account that he had not earned, by failing to keep the required records, including receipt and disbursement journals and client ledgers, and by failing to give the contemporaneous written notice to the client when he withdrew funds from the trust account. In Attorney Disciplinary Bd. v. Baldwin, 857 N.W.2d 195, (Iowa 2014), the Court concluded that Seth Baldwin violated Rules 32:1.15(c) and (f), 45.7(3), and 45.10(3) by withdrawing funds from the trust account that he had not earned. The Court concluded that Mr. Baldwin violated Rules 32:1.15(f) and 45.7(4) by failing, on seven occasions, to provide the contemporaneous written notice and accounting to the client when he withdrew funds from the trust account. In Attorney Disciplinary Bd. v. Wright, 857 N.W.2d 510, (Iowa 2014), the Court concluded that Robert Wright, Jr. violated Rule 32:1.15(c) by withdrawing funds from the trust account after the Court suspended his law license. The Court concluded that Mr. Wright violated Rule 45.1 by depositing funds in the trust account after it suspended his license, by writing checks to third parties, by making cash withdrawals, and by running a deficit in the account. The Court concluded that Mr. Wright violated Rule 45.2(2) by failing to maintain any accounting of the funds in the trust account. The Court: concluded that Mr. Wright violated Rule 45.2(3)(b)(3) by withdrawing cash from the trust account. The Court concluded that Mr Wright violated Rule 45.7(4) by failing to provide the contemporaneous written notice and accounting to the client when he withdrew funds from the trust account. The Court concluded that Mr. Wright violated Rule 45.7(5) by collecting a fee for legal work performed while his license was suspended. In Attorney Disciplinary Bd. v. Eslick, 859 N.W.2d 198, (Iowa 2015), the Court concluded that Cam! Eslick violated Rule 32:1.15(b) by depositing personal funds, loan proceeds, into the trust account that were not deposited for the sole purpose of paying bank service charges. 15

17 The Court concluded that Ms. Eslick violated Rules 32:1.15(c) and (f) and 45.1 by failing to deposit advance fees into the trust account. The Court concluded that Ms. Eslick violated Rules 32:1.15(f) and 45.2(3)(a) by failing to maintain current financial records, including receipt and disbursement journals and ledger records, and by failing to perform monthly reconciliations. The Court concluded that Ms. Eslick violated Rules 32:1.15(f) and 45.7(3) and (4) by failing to deposit client funds into the trust account and by failing to notify clients when she withdrew funds from the trust account. In Attorney Disciplinary Bd. v. Cross, 861 N.W.2d 211, (Iowa 2015), the Court concluded that Michael Cross violated Rules 32:1.15(a) and (f) and 45.1(1) "by commingling personal and business funds with client funds." Mr. Cross admitted that he "used the trust account to pay personal and business expenses." The Court rejected Mr. Cross' excuses: "personnel, financial, and technological difficulties..." The Court concluded that Mr. Cross violated Rules 32:1.15(c) and (f) and 45.7(3) by failing to deposit advance fees into the trust account and by withdrawing fees and expenses before they were earned. Mr. Cross presented no documentation to support his claim that he had earned the fees. The Court would not revoke Mr. Cross' license, however, because the Board did not give him proper notice, which comported with due process, that he had stolen the retainer. The Court concluded that Mr. Cross violated Rules 45.2(3)(a) and 45.7(3) by failing to maintain proper financial records for the trust account and by failing to notify clients in writing and to provide them with a contemporaneous written accounting when he withdrew funds from the trust account. In Attorney Disciplinary Bd. v. Cepican, 861 N.W.2d 841, (Iowa 2015), the Court concluded that John Cepican violated Rule 32:1.15 and chapter 45 by misappropriating a client's special retainer. The Court would not revoke Mr. Cepican's license, however, because the Board did not give him proper notice, which comported with due process, that he had stolen the retainer. The Court reiterated that the defense of a colorable future claim to the client's advance payment "is established by evidence the attorney had a good-faith intent to perform the work even when the attorney failed to perform enough of the work to exhaust the retainer." The entry of a default judgment "against an attorney in the civil action over a retainer would not render the colorable-future-claim defense inapplicable in a subsequent disciplinary action." In Attorney Disciplinary Bd. v. Ryan, 863 N.W.2d 20, (Iowa 2015), the Court concluded that Vicki Ryan violated Rules 32:1.15(f) and 45.7(4) and (5) by failing to provide a contemporaneous written notice and accounting to the client when she withdrew funds from the trust account and by failing to refund unearned fees to the client. The Court would not revoke Ms. Ryan's license, however, because the Board did not give her proper notice, which comported with due process, that she had stolen the retainer. In Attorney Disciplinary Bd. v. Santiago, 869 N.W.2d 172, (Iowa 2015), the Court concluded that Frank Santiago violated Rules 32:1.15(c), 45.1, and 45.7(3) by failing to deposit some of his cash retainers into his trust account. The Court expressed concern about the 16

18 potential for income tax avoidance and about the loss of interest income from IOLTA accounts that the Court uses to fund programs to help the indigent. The Court concluded that Mr. Santiago violated Rules 32:1.15(a) and 45.2(3) by failing to keep proper trust account records and by not regularly reconciling his accounts. The Court concluded that he violated Rule 45.7(4) by not providing proper notices and accountings to his clients. The Court expressed concern that disregarding this requirement diminishes transparency between the lawyer and the client and diminishes public confidence in the judicial system. This Rule helps ensure that lawyers treat clients honestly and deal fairly with clients purchasing legal services." In Attorney Disciplinary Bd. v. Said, 869 N.W.2d 185, 193 (Iowa 2015), the Court concluded that Michael Said violated Rules 32:1.15(f), 45.2(2), and 45.7(4) by failing to properly account for the funds in the trust account and by failing to provide proper notices and accountings to his clients. In Attorney Disciplinary Bd. v. Lubinus, 869 N.W.2d 546, 549 (Iowa 2015), the Court concluded that Blake Lubinus violated Rules 32:1.15(a) by failing to deposit an advance fee into the trust account. The Court concluded that Mr. Lubinus violated Rules 32:1.15(c) and (f) and 45.7(3) by withdrawing funds from the trust account before he earned the fee. The Court concluded that Mr. Lubinus violated Rule 32:1.15(f) and 45.2(3)(a)(9) by failing to maintain accurate records of the trust account, including trial balances and monthly reconciliations. The Court concluded that Mr. Lubinus violated Rule 32:1.15(f) and 45.7(4) by failing to provide proper notices and accountings to his clients when he withdrew funds from the trust account. Client Trust Account Rules Rule Requirement for client trust account Funds a lawyer receives from clients or third persons for matters arising out of the practice of law in Iowa shall be deposited in one or more identifiable interest-bearing trust accounts located in Iowa. The trust account shall be clearly designated as "Trust Account." No funds belonging to the lawyer or law firm may be deposited in this account except: 1. Funds reasonably sufficient to pay or avoid imposition of fees and charges that are a lawyer's or law firm's responsibility, including fees and charges that are not "allowable monthly service charges" under the definition in rule 45.5, may be deposited in this account; or 2. Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited in this account, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally 17

19 resolved. Other property of clients or third persons shall be identified as such and appropriately safeguarded. Rule Action required upon receiving funds, accounting, and records (1) Authority to endorse or sign client's name. Upon receipt of funds or other property in which a client or third person has an interest, a lawyer shall not endorse or sign the client's name on any check, draft, security, or evidence of encumbrance or transfer of ownership of realty or personally, or any other document without the client's prior express authority. A lawyer signing an instrument in a representative capacity shall so indicate by initials or signature. (2) Accounting and returning funds or property. Except as stated in this chapter or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and shall promptly render a full accounting regarding such property. (3) Maintaining records. a. A lawyer who practices in this jurisdiction shall maintain current financial records as provided in these rules and required by Iowa R. of Profl Conduct 32:1.15 and shall retain the following records for a period of six years after termination of the representation: (1) Receipt and disbursement journals containing a record of deposits to and withdrawals from client trust accounts, specifically identifying the date, source, and description of each item deposited, as well as the date, payee and purpose of each disbursement; (2) Ledger records for all client trust accounts showing, for each separate trust client or beneficiary, the source of all funds deposited, the names of all persons for whom the funds are or were held, the amount of such funds, the descriptions and amounts of charges or withdrawals, and the names of all persons or entities to whom such funds were disbursed; (3) Copies of retainer and compensation agreements with clients as required by Iowa R. of Prof'l Conduct 32:1.5; (4) Copies of accountings to clients or third persons showing the disbursement of funds to them or on their behalf; (5) Copies of bills for legal fees and expenses rendered to clients; (6) Copies of records showing disbursements on behalf of clients; (7) The physical or electronic equivalents of all checkbook registers, bank statements, records of deposit, prenumbered canceled checks, and substitute checks provided by a financial institution; (8) Records of all electronic transfers from client trust accounts, including the name of the person authorizing transfer, the date of transfer, the name of the recipient, and the trust account name or number from which money is withdrawn; 18

20 (9) Copies of monthly trial balances and monthly reconciliations of the client trust accounts maintained by the lawyer; and (10) Copies of those portions of client files that are reasonably related to client trust account transactions. b. With respect to trust accounts required by Iowa R. of Prof'l Conduct 32:1.15: (1) Only a lawyer admitted to practice law in this jurisdiction or a person under the direct supervision of the lawyer shall be an authorized signatory or authorize transfers from a client trust account; (2) Receipts shall be deposited intact and records of deposit should be sufficiently detailed to identify each item; and (3) Withdrawals shall be made only by check payable to a named payee and not to cash, or by authorized bank transfer. c. Records required by this rule may be maintained by electronic, photographic, computer, or other media provided that the records otherwise comply with these rules and that printed copies can be produced. These records shall be accessible to the lawyer. d. Upon dissolution of a law firm or of any legal professional corporation, the partners shall make reasonable arrangements for the maintenance of the records specified in this rule. e. Upon the sale of a law practice, the seller shall make appropriate arrangements for the maintenance of the records specified in this rule. Rule 45.2 Caselaw In Attorney Disciplinary Bd. v. Nelissen, 871 N.W.2d 694, (Iowa 2015), the Court concluded that Alexandra Nelissen violated Rule 45.2(3) by failing to retain for six years billing and trust account records, by failing to make reasonable arrangements to retain those records from a dissolved partnership, and by failing to perform and retain monthly reconciliations of the trust account. The Court concluded that Ms. Nelissen also violated Rule 32:8.4(c) by misrepresenting on her annual client security report that she was performing monthly reconciliations of her trust account balances with bank statements. Rule 45.7: Advance fee and expense payments (1) Definition of advance fee payments. Advance fee payments are payments for contemplated services that are made to the lawyer prior to the lawyer's having earned the fee. (2) Definition of advance expense payments. Advance expense payments are payments for contemplated expenses in connection with the lawyer's services that are made to the lawyer prior to the incurrence of the expense. 19

21 (3) Deposit and withdrawal. A lawyer must deposit advance fee and expense payments from a client into the trust account and may withdraw such payments only as the fee is earned or the expense is incurred. (4) Notification upon withdrawal of fee or expense. A lawyer accepting advance fee or expense payments must notify the client in writing of the time, amount, and purpose of any withdrawal of the fee or expense, together with a complete accounting. The attorney must transmit such notice no later than the date of the withdrawal. (5) When refundable. Notwithstanding any contrary agreement between the lawyer and client, advance fee and expense payments are refundable to the client if the fee is not earned or the expense is not incurred. Rule 45.8: General retainer (1) Definition. A general retainer is a fee a lawyer charges for agreeing to provide legal services on an as-needed basis during a specified time period. Such a fee is not a payment for the performance of services and is earned by the lawyer when paid. (2) Deposit. Because a general retainer is earned by the lawyer when paid, the retainer should not be deposited in the trust account. Rule 45.9: Special retainer (1) Definition. A special retainer is a fee that is charged for the performance of contemplated services rather than for the lawyer's availability. Such a fee is paid in advance of performance of those services. unearned fees. (2) Prohibition. A lawyer may not charge a nonrefundable special retainer or withdraw Rule 45.9 Caselaw In Attorney Disciplinary Bd. v. Mendez, 855 N.W.2d 156, (Iowa 2014), the Court concluded that Richard Mendez violated Rules 32:1.15(c) and 45.7(5) by having a nonrefundable fee in his fee contract with two clients; the provision provided that he would receive $300 for opening the file even if he did not provide any legal services to the client. Rule Flat fee (1) Definition. A flat fee is one that embraces all services that a lawyer is to perform, whether the work be relatively simple or complex. (2) When deposit required. If the client makes an advance payment of a flat fee prior to performance of the services, the lawyer must deposit the fee into the trust account. (3) Withdrawal of flat fee. A lawyer and client may agree as to when, how, and in what proportion the lawyer may withdraw funds from an advance fee payment of a flat fee. The agreement, however, must reasonably protect the client's right to a refund of unearned fees if 20

22 the lawyer fails to complete the services or the client discharges the lawyer. In no event may the lawyer withdraw unearned fees. Rule Caselaw In Attorney Disciplinary Bd. v. Dolezal, 796 N.W.2d 910, (Iowa 2011), the Court concluded that Kenneth Dolezal violated numerous provisions of Rules 32:1.15 and 45.7 when he failed to deposit payments he received under a flat fee arrangement into the trust account and when he failed to provide an accounting to the client about his use of the funds. In Attorney Disciplinary Bd. v. Said, 869 N.W.2d 185, (Iowa 2015), the Court discussed the difficulty of applying the trust account Rules to flat fee arrangements. The Court noted that these difficulties "can be minimized by agreements that designate the times withdrawals will be made and transparent recordkeeping that justifies the withdrawal of fees." The Court emphasized "that the withdrawal of fees be done in a way that promotes trust and confidence in our legal system." The Court concluded that Mr. Said violated Rule 32:1.15(c) by making withdrawals from the advance payment of the flat fee deposited in the trust account before he earned the portion withdrawn. The fee-taking milestones in the written flat fee agreement that Mr. Said used did not fit with the nature of the case being handled. As a result, Mr. "Said periodically withdrew fees with no clear connection to any milestone in the case, any specific work performed, or any relationship to the services remaining to be performed." Sanctions for Trust Account Mismanagement In Attorney Disciplinary Bd. v. Lubinus, 869 N.W.2d 546, (Iowa 2015), the Court presented this review of the Court's thinking when it imposes a sanction on a lawyer with trust account issues: Consideration of Appropriate Sanction. In Grafting the appropriate sanction, we take into account "the nature of the violations, protection of the public, deterrence of similar misconduct by others, the lawyer's fitness to practice, and [the court's] duty to uphold the integrity of the profession in the eyes of the public." (citation omitted). "We consider mitigating and aggravating circumstances as we calibrate the sanction." (citation omitted). We also try to achieve consistency with prior cases, (citation omitted). Our sanctions for trust account violations have ranged from a public reprimand to license revocation, (citation omitted). For isolated and minor violations, we have generally decided a public reprimand was an appropriate sanction, (citation omitted). For example, in Iowa Supreme Court Attorney Disciplinary Board v. Piazza, we publicly reprimanded an attorney for failing to deposit an advance fee into his trust account and provide an accounting to his client in violation of our prior ethical rules, (citation omitted). In declining to impose a suspension, we took into account the attorney's lack of prior disciplinary history and the fact he had since reformed his accounting practices, (citation omitted). Similarly, in Iowa Supreme Court Attorney Disciplinary Board v. Denton, we publicly reprimanded an attorney who failed to deposit one client's advance fee into a trust account. (citation omitted). The attorney had only recently begun 21

23 to practice immigration law in Iowa and had not yet opened a trust account for legal fees. (citation omitted). In imposing a reprimand, we noted that he had no prior ethical violations and had since established a trust account to avoid future violations, (citation omitted). Likewise, when an attorney failed to provide written notice to a client upon withdrawing a retainer from a trust account, and also withdrew the retainer before it had been fully earned, we issued a public reprimand. (citation omitted). An attorney's commingling of his own funds and client funds in his trust account in order to hide assets from the Internal Revenue Service also warranted a public reprimand, (citation omitted). We noted the case presented a close call "at the precise boundary between suspension and public reprimand," but ultimately declined to impose a suspension due to the fact "th [e] episode [wa]s an aberration, wholly out of plumb with [the attomey]'s many years of practice which appear to have been honorable." (citation omitted). When an attorney's minor trust account violations are the result of sloppiness or lack of oversight, we have levied a public reprimand rather than a suspension. In Iowa Supreme Court Board of Professional Ethics & Conduct v. Apland, we characterized the attorney's failure to deposit an advance fee, provide an accounting, and respond to the ethics commission as the result of "lackadaisical bookkeeping practices" and imposed a public reprimand, (citation omitted). In Iowa Supreme Board of Professional Ethics & Conduct v. Herrera, we imposed a public reprimand on an attorney for commingling funds and failing to keep adequate records in violation of our prior ethical rules when an office employee was able to mismanage funds due to the attorney's lack of oversight, (citation omitted). We noted there was significant evidence that the office employee had intentionally mismanaged the attorney's funds because she resented him. (citation omitted). We also took into account the attorney's "honesty, his forthright responses, and his move to correct his operation" as mitigating factors weighing in favor of a public reprimand rather than a suspension, (citation omitted). On the other hand, when an attorney has committed multiple or more systematic trust account violations, we have imposed suspensions, often of thirty days. For example, in Iowa Supreme Court Attorney Disciplinary Board v. Boles, we imposed a thirty-day suspension for the attorney's "flagrant, multiyear disregard for the billing and accounting requirements of our profession." (citation omitted). The attorney had prematurely withdrawn fees, delayed giving accountings to his clients, and failed to promptly return unearned fees with respect to four separate clients. (citation omitted). We noted the "pattern of misconduct" as an aggravating factor, but also considered the attorney's cooperation with the Board, reform of his accounting practices, and extensive volunteer work as mitigating factors, (citation omitted). We also levied a thirty-day suspension on an attorney whose conduct demonstrated a "systematic failure to maintain adequate accounting records." (citation omitted). An audit had revealed the attorney "failed to keep on any kind of a regular basis a list of clients with the balances that each client had in their trust account." (citation omitted). We took into account that the attorney had no prior disciplinary history and no clients were harmed, but noted that because the attorney kept no records, "we have no way of knowing whether the trust account 22