Since time immemorial, it seems, the Missouri Office of the Chief Disciplinary Counsel’s annual report of disciplinary complaints has listed Rule 4-1.4 (Communication), and 4-1.3 (Diligence) as the top two most cited rules violated. However, in 2010 there was a new second place finisher, Rule 4-1.15 – Safekeeping Property. The OCDC’s 2010 annual report now lists the most common complaint areas as:
4-1.4 (Communication) – 375 reports
4-1.15 (Safekeeping Property) – 341 reports
4-1.3 (Diligence) - 314 reports
Rule 4-1.15(b)(1) now requires financial institutions to agree “[t]o report to the chief disciplinary counsel whenever any properly payable instrument or other debit is presented against a lawyer's client trust account containing insufficient funds, irrespective of whether or not the instrument or debit is honored.”
According to the OCDC’s 2010 Annual Report, overdraft reporting accounted for 281 of the reports under the rule. These reports of trust account overdrafts resulted in 29 admonitions and 26 formal disciplines. The remaining complaints were described in the report as involving “negligent or careless management of trust accounts” which were addressed by “education and follow-up monitoring without discipline.”
As noted by Nancy L. Ripperger, Staff Counsel, Office of Chief Disciplinary Counsel:
The CDC predicted most overdrafts would occur because of lack of adequate practices and procedures upon the part of the attorney. These poor practices and procedures would include: (a) failing to reconcile the trust account on a regular basis resulting in errors going undetected; (b) disbursing settlement funds before the deposited settlement funds were available for withdrawal; (c) failing to keep adequate funds in the account to cover service charges; and (d) commingling client and attorneys funds without adequate records as to the source of the funds.