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In re Hart11/8/2004
Submitted October 8, 2004
PUBLIC REPRIMAND
The Office of Disciplinary Counsel (ODC) and respondent have entered into an Agreement for Discipline by Consent pursuant to Rule 21, RLDE, Rule 413, SCACR, in which respondent admits misconduct and agrees to either an admonition or a public reprimand. We accept the agreement and issue a public reprimand. The facts, as set forth in the agreement, are as follows.
FACTS
Matter I
Respondent was admitted to practice law in 1988. Until approximately March 2003, respondent worked for several law firms, primarily representing plaintiffs or claimants. From March 2003 through April 2004, respondent operated a solo practice in which he handled personal injury cases on a contingency fee basis.
In connection with his solo practice, respondent failed to maintain accurate or complete client ledgers, a check register or accounting journal, monthly account reconciliations, or any other system to facilitate the reliable identification of clients who had funds in his accounts and the balance of those funds. During that same period, respondent failed to maintain copies or originals of checks written on his operating or trust account. Respondent relied primarily on check stubs, on-line banking, and his own recollection to monitor the flow of funds through his accounts. As a result, respondent was unable to identify client funds remaining in accounts at any given point in time.
It was respondent's practice to deposit a client settlement check into his trust account, confirm that the check had cleared, and then electronically transfer the funds from the trust account to his operating account. Respondent then disbursed funds to and on behalf of clients from the operating account. This practice was based on respondent's erroneous belief that his former employer, a more experienced attorney, processed settlements in this matter.
Respondent left a portion of his fees from client settlements in his trust account as a cushion. Respondent's remaining fees from settlement funds often remained in his operating account for his use in connection with operating his law office and for his personal use. Respondent failed to maintain records to ensure an accurate accounting of his accumulated fees in the trust account and the operating account. Although no client or client creditor has complained that payment was not received, respondent acknowledges that he should have processed client settlements using only his trust account and that his deposit of client funds and earned fees into his operating account constituted commingling.
Respondent prepared and negotiated eight operating account checks payable to cash. Additionally, respondent used a debit or cash card to pay office expenses, to purchase personal items, and to make cash withdrawals from the operating account. Respondent acknowledges that, because it contained client funds, his operating account was a de facto trust account and that it was improper to make disbursements from that account in cash. Respondent's cash transactions and payments for office expenses and personal items were made from what respondent believed to be earned fees remaining in his operating account. Although there is no indication respondent misappropriated client funds, he acknowledges that his lack of proper accounting and documentation raised a question of misappropriation and impaired his ability to confirm the integrity of client funds.
On at least six occasions, respondent negotiated client settlement checks for cash without depositing them into his trust account. Respondent failed to accurately and completely account for remittances of ca
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