Two for Thursday.

It is Thursday, right?

In a “recent” effort, I mentioned that there were recent developments I was planning to eventually write about. Today presents an effort at checking two of them off the list that have only Tennessee in common. Neither of which likely provides fodder for a full post, so they will be covered together.

The first is a recently enacted revision to Tennessee’s ethics rules regarding money held in trust accounts. Specifically, the Tennessee Supreme Court has adopted a revision to RPC 1.15 regarding trust accounts to impose requirements for dealing with “unidentified funds” held in trust.

As revised, RPC 1.15 now has a new subsection (f):

(f) A lawyer who learns of unidentified funds in an IOLTA account must make periodic
efforts to identify and return the funds to the rightful owner. If after 12 months of the discovery of the unidentified funds the lawyer determines that ascertaining the ownership or securing the return of the funds will not succeed, the lawyer must remit the funds to the Tennessee Lawyers’ Fund for Client Protection (TLFCP). No charge of ethical impropriety or other breach of professional conduct shall attend to a lawyer’s exercise of reasonable judgment under this paragraph (f).

A lawyer who either remits funds in error or later ascertains the ownership of remitted funds may make a claim to TLFCP, which after verification of the claim will return the funds to the lawyer.

I personally was opposed to this proposal because in almost all circumstances “unidentified funds” simply shouldn’t exist in a trust account in the first place and, thus, this is one of the very few places in the rules that addresses a situation which can nearly only come to pass because of lawyer misconduct. Although the rule doesn’t define “unidentified funds,” my understanding is that these are different from “unclaimed funds” because the lawyer simply has no idea to whom the funds belong at all. Comment [14] still indicates that as to “abandoned” funds those will likely have to go through the process of escheatment to the State. Thus, other than circumstances in which a lawyer purchases someone else’s law practice and then finds that the underlying records aren’t up to snuff, this rule addresses obligations of a lawyer who has already dropped the ball on a very important duty.

The Tennessee Bar Association publicly signaled support for the proposal, however. The rule revision was not accompanied by any new comment paragraphs, so perhaps a time will come in the future for the Court to give a bit more clarity about how funds might come to be “unidentified” and whether the protection for judgment extends only to whether to send funds to the TCLF or not and not also to judgments about whether funds qualify as “unidentified” or not.

The second development raises a question of judgment as well. If you’ve been following aspects of how the legal profession is trying to cope with the ongoing, and now worsening in the U.S., pandemic, you’ve likely seen a variety of approaches in various states to dealing with graduates of law school and how to provide them with an opportunity to get their law license. Some states have transitioned to having their bar exam online, some states have limited the number of people who can sit for the traditional bar exam in a socially-distanced room (and some of those states have given preference to in-state law school grads), and some states have opted instead to offer diploma privilege rights to law students and allow them to become licensed without having to sit for a bar examination.

To date, my state has gone with an approach that involves limited availability but with a twist. The traditional July bar exam would have limited spaces, but they also determined to hold an extra bar exam later in the fall.

Last month, however, a collection of law school graduates has filed an emergency petition with the Tennessee Supreme Court requesting that the Court take action to allow for diploma privilege in Tennessee because of, and in response to, the pandemic. You can go read the full petition here.

It is hard to try to argue that they don’t have a point.

Edit/update: About an hour after putting this up, the Tennessee Supreme Court posted an order cancelling the July 2020 bar examination in Tennessee. You can go read the order here … it doesn’t sound like the Court is seeing it along these lines … but having to cancel it rather than move it online seems to me to be more support for seriously considering the diploma privilege route.

One thought on “Two for Thursday.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.