WSR 19-23-017

RULES OF COURT

STATE SUPREME COURT

[November 6, 2019]

The Washington State Bar Association Board of Governors, having recommended the suggested amendments to RPC 1.15A (h)(9)—Safeguarding Property and LLLT RPC 1.15A (h)(9)—Safeguarding Property, and the Court having approved the suggested amendments for publication;

Now, therefore, it is hereby

(A) That pursuant to the provisions of GR 9(g), the suggested amendments as shown below are to be published for comment in the Washington Reports, Washington Register, Washington State Bar Association and Administrative Office of the Court's websites in January 2020.

(b) The purpose statement as required by GR 9(e), is published solely for the information of the Bench, Bar and other interested parties.

(c) Comments are to be submitted to the Clerk of the Supreme Court by either U.S. Mail or Internet E-Mail by no later than April 30, 2020. Comments may be sent to the following addresses: P.O. Box 40929, Olympia, Washington 98504-0929, or supreme@courts.wa.gov. Comments submitted by e-mail message must be limited to 1500 words.

dated at Olympia, Washington this 6th day of November, 2013.

A. Proponent: Washington State Bar Association, Board of Governors, Committee on Professional Ethics

Terra Nevitt, Interim Executive Director, Washington State Bar Association, 1325 4th Avenue, Suite 600, Seattle, WA 98101-2539

Jeanne Marie Clavere, Professional Responsibility Counsel, Washington State Bar Association, 1325 4th Avenue, Suite 600, Seattle, WA 98101-2539

The purpose of the suggested amendment to RPC 1.15A (h)(9) is to address the limitation of who can be a signatory on a lawyer trust account. While RPC 1.15A (h)(9) permits an LLLT to be a signatory, the second sentence of the rule states: "If a lawyer is associated in a practice with one or more LLLT's, any check or other instrument requiring a signature must be signed by a signatory lawyer in the firm." The amendment would strike that sentence, thereby permitting an LLLT to be a signatory on a law firm's trust account without restrictions.

Prior to the 2006 RPC amendments, anyone could be a signatory on a trust account without restrictions, and law firms frequently included bookkeepers or other nonlawyer staff as signatories. The Ethics 2003 Committee proposed that RPC 1.15A only permit lawyers to be signatories to protect against theft by nonlawyers employed at law firms, and this change was made to the RPC. The rule was later amended to permit LLLTs to be signatories with the limitation noted above.

The requirement for a second signature by a lawyer on any instrument signed by an LLLT is not necessary and unduly limits an LLLT's ability to disburse funds from a trust account. Unlike nonlaywers, LLLTs are licensed legal professionals who are subject to discipline. The current rule makes it more difficult for an LLLT to disburse funds to the LLLT's own clients because the LLLT must obtain the signature of a lawyer on the check. At small firms, the LLLT's clients may be unnecessarily delayed in receiving checks if the firm's sole lawyer is out of the office and unable to authorize the check.

In addition, an LLLT who is not associated in a practice with a lawyer is authorized to sign trust account checks alone, while an LLLT who is associated in a practice with one or more lawyers would not be permitted to do so as the rule is currently written.

In February 2019, the LLLT Board approved a suggested amendment to the LLLT RPC that exactly parallels the suggested amendment to the Lawyer RPC. The LLLT Board is forwarding its suggested amendment to the Court in conjunction with this suggested amendment.

D. Hearing: A hearing is not requested.

E. Expedited Consideration: Expedited consideration is not requested.

F. Supporting Material: Suggested Rule Amendment to RPC 1.15A

(a) - (g) Unchanged.

(h) A lawyer must comply with the following for all trust accounts:

(1) - (8) Unchanged.

(9) Only a lawyer admitted to practice law or an LLLT may be an authorized signatory on the account. If a lawyer is associated in a practice with one or more LLLT's, any check or other instrument requiring a signature must be signed by a signatory lawyer in the firm.

Limited License Legal Technician (LLLT) Board

Staff Liaison/Contact:

Renata de Carvalho Garcia, Innovative Licensing Programs Manager

Washington State Bar Association (WSBA)

1325 Fourth Avenue, Suite 600

Seattle, WA 98101-2539 (Phone: 206-733-5912)

Stephen R. Crossland

Chair of the LLLT Board

P.O. Box 566

Cashmere, WA 98815 (Phone: 509-782-4418)

The suggested amendment to LLLT RPC 1.15A (h)(9) parallels and is presented in conjunction with the suggested amendment to Lawyer RPC 1.15A (h)(9). The purpose of the suggested amendment is to address the limitation of who can be a signatory on an LLLT client trust account. LLLT RPC 1.15 (h)(9) permits an LLLT to be a trust account signatory. ("Only an LLLT or lawyer admitted to practice law may be an authorized signatory on the account.") That is only true, however, if an LLLT is not associated in practice with a lawyer, as established in the following sentence of the rule: "If an LLLT is associated in a practice with one or more lawyers, any check or other instrument requiring a signature must be signed by a signatory lawyer in the firm." The suggested amendment seeks to strike this sentence and consequently eliminate the restriction that an LLLT who is associated in a practice with one or more lawyers cannot sign trust account checks.

LLLTs are licensed legal professionals authorized to disburse funds from their client trust accounts. Like lawyers, LLLTs are subject to discipline for mishandling trust account funds and should, therefore, not be held to a different standard for disbursing funds. Furthermore, a requirement that a lawyer authorize disbursement when a LLLT is in practice with one or more lawyers unduly limits an LLLT's ability and duty to disburse funds from a client trust account in a timely manner. The current rule makes it more difficult for an LLLT to disburse funds to an LLLT's own clients because the LLLT must obtain the signature of a lawyer. At small law firms, for example, the LLLT's clients may be unnecessarily delayed in receiving funds if the firm's sole lawyer is out of the office or otherwise unable to authorize disbursement. This suggested amendment gives LLLT the responsibility they already have without that limitation.

Finally, considering the change will also impact the Lawyer RPC, it is important to note that the Committee on Professional Ethics and the LLLT Board have been coordinating their efforts in regards to this amendment. The suggested amendment to LLLT RPC LLLT RPC 1.15A (h)(9) was approved by the LLLT Board at its February 2019 meeting. The parallel suggested amendment to Lawyer RPC 1.15A (h)(9) was approved by the Board of Governors at its July 2019 meeting. Both suggested amendments are being submitted simultaneously to the Court.

D. Hearing: A hearing is not requested.

E. Expedited Consideration: Expedited consideration is not requested.

F. Supporting Materials: Suggested Rule Amendment to LLLT RPC 1.15A (h)(9).

(a) - (g) Unchanged.

(h) An LLLT must comply with the following for all trust accounts:

(1) - (8) Unchanged.

(9) Only an LLLT or a lawyer admitted to practice law may be an authorized signatory on the account. If an LLLT is associated in a practice with one or more lawyers, any check or other instrument requiring a signature must be signed by a signatory lawyer in the firm.