It is usually easy for attorneys to identify when they have breached the Rules of Professional Conduct. For example, they cannot ignore a client’s matter or misuse money held in trust. However, some breaches are more subtle, while others are clear but less familiar to the Bar. One of the latter breaches involves the title of an attorney’s escrow/IOLA account and related documents.
Rule 1.15 (b) (2) of the Rules of Professional Conduct (22 NYCRR § 1200) requires that the title of an attorney’s escrow/IOLA account include one of these terms: “Attorney Special Account,” “Attorney Trust Account,” Attorney Escrow Account.” These terms must appear on the bank statements, checks, and deposit slips for the account.
Leaving out these terms violates rule 1.15 (b) (2), even if an attorney uses language that clearly indicates the account. For instance, the titles “John Smith Esq., IOLA Account,” Jane Smith Esq., Escrow Account,” and “The Law Firm of John Doe, Attorney IOLA Account,” do not comply with rule 1.15 (b) (2). Also, if an attorney’s escrow account statements have the correct terms, but checks or deposit slips do not, there is still a violation.
An attorney’s bank may be unaware of this rule, and allow the attorney to title the account with whatever language they like. It is important for attorneys to name their escrow accounts properly to avoid a negative outcome.