Colorado Supreme Court

Office of Attorney Regulation Counsel

Promoting Professionalism. Protecting the Public.

Record Keeping Duties and Succession Planning

Professional Development Counsel, Office of Attorney Regulation Counsel


If you represent clients and something were to happen to you that necessitated another lawyer winding down your practice, would that person know where to begin when it comes to client funds in your possession? Previously, this succession planning series has addressed simple steps you can take now to organize your practice so that someone would be able to wind down your affairs. This article explores in greater detail handling your clients’ funds and maintaining appropriate records so that those funds can be properly disbursed were something to happen to you.

At play here are Colorado Rules of Professional Conduct 1.15A, 1.15B, and 1.15D. Rule 1.15A advises that a lawyer must keep property of clients or third persons separate from his or her own property. Further, the rule advises that lawyers must promptly return funds or property belonging to a client or a third person. This is so unless there is a dispute over the property, in which case the property must be kept separate until the dispute resolves. Rule 1.15B establishes requirements for lawyer trust accounts. Meanwhile, Rule 1.15D outlines required recordkeeping related to client funds and property, which can be vital for someone who steps in to wind down a practice.

Rule 1.15D is precise, detailing, for example, that lawyers maintain records showing:

·      The date and amount of each deposit into the lawyer’s trust account and the person who made the payment;

·      The name and address of each person for whom funds are held and the amount held;

·      A description for each deposit; and

·      The date and amount of each disbursement and the person to whom the funds were disbursed.

Whether you’re engaging in succession planning or proactive practice review, take time to review Rule 1.15D’s recordkeeping requirements and see that you are following them. These records will allow a lawyer who might have to wind down or take over your practice on a sudden basis to do so with the benefit of knowing how trust account funds should be disbursed.

Last, as you plan, consider who will know how to get this accounting information if something were to happen to you. Would a secretary, paralegal, a designated lawyer, or a family member know where your practice’s billing records are stored? If stored electronically, does someone have the ability to access to files? Think about balancing the secure, confidential storage of accounting records with the need for someone to access the information if an emergency arose. Ultimately, proper handling of client funds is both an ethical obligation and a critical issue were someone to step in and wind down your affairs.