The State Bar has approved the Client Trust Account Protection Program (CTAPP) [Rule 2.5] and other corrective actions to strengthen the State Bar’s oversight and regulation of client trust accounts.

CTAPP was designed to increase public protection by regulating those attorneys responsible for complying with trust fund duties. The goal is to promote compliance and avoid misconduct before a client is harmed by the mismanagement of entrusted funds or property.

Attorneys in California must comply with the following new requirements:

• Register their client trust accounts (including IOLTA) annually with the State Bar, either individually or through their law firm or organization;

• Complete an annual self-assessment of client trust account management practices;

• Certify with the State Bar that they understand and comply with requirements and prohibitions applicable to the safekeeping of funds and property of clients and other persons in rule 1.15 of the Rules of Professional Conduct.

Pursuant to Rule 1.15, attorneys have a statutory and ethical obligation to safeguard funds they hold in trust for their clients or other persons. To avoid commingling, attorneys must always keep those funds separate from their business and personal accounts. Attorneys must maintain accurate books and report timely and completely to their client regarding the status and accounting of these funds.

Rule 1.15(d)(3) and (e) requires you to keep records of your monthly reconciliation of your client ledgers, account journals and bank statements.

Additionally, under CTAPP, the State Bar will also impose the following:

Compliance Review: When selected by the State Bar, a licensee must complete and submit to the State Bar a client trust accounting compliance review to be conducted by a Certified Public Accountant at the licensee’s expense

Additional Actions: When selected by the State Bar, an additional action or actions based on the results of a compliance review may include an investigative audit, a notice of mandatory corrective action, and a referral for disciplinary action.

As a former State Bar Investigator II with a CTA School Certificate, partnered with a Certified Public Accountant from a “Big 4” accounting firm, we know how to keep you in compliance.

Don’t run the risk of losing your license. Let us help you reconcile your accounts every month. You can avoid spending too much money when the State Bar requires you to pay a CPA to review your accounts for the entire year in order to complete and submit a CTA compliance review. This is very costly, time consuming, and will keep you from doing what matters most, running your practice.