Rule 3-109

(CANON 9)

A Lawyer Should Avoid Even the Appearance of Professional Impropriety

ETHICAL CONSIDERATIONS

EC 9-1  Continuation of the American concept that we are to be governed by rules of law requires that the people have faith that justice can be obtained through our legal system. A lawyer should promote public confidence in our system and in the legal profession.

EC 9-2  Public confidence in law and lawyers may be eroded by irresponsible or improper conduct of a lawyer. On occasion, ethical conduct of a lawyer may appear to laymen to be unethical. In order to avoid misunderstandings and hence to maintain confidence, a lawyer should fully and promptly inform his client of material developments in the matters being handled for the client. While a lawyer should guard against otherwise proper conduct that has a tendency to diminish public confidence in the legal system or in the legal profession, his duty to clients or to the public should never be subordinate merely because the full discharge of his obligation may be misunderstood or may tend to subject him or the legal profession to criticism. When explicit ethical guidance does not exist, a lawyer should determine his conduct by acting in a manner that promotes public confidence in the integrity and efficiency of the legal system and the legal profession.

EC 9-3  After a lawyer leaves judicial office or other public employment, he should not accept employment in connection with any matter in which he had substantial responsibility prior to his leaving, since to accept employment would give the appearance of impropriety even if none exists.

EC 9-4  Because the very essence of the legal system is to provide procedures by which matters can be presented in an impartial manner so that they may be decided solely upon the merits, any statement or suggestion by a lawyer that he can or would attempt to circumvent those procedures is detrimental to the legal system and tends to undermine public confidence in it.

EC 9-5  Separation of the funds of a client from those of his lawyer not only serves to protect the client but also avoids even the appearance of impropriety, and therefore commingling of such funds should be avoided.

EC 9-6  Every lawyer owes a solemn duty to uphold the integrity and honor of his profession; to encourage respect for the law and for the courts and the judges thereof; to observe the Code of Professional Responsibility; to act as a member of a learned profession, one dedicated to public service; to cooperate with his brother lawyers in supporting the organized bar through the devoting of his time, efforts, and financial support as his professional standing and ability reasonably permit; to conduct himself so as to reflect credit on the legal profession and to inspire the confidence, respect, and trust of his clients and of the public; and to strive to avoid not only professional impropriety but also the appearance of impropriety.

DIRECTORY RULES

DR 9-101 - Avoiding Even the Appearance of Impropriety.
(A)  A lawyer shall not accept private employment in a matter upon the merits of which he has acted in a judicial capacity.
(B)  A lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee.
(C)  A lawyer shall not state or imply that he is able to influence improperly or upon irrelevant grounds any tribunal, legislative body, or public official.

DR 9-102 - Preserving Identity of Funds and Property of Client.
(A)  All funds of clients paid to a lawyer or law firm, including advances for cost and expenses, shall be deposited in one or more identifiable bank or savings and loan association accounts maintained in the state in which the law office is situated and no funds belonging to the lawyer or law firm shall be deposited therein except as follows:

(1)  funds reasonably sufficient to pay bank charges may be deposited therein;
(2)  funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally resolved.

(B) A lawyer shall:

(1)  promptly notify a client of the receipt of his funds, securities, or other properties;
(2)  identify and label securities and properties of a client promptly upon receipt and place them in a safe deposit box or other place of safekeeping as soon as practicable;
(3)  maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them;
(4)  pay any final judgment or rule absolute rendered against such lawyer for money collected by him as a lawyer within ten days after the time appointed in the order or judgment. In such case, the record of the judgment is conclusive evidence unless obtained without valid service of process;
(5)  account for trust property, including money, held in any fiduciary capacity.

(C)  No later than July 1, 1990 (unless a lawyer has elected to exempt some or all of his accounts in accordance with subparagraph (4) below), all client's funds shall be placed in either an interest-bearing account with the interest being paid to the client or an interest-bearing (IOLTA) account with the interest being paid to the Georgia Bar Foundation as hereinafter provided.

(1)  With respect to funds which are not nominal in amount, or are not to be held for a short period of time, a lawyer shall, with or without notice to his clients, create and maintain an interest-bearing trust account with any bank, credit union or savings and loan association which is authorized by federal or state law to do business in Georgia and which is federally insured, with the interest to be paid to the client. No earnings from such an account shall be made available to a lawyer or law firm.
(2)  With respect to funds which are nominal in amount or which are to be held for a short period of time, a lawyer shall, with or without notice to the client, create and maintain an interest-bearing, government insured trust account (IOLTA) in compliance with the following provisions:

(a)  No earnings from such an IOLTA account shall be made available to a lawyer or law firm;
(b) The account shall include all clients' funds which are nominal in amount or to be held for a short period of time;
(c)  An interest-bearing trust account may be established with any bank, credit union or savings and loan association authorized by the federal or state law to do business in Georgia and which is federally insured. Funds in each interest-bearing trust account shall be subject to withdrawal upon demand, subject only to any notice period which the institution is required to reserve by law or regulation.
(d)  The rate of interest payable on any interest-bearing trust account shall not be less than the rate paid by the depositor institution to regular, non-lawyer depositors. Higher rates offered by the institution to customers whose deposits exceed certain time or quantity minima, such as those offered in the form of certificates of deposit, may be obtained by a lawyer or law firm on some or all of the deposit funds so long as there is no impairment of the right to withdraw or transfer principal immediately.
(e)  Lawyers or law firms shall direct the depository institution:

(i)to remit to the Georgia Bar Foundation interest or dividends, net of any charges or fees on that account, on the average monthly balance in that account, or as otherwise computed in accordance with a financial institution's standard accounting practice, at least quarterly. Any bank fees or charges in excess of the interest earned on that account for any month shall be paid by the lawyer or law firm in whose name such account appears, if required by the bank;
(ii)to transmit with each remittance to the Foundation a statement showing the name of the lawyer or law firm for whom the remittance is sent, the rate of interest applied, the average monthly balance against which the interest rate is applied, the service charges or fees applied, and the net interest remittance;
(iii)to transmit to the depositing lawyer or law firm at the same time a report showing the amount paid to the Foundation, the rate of interest applied, the average account balance of the period for which the report is made, and such other information provided to non-lawyer customers with similar accounts.

(3)  No charge of ethical impropriety or other breach of professional conduct shall attend the determination that such funds are nominal in amount or to be held for a short period of time, or to the decision to invest client's funds in a pooled interest-bearing account.
(4)  If an election not to participate in the program is submitted in accordance with the procedure set forth in this paragraph, a lawyer may elect not to maintain some or all of this escrow accounts in accordance with paragraph (B) of this Rule until July 1, 1991. The lawyer must, prior to July 1, 1990, make such election on a Notice of Election form provided by the Georgia Bar Foundation. A lawyer admitted into the Georgia Bar after July 1, 1990, but prior to July 1, 1991, who elects not to maintain such an account shall submit an appropriate Notice of Election within thirty days after admission into the Bar. If a Notice of Election is not submitted within the applicable time, the lawyer shall be required to maintain the account(s) described in paragraph (B) of this standard no later than July 1, 1990. This subparagraph (4) shall become null and void on July 1, 1991.
(5)  The Georgia Bar Foundation shall establish procedures to provide that no lawyer or law firm shall be required to maintain an interest-bearing trust account which:

(i)  results in a significant cost to the lawyer or law firm; or
(ii)  cannot reasonably be expected to or has not produced interest income exceeding the reasonable service charges or fees imposed by the financial institution.

(6)  The Georgia Bar Foundation shall also establish procedures for a lawyer or law firm to be authorized to maintain an interest-free trust account for client funds if such lawyer or law firm has its principal office in a county where no bank, credit union or savings and loan association complying with the requirements of subparagraph (C)(1) above will provide an IOLTA account.
(7)  Any lawyer or law firm who has in good faith applied for an exemption pursuant to either subparagraph (5) or (6) above, and has submitted sufficient material for determination by the Georgia Bar Foundation shall be entitled to the exemption and be authorized to maintain interest-free trust accounts. Any exemption granted pursuant to subparagraphs (5), (6) or (7) hereof, shall be valid for three (3) years, but may be granted for additional three (3) year periods upon the filing of supplemental requests.
(8)  If the Georgia Bar Foundation determines that the lawyer or law firm is not entitled to the exemption applied for, it shall notify the lawyer or law firm involved which or who will have thirty (30) days to appeal the adverse determination to the Supreme Court of Georgia. Following a final determination that an exemption is not justified, a new exemption pursuant to (5) and (6) above may be applied for if in the good faith determination of the lawyer or law firm, there has been a material change in circumstances since the final adverse determination.
(9)  No lawyer or law firm shall be subject to any charge of ethical impropriety or subject to any discipline for noncompliance with IOLTA unless or until a final determination by the Georgia Bar Foundation that the lawyer or law firm is not entitled to same, or unless or until an adverse ruling or determination is made by the Supreme Court that the lawyer or law firm is not entitled to an exemption from mandatory IOLTA requirements if an appeal is pursued.
(10)  The Georgia Bar Foundation, subject to approval by the Supreme Court, shall establish reasonable procedures for the implementation of (5)-(9) above.

(D)  Each calendar quarter, the Georgia Bar Foundation shall make a grant to the Indigent Defense Council of at least forty percent (40%) and to the Georgia Civil Justice Foundation of at least ten percent (10%) of all IOLTA funds received, less administrative costs, during the immediately preceding calendar quarter pursuant to subparagraph (2)(e)(i), so long as the Indigent Defense Council and the Georgia Civil Justice Foundation remain tax-exempt charitable/educational organizations under Sections 115 and 170(c)(1) or under Section 501(c)(3) of the Internal Revenue Code and the purposes and activities of the organizations are consistent with the exempt purposes of the Georgia Bar Foundation. If either or both organizations are determined either by the Internal Revenue Service or by the Georgia Department of Revenue to be taxable entities at any time, or the purposes and activities of the Indigent Defense Council or the Georgia Civil Justice Foundation become inconsistent with the exempt purposes of the Georgia Bar Foundation, then the Georgia Bar Foundation shall retain all IOLTA funds which would have been granted to the organization(s) pursuant to DR-9-102(D).
(E)  As a condition to continued receipt of IOLTA funds, the Georgia Bar Foundation, the Georgia Indigent Defense Council and the Georgia Civil Justice Foundation shall each present a report of its activities and an audit of its finances to the Supreme Court of Georgia at least annually.
(F)  The Georgia Bar Foundation shall protect the confidentiality of information regarding a lawyer's or law firm's trust account obtained by virtue of Standard 65 and DR-9-102.