Random Audit of Attorney Trust Accounts: Your Opinion Counts
Attorney Survey Respondents Offered Valuable Feedback to Board of Governors Taskforce
In November, nearly 9,000 active and active exempt attorneys received the opportunity to offer feedback to the state bar’s Board of Governors taskforce regarding whether the state bar should make a recommendation to the Nevada Supreme Court regarding the implementation of a program to conduct random audits of attorney trust accounts. A survey polled bar members for their opinions; more than a thousand attorneys responded to the survey, providing invaluable feedback to the Board of Governors’ taskforce while it explored this potential new program. The state bar sincerely thanks its members for taking the time to offer their input. For more information on the Random Audit of Attorney Trust Account Pilot Program, see “Join the Discussion: Whether Malpractice Insurance Should be Mandatory for Nevada Attorneys,” in the December 2017 issue of Nevada Lawyer magazine.
The respondents had several qualities in common. The majority of responses came from attorneys working in private practice (76 percent), and the majority currently work in Nevada (72 percent). In addition, the majority of responses came from lawyers practicing in solo or small practice settings (48 percent).
Random Audit of Attorney Trust Accounts: Survey Results
On average, the attorneys who responded to the November 2017 survey regarding a potential program to conduct random audits of attorney trust accounts currently hold one trust account (86 percent), are the lawyers with authority to access client trust accounts to deposit or withdraw funds (70 percent), and half (50 percent) are also responsible for conducting their office’s daily accounting tasks.
Although the survey’s respondents had many qualities in common, responses to the individual survey questions were heavily divided; many of the responses had no clear majority. One of the areas where there was an overwhelming consensus, however, was an interest in obtaining more educational tools for attorneys related to improving trust account practices. More than three-fourths of respondents (76 percent) indicated a desire for educational materials providing guidelines and best practices for establishing and maintaining their trust accounts. In addition, 77 percent of respondents expressed interest in taking CLE courses on the same topic.
Some of the survey’s most valuable responses came from those who answered questions about their concerns related to specific aspects of implementing a random audit program. Specifically, a strong majority of respondents (58 percent) indicated they would be “very concerned” about disruptions to their law practice during the audit period. In addition, a similar majority (56 percent) were also “very concerned” about incurring expenses related to being selected for an audit. This feedback has already resulted in refinements to the proposed policies and procedures. Respondents were also invited to offer opinions on audit preparation tools. They ranked four statements as “very important” to the preparation process, including:
- The necessity of having an audit preparation checklist (67 percent);
- The ability to correct errors without a report to the state bar (65 percent);
- The opportunity to speak with someone about audit preparations (58 percent); and
- The ability to engage in ongoing discussions with their auditors (57 percent).
Respondents were asked whether they thought other attorneys or law firms might need assistance establishing and maintaining their trust accounts. Only 13 percent disagreed; 41 percent agreed, and 46 percent were unsure. Similarly, a majority (53 percent) of respondents believed that a law firm’s size does not impact whether it makes errors when maintaining its trust accounts.
Feedback received from respondents was invaluable for the taskforce’s revisions of its recommendations, which were submitted to the Board of Governors at its January 2018 meeting. The Board of Governors approved the taskforce’s recommendations and has filed an administrative docket (ADKT) with the Nevada Supreme Court on this matter. The Nevada Supreme Court scheduled a public hearing on April 2, 2018, via ADKT 0533, inviting public comment regarding these proposed changes.