Supreme Court of Missouri
en banc

 
In re:
 
(1) Repeal of subdivision 2-2.2, entitled "Impartiality and Fairness," of Rule 2, entitled "Code of Judicial Conduct," and in lieu thereof adoption of a new subdivision 2­2.2, entitled "Impartiality and Fairness."

(2) Repeal of subdivision 4-1.15, entitled "Safekeeping Property," of Rule 4, entitled "Rules of Professional Conduct" and the Comment and Supplemental Missouri Comment thereto, and in lieu thereof adoption of a new subdivision 4-1.145, entitled "Definitions - Safekeeping Property and IOLTA Accounts;" a new subdivision 4-1.15, entitled , "Safekeeping Property" and a new Comment thereto; a new subdivision 4-1.155, entitled "IOLTA Accounts" and a new Comment thereto; and a new subdivision 4-1.22, entitled "File Retention."
 
1.   It is ordered that effective July 1, 2013, subdivision 2-2.2 of Rule 2 be and the same is hereby repealed and a new subdivision 2-2.2 adopted in lieu thereof to read as follows:

2-2.2 IMPARTIALITY AND FAIRNESS
 
(A) A judge shall uphold and apply the law, and shall perform all duties of judicial office promptly, efficiently, fairly and impartially.
 
(B) A judge may make reasonable efforts, consistent with the law and court rules, to facilitate all litigants, including self-represented litigants, being fairly heard.

 

2.  It is ordered that effective July 1, 2013, subdivision 4-1.15 of Rule 4 and the Comment and Supplemental Comment thereto be and the same are hereby repealed and a new subdivision 4-1.145; a new subdivision 4-1.15 and a new Comment thereto; a new subdivision 4-1.155 and a new Comment thereto; and a new subdivision 4-1.22 adopted in lieu thereof to read as follows:

4-1.145 DEFINITIONS - SAFEKEEPING PROPERTY AND IOLTA ACCOUNTS

(a) As used in Rules 4-1.145 to 4-1.155, the following terms mean:
 
 
(1) "Allowable reasonable fees," per check charges, per deposit charges, a fee in lieu of minimum balance, sweep fees, and a reasonable IOLTA account administrative fee calculated in accordance with an eligible institution's standard practice for non-IOLTA customers.
 
(2) "Approved institution,"
 
 
(A) an eligible institution in which an IOLTA account or a non-IOLTA trust account is held, or
 
(B) a financial institution in which an exempt trust account is held that has been approved by the advisory committee pursuant to regulations adopted by the advisory committee and approved by this Court.
 
(3) "Client trust account," an account denominated as such or by words of similar import in which a lawyer or law firm holds funds on behalf of a client or third person and on which withdrawals or transfers can be made on demand, subject only to any notice period that the financial institution is required to observe by law or regulation.  Every client trust account shall be either an IOLTA account, a non-IOLTA trust account, or an exempt trust account.
 
(4) "Daily overnight financial institution repurchase agreement," an agreement established only with an institution that is deemed to be "well capitalized" or "adequately capitalized" as defined by applicable federal statutes and regulations.
 
(5) "Eligible institution," one of the following entities choosing to offer and maintain IOLTA accounts to its lawyer and law firm customers:
 
(A) a bank or savings and loan association, authorized by federal or state law to do business in Missouri, the deposits of which are insured by an agency of the federal government, or
 
(B) an open-end investment company registered with the Securities and Exchange Commission authorized by federal or state law to do business in Missouri.  
 
To be an "eligible institution," the foundation also must determine that the institution:
 
(A) pays no less on IOLTA accounts than the lesser of:
 
(i) the highest interest rate or dividend generally available from the institution to its non-IOLTA customers for each IOLTA account that meets the same minimum balance or other eligibility qualifications, if any.  In determining the highest interest rate or dividend generally available from the institution to its non-IOLTA customers, the institution may consider factors, in addition to the IOLTA account balance, customarily considered by the institution when setting interest rates or dividends for its customers if such factors do not discriminate between IOLTA accounts and accounts of non-IOLTA customers and these factors do not include that the account is an IOLTA account.  The institution also shall consider all product option types for an IOLTA account offered by the financial institution to its non-IOLTA customers by either using the available account option as an IOLTA account or paying the comparable interest rate or dividend on the IOLTA checking account in lieu of actually establishing the comparable highest interest rate or dividend product; or
 
(ii) an amount on funds that would otherwise qualify for the investment options noted at Rule 4-1.145(a)(9)(B) to (D) equal to the greater of 60% of the federal funds target rate as of the first business day of the quarter or other IOLTA remitting period or 0.60%, which amount is deemed to be already net of allowable reasonable fees;
 
(B) only deducts allowable reasonable fees from the interest or dividends on an IOLTA account;
 
(C) remits at an established IOLTA remitting period the interest or dividends earned on each IOLTA account, net of allowable reasonable fees, if any, to the foundation, which shall be the sole beneficial owner of the interest or dividends earned on the IOLTA account;
 
(D) transmits with each remittance a report, on a form and through any manner of transmission approved by the foundation, that identifies each lawyer or law firm for whose IOLTA account the remittance is sent, the amount of the remittance attributable to each IOLTA account, the rate and type of interest or dividends applied, the amount of interest or dividends remitted, the amount and type of charges or fees deducted, if any, and the average account balance for the period in which the report is made; and
 
(E) transmits to the depositing lawyer a report in accordance with normal procedures for reporting to its depositors.
 
(6) "Exempt trust account," an account maintained by a lawyer or law firm whom the foundation, for the current reporting period, exempts from the requirement of maintaining an IOLTA account because the lawyer:
 
(A) maintains an IOLTA account that has not and cannot reasonably be expected to produce interest or dividends in excess of allowable reasonable fees; or
 
(B) establishes that no eligible institution within reasonable proximity to his, her, or its office offers IOLTA accounts.
 
The foundation may establish criteria and procedures by which an exemption under Rule 4-1.145(a)(6) may be obtained.
 
An exempt account shall be non-interest-bearing, except that such accounts shall be interest-bearing if funds held for particular clients or matters warrant one or more non-IOLTA trust accounts.
 
(7) "Financial institution," a bank or savings and loan association authorized by federal or state law to do business in Missouri the deposits of which are insured by an agency of the federal government.
 
(8) "Foundation," the Missouri lawyer trust account foundation described in this Court's order of October 23, 1984.
 
(9) "IOLTA account," a pooled client trust account held at an eligible and approved institution that is comprised of client and third person funds that cannot otherwise earn income for the client or third person in excess of the costs incurred to secure such income, and which is:
 
(A) an interest-bearing checking account;
 
(B) a money market account with or tied to check-writing;
 
(C) a sweep account that is a government money market fund or daily overnight financial institution repurchase agreement invested solely in or fully collateralized by United States government securities; or
 
(D) an open-end money market fund solely invested in or fully collateralized by United States government securities.
 
(10) "Non-IOLTA customers" includes all of the customers of the financial institution other than those who maintain IOLTA accounts.
 
(11) "Non-IOLTA trust account," an interest-bearing client trust account established at an approved financial institution as:
 
(A) a separate client trust account for the deposit of the funds of a particular client or third person, the net earnings of which will be paid to the client or third person who owns the deposited funds; or
 
(B) a pooled trust account with sub accounting by the financial institution or by the lawyer or law firm that will provide for computation of the net interest or dividend earned by the funds of each client or third person and also will provide for the payment thereof to the client or third person.
 
(12) "Open-end money market fund," a fund holding itself out as a money market fund as defined by applicable federal statutes and regulations under the Investment Act of 1940 and, at the time of the investment, having total assets of at least $250,000.000.
 
(13) "United States government securities," United States treasury obligations and obligations issued or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof.

4-1.15 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.  Client or third party funds shall be kept in a separate account designated as a "Client Trust Account" or words of similar import maintained in the state where the lawyer's office is situated or elsewhere if the client or third person consents.
 
(1) Every client trust account shall be either an IOLTA account, non-IOLTA trust account, or exempt trust account.  No earnings from an IOLTA account, a non-IOLTA trust account, or exempt trust account shall be made available to any lawyer or law firm, nor shall any lawyer or law firm have a right or claim to such earnings.  Other property shall be identified as such and appropriately safeguarded.
 
(2) A client trust account, whether IOLTA, non-IOLTA, or exempt must be in an approved institution.  Every lawyer practicing or admitted to practice in this jurisdiction, as a condition thereof, shall be conclusively deemed to have consented to the overdraft reporting and production requirements mandated by the regulations adopted by the advisory committee.
 
(3) 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;
 
(4) Receipts shall be deposited intact and records of deposit shall be sufficiently detailed to identify each item;
 
(5) Withdrawals shall be made only by check payable to a named payee, and not to cash, or by authorized electronic transfer; and
 
(6) No disbursement shall be made based upon a deposit:
 
(A) if the lawyer has reasonable cause to believe the funds have not actually been collected by the financial institution in which the trust account is held; and
 
(B) until a reasonable period of time has passed for the funds to be actually collected by the financial institution in which the trust account is held.
 
(7) A reconciliation of the account shall be performed reasonably promptly each time an official statement from the financial institution is provided or available.
 
(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 provided in Rules 4-1.145 to 4-1.155 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 lawyer shall keep the property separate until the dispute is resolved.  The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.  Lawyers shall cooperate as necessary to enable distribution of funds that are not in dispute.
 
(f) Complete records of client trust accounts shall be maintained and preserved for a period of at least five years after termination of the representation or after the date of the last disbursement of funds, whichever is later.
 
Records may be maintained by electronic, photographic, or other media provided that they otherwise comply with Rules 4-1.145 to 4-1.155 and that printed copies can be produced.  These records shall be readily accessible to the lawyer.
 
Upon dissolution of a law firm or of any legal professional corporation, the partners shall make reasonable arrangements for the maintenance of client trust account records.  Upon the sale of a law practice, the seller shall make reasonable arrangements for the maintenance of records.
 
Complete records shall include at a minimum:
 
(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) fee agreements, engagement letters, retainer agreements and compensation agreements with clients;
 
(4) accountings to clients or third persons showing the disbursement of funds to them or on their behalf;
 
(5) bills for legal fees and expenses rendered to clients;
 
(6) records showing disbursements on behalf of clients;
 
(7) the physical or electronic equivalents of all checkbook registers, bank statements, records of deposit, pre-numbered 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 confirmation from the financial institution of the trust account number from which money was withdrawn and the date and the time the transfer was completed;
 
(9) reconciliations of the client trust accounts maintained by the lawyer;
 
(10) those portions of client files that are reasonably related to client trust account transactions; and
 
(11) records of credit card transactions with clients to the extent permitted by law and the payment card industry data security standard.
 
(g) Unless exempt as provided in Rule 4-1.145(a)(6) or all of the lawyer's trust accounts are non-IOLTA trust accounts, a lawyer or law firm shall establish and maintain one or more IOLTA accounts into which shall be deposited all funds of clients or third persons in compliance with the provisions in Rules 4-1.145 to 4-1.155.
 
(h) Every lawyer shall certify in connection with this Court's annual enrollment statement the financial institutions in which the lawyer has one or more trust accounts and that the lawyer or the law firm with which the lawyer is associated either maintains an IOLTA account with an eligible and approved institution or is exempt because the:
 
(1) lawyer is not engaged in the practice of law;
 
(2) nature of the lawyer's or law firm's practice is such that the lawyer or law firm does not hold client or third party funds;
 
(3) lawyer is primarily engaged in the practice of law in another jurisdiction and not regularly engaged in the practice of law in this state;
 
(4) lawyer is associated in a law firm with at least one lawyer who is admitted to practice and maintains an office in a jurisdiction other than the state of Missouri and the lawyer or law firm maintains a pooled trust account for the deposit of funds of clients or third persons in a financial institution located in such other jurisdiction and any interest or dividends, net of any service charges and fees, from the account is being remitted to the client or third person who owns the funds or to a nonprofit organization or government agency pursuant to the laws or rules governing lawyer conduct of the jurisdiction in which the financial institution is located; or
 
(5) The lawyer maintains an exempt account.
 
Comment
 
[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.
 
[2] Rules 4-1.15(a)(3) to (7) enumerate minimal accounting controls for client trust accounts.  It also enunciates the requirement that only a lawyer admitted to the practice of law in the jurisdiction or a person who is under the direct supervision of the lawyer shall be the authorized signatory or authorize electronic transfers from a client trust account.  While it is permissible to grant limited nonlawyer access to a client trust account, such access should be limited and closely monitored by the lawyer.  The lawyer has a non-delegable duty to protect and preserve the funds in a client trust account and can be disciplined for failure to supervise subordinates who misappropriate client funds.  See Rules 4-5.1 and 4-5.3.
 
[3] Authorized electronic transfers shall be limited to:
 
(1) money required for payment to a client or third person on behalf of a client;
 
(2) expenses properly incurred on behalf of a client, such as filing fees or payment to third persons for services rendered in connection with the representation; or
 
(3) money transferred to the lawyer for fees that are earned in connection with the representation and are not in dispute; or
 
(4) money transferred from one client trust account to another client trust account.
 
[4] The requirements in Rule 4-1.15(a)(4) that receipts shall be deposited intact mean that a lawyer cannot deposit one check or negotiable instrument into two or more accounts at the same time, a practice commonly known as a split deposit.
 
[5] Rule 4-1.15(a)(6) establishes that a lawyer must wait a reasonable period of time for deposited funds to be collected by the financial institution in which the trust account is located before disbursing funds on that deposit.  This is often referred to as the deposit being "good funds."  It is not sufficient to wait only until the deposit is "cleared" or "available" according to financial institution records.  In either of those situations, the transaction may be reversed by the financial institution if a problem arises.  The amount of time that is reasonable to wait may vary from one financial institution to another, depending on the financial institution's processing method.  A lawyer must also delay disbursement and take extra measures to ensure collection before disbursement if the lawyer is aware of information that causes doubt about the collection or collectability of the deposit.
 
[6] While normally it is impermissible to commingle the lawyer's own funds with client funds, Rule 4-1.15(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.
 
[7] 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.
 
[8] Rule 4-l.l5(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, the lawyer may file an action to have a court resolve the dispute.
 
[9] The obligations of a lawyer under Rules 4-1.145 to 4-1.155 are independent of those arising from activity other than rendering legal services.  For example, a lawyer who serves only as an escrow agent is governed by the applicable law relating to fiduciaries even though the lawyer does not render legal services in the transaction and is not governed by these Rules 4-1.145 to 4-1.155.
 
[10] A lawyers' fund for client protection provides a means through the collective efforts of the bar to reimburse persons who have lost money or property as a result of dishonest conduct of a lawyer.  Where such a fund has been established, a lawyer must participate where it is mandatory, and, even when it is voluntary, the lawyer should participate.
 
[11] The basic financial records that a lawyer must maintain with regard to all trust accounts of a law firm include the standard books of account and the supporting records that are necessary to safeguard and account for the receipt and disbursement of client or third person funds.
 
[12] Regardless of the arrangements the partners or shareholders make among themselves for maintenance of the client trust records, each partner maybe held responsible for ensuring the availability of these records.
 
[13] Alternative media for the maintenance of client trust account records may be used if printed copies of necessary reports can be produced.  If trust records are computerized, a system of regular and frequent (preferably daily) back-up procedures is essential.  If a lawyer uses third-party electronic or internet based file storage, the lawyer must make reasonable efforts to ensure that the company has in place, or will establish reasonable procedures, to protect the confidentiality of client information.  See ABA Formal Ethics Opinion 398 (1995).  Required records shall be readily accessible and shall be readily available to be produced upon request by the client or third person who has an interest as provided in Rule 4-1.15 or by the official request of a disciplinary authority, including but not limited to, a demand under Rule 4-8.1 or a subpoena duces tecum.  Personally identifying information in records produced upon request by the client or third person or by disciplinary authority may be the appropriate subject of a protective order.
 
[14] Rule 5.26 provides for the appointment of a trustee to handle the storage or disposition of a lawyer's client trust account records in the event that the lawyer is suspended, disbarred, disappears, or dies.
 
[15] The physical or electronic equivalents of all checkbook registers, bank statements, records of deposit, pre-numbered canceled checks, and substitute checks must be maintained for a period of five years after termination of each legal engagement or representation. The "Check Clearing for the 21st Century Act" or "Check 21 Act", codified at 12 U.S.C. §§5001 et. seq., recognizes "substitute checks" as the legal equivalent of an original check.  A "substitute check" is defined at 12 U.S.C. §5002(16) as "paper reproduction of the original check that contains an image of the front and back of the original check; bears a magnetic ink character recognition ("MICR") line containing all the information appearing on the MICR line of the original check; conforms with generally applicable industry standards for substitute checks; and is suitable for automated processing in the same manner as the original check.  "Banks," as defined in 12 U.S.C. §5002(2), are not required to return to customers the original canceled checks.  Most banks now provide electronic images of checks to customers who have access to their accounts on internet-based websites.  It is the lawyer's responsibility to download electronic images.  Electronic images shall be maintained for the requisite number of years and shall be readily available for printing upon request or shall be printed and maintained for the requisite number of years.
 
[16] The ACH (Automated Clearing House) Network is an electronic funds transfer or payment system that primarily provides for the inter-bank clearing of electronic payments between originating and receiving participating financial institutions.  ACH transactions are payment instructions to either debit or credit a deposit account.  ACH payments are used in a variety of payment environments including bill payments, business-to-business payments, and government payments (e.g., tax refunds.)  In addition to the primary use of ACH transactions, retailers and third parties use the ACH system for other types of transactions, including electronic check conversion (ECC).  ECC is the process of transmitting MICR information from the bottom of a check, converting check payments to ACH transactions depending upon the authorization given by the account holder at the point-of-purchase.  In this type of transaction, the lawyer should be careful to comply with the requirements to maintain documentation of the transaction.
 
[17] There are five types of check conversions where a lawyer should be particularly careful to maintain good documentation.  First, in a "point-of-purchase conversion," a paper check is converted into a debit at the point of purchase and the paper check is returned to the issuer.  Second, in a "back-office conversion," a paper check is presented at the point of purchase and is later converted into a debit and the paper check is destroyed.  Third, in an "account-receivable conversion," a paper check is converted into a debit and the paper check is destroyed.  Fourth, in a "telephone-initiated debit" or "check-by-phone" conversion, bank account information is provided via the telephone and the information is converted to a debit.  Fifth, in a "web-initiated debit," an electronic payment is initiated through a secure web environment.  The need for complete documentation applies to each of the type of electronic funds transfers described.  All electronic funds transfers shall be recorded and a lawyer should not re-use a check number that has been used previously in an electronic transfer transaction.
 
[18] The potential of these records to serve as safeguards is realized only if reconciliations are regularly performed.  Reconciliation each time a statement is generated by the financial institution will enable the easiest identification of an error (whether by the lawyer or the bank).
 
[19] In some situations, documentation in addition to that specified in this Rule 4-1.15 is necessary for a complete understanding of a trust account transaction.  The type of document that a lawyer must retain because it is "reasonably related" to a client trust account transaction will vary depending on the nature of the transaction and the significance of the document in shedding light on the transaction.  Examples of documents that typically must be retained under this Comment [19] include correspondence between the client and lawyer relating to a disagreement over fees or costs or the distribution of proceeds, settlement agreements contemplating payment of funds, settlement statements issued to the client, documentation relating to sharing litigation costs and attorney fees for subrogated claims, agreements for division of fees between lawyers, guarantees of payment to third parties out of proceeds recovered on behalf of a client, and copies of bills, receipts or correspondence related to any payments to third parties on behalf of a client (whether made from the client's funds or from the lawyer's funds advanced for the benefit of the client).


4-1.155 IOLTA ACCOUNTS
 
(a) IOLTA accounts shall be maintained in compliance with the following provisions:
 
(1) no earnings from such account shall be made available to the lawyer or law firm, and the lawyer or law firm shall have no right or claim to such earnings;
 
(2) a lawyer or law firm shall deposit in an IOLTA account all funds of clients and third persons from whom no income could be earned for the client or third person in excess of the costs incurred to secure such income, and all other client or third person funds shall be deposited into a non-IOLTA trust account;
 
(3) in determining whether client or third person funds should be deposited in an IOLTA account or non-IOLTA trust account, a lawyer shall take into consideration the following factors: .
 
(A) the amount of interest that the funds would earn during the period they are expected to be deposited;
 
(B) the cost of establishing and administering a non­IOLTA trust account for the benefit of the client or third person, including the cost of the lawyer's services and the cost of preparing any tax reports required for interest accruing to the benefit of a client or third person;
 
(C) the capability of financial institutions or lawyers or law firms to calculate and pay interest to individual clients or third persons;
 
(D) any other circumstance that affects the ability of the client or third person funds to earn income in excess of the costs incurred to secure such income for the client or third person;
 
(4) the determination of whether the funds of a client or third person can earn income in excess of costs as provided in Rule 4-1.155(c)(3) shall rest in the sound judgment of the lawyer or law firm, and no lawyer shall be charged with an ethical impropriety or breach of professional conduct based on the good faith exercise of such judgment;
 
(5) the lawyer or law firm shall review the account at reasonable intervals to determine if changed circumstances require further action with respect to the funds of any client or third person; and
 
(6) a lawyer or law firm required to establish and maintain an IOLTA account under Rules 4-1.145 to 4-1.155 shall maintain IOLTA accounts only at an approved and eligible institution that voluntarily chooses to offer such accounts.
 
(b) Allowable reasonable fees may be deducted from interest or dividends earned on an IOLTA account.  Fees or charges in excess of the interest or dividends earned on the IOLTA account, for any month or quarter, shall not be taken from interest or dividends of any other IOLTA account.  No fees or charges may be assessed against or deducted from the principal of any IOLTA account.  All other fees are the responsibility of the lawyer or law firm and may be charged to the lawyer or law firm.  Eligible institutions may elect to waive any or all fees on IOLTA accounts.
 
(c) The advisory committee may refuse to approve a financial institution and may revoke approval as provided in the regulations approved by this Court.
 
(1) any financial institution that is refused approval by the advisory committee may petition this Court, within 30 days of receiving notice of the action, for review of the advisory committee's decision.  This Court may direct that the issues raised in the petition be briefed and argued as though a petition for an original remedial writ has been sustained.  This Court may sustain, modify, or vacate the action of the advisory committee or dismiss the petition.
 
(2) any lawyer or law firm receiving notification from a financial institution that the institution's approval as a trust account depository has been revoked or that the financial institution is canceling its agreement shall remove all trust accounts from the financial institution within 30 days of receipt of such notice or by such later date as is required for the payment of all outstanding items payable from the trust account. Within the same time, written notice of compliance with this Rule 4­-1.155(c)(2) shall be sent to the chief disciplinary counsel.  The notice shall include the name and address of the new trust account depository institution.
 
Comment
 
[1] Lawyers must maintain an IOLTA account unless they have been exempted by the foundation or all of their trust accounts are non-IOLTA accounts.  Funds of a client or third party must be placed in an IOLTA account if the funds are of such a nominal amount or are expected to be held by the lawyer for such a short period of time that the funds cannot earn interest or dividend income for the client or third party in excess of the costs incurred to secure such income.  Otherwise, the funds must be placed in a non-IOLTA account to earn interest for the client or third party.
 
[2] It is expected that a lawyer or law firm will exercise good faith judgment in determining whether funds of a client or third party should be placed in an IOLTA account or non-IOLTA account.  All relevant factors should be considered in this determination, including, for example, the cost of establishing and maintaining accounts for the benefit of clients or third persons, service charges, accounting fees and tax reporting procedures, the nature of the transactions involved, and the likelihood of delay.  It is also expected that placement of the funds will be reviewed at reasonable intervals if the funds remain on hand to determine if changed circumstances require further action with respect to such funds.
 
[3] The IOLTA requirements conform with the decision in Brown v. Legal Foundation a/Washington, 538 U.S. 216 (2003).  IOLTA funds must be deposited with institutions paying interest and dividends comparable to rates paid to the institution's own other similarly-situated non-IOLTA customers.  This recognizes that additional options have developed and are being offered in the marketplace by financial institutions from which qualifying IOLTA balances should also benefit.  Apart from the important goal of fairness in the treatment of IOLTA funds, the most recent rule changes are important to the purposes of the IOLTA program: providing a source of funds to support civil legal services to the poor, improving the administration of justice, and promoting other programs for the benefit of the public as are specifically approved from time to time by this Court.

4-1.22 FILE RETENTION
 
A lawyer shall securely store a client's file for 10 years after completion or termination of the representation absent other arrangements between the lawyer and client.  If the client does not request the file within 10 years after completion or termination of the representation, the file shall be deemed abandoned by the client and may be destroyed.
 
A lawyer shall not destroy a file pursuant to this Rule 4-1.22 if the lawyer knows or reasonably should know that:
 
(a) a legal malpractice claim is pending related to the representation;
 
(b) a criminal or other governmental investigation is pending related to the representation;
 
(c) a complaint is pending under Rule 5 related to the representation; or
 
(d) other litigation is pending related to the representation.
 
Items in the file with intrinsic value shall never be destroyed.
 
A lawyer destroying a file pursuant to this Rule 4-1.22 shall securely store items of intrinsic value or deliver such items to the state unclaimed property agency.
 
The file shall be destroyed in a manner that preserves client confidentiality.
 
A lawyer's obligation to maintain trust account records as required by Rules 4-1.145 to 4-1.155 is not affected by this Rule 4-1.22.

3. It is ordered that notice of this order be published in the Journal of The Missouri Bar.
 
4. It is ordered that this order be published in the South Western Reporter.

Day - to - Day

__________________________________
RICHARD B. TEITELMAN
Chief Justice