The Florida Bar

Ethics Opinion

Opinion 73-5

April 30, 1973
Advisory ethics opinions are not binding.
A lawyer should diligently investigate a former partner’s misappropriation of, or failure to
account for, the funds of the firm’s clients, and in other investigations of such matters he should
fully disclose all information relating thereto that is available to him. A lawyer is ethically
responsible for funds received by a partner even though those funds were never deposited in a
partnership account. However, if the statute of limitations has run, the partnership may assert that
defense. The partnership’s lawyers may decline to repay amounts they are not required by law to

65-37; ABA Informal 871

Vice Chairman Zehmer stated the opinion of the committee:
This inquiry concerns the ethical obligation of the inquirer and his law
partners to be responsible for the acts of a former partner in misappropriating and
failing to account for certain clients’ funds that came into his custody. According
to the inquirer, some of those funds were never reflected in the partnership
records because the misappropriating lawyer cashed checks payable to him
without making any deposit to the clients’ trust account or the partnership
account. All of the known instances of misappropriated funds have been resolved
and restitution made by the former partner. Several years have elapsed since the
former partner was expelled from the partnership. The inquirer is concerned about
the partnership’s ethical responsibility for unknown misappropriations and poses
three questions:
1. What ethical responsibility does a lawyer have concerning the
investigation of a former law partner’s misappropriations or failure to account for
trust money received by the lawyer during the term of the partnership?
2. May a lawyer ethically plead the statute of limitations when a demand is
made on him for repayment of funds that were delivered to a former partner who
misappropriated or failed to account for the funds without the knowledge of the
3. Is a lawyer ethically responsible for a former partner’s misappropriation or
failure to account for trust funds that were not paid into any partnership account,
trust or otherwise?
It is often difficult to distinguish between questions of law and questions of professional
responsibility for ethics, and inquiries to this Committee sometimes involve both. Under standing
policy, the Committee does not advise on questions of law or legal liability and this opinion is
limited to ethical considerations only.

1. In answer to the first question, a lawyer has the ethical responsibility of fully
disclosing all information available to him in the investigation of a former law partner’s
misappropriation or failure to account for the monies of that law firm’s clients. The lawyer
should make sufficient investigation of his former law partner’s activities to satisfy himself that
he has diligently searched for and probably discovered all occasions of misappropriation or
failure to account for trust money received by the lawyer during the term of the partnership.
2. The second question is answered by this Committee’s Opinion 65-37, decided under
the former Canons of Ethics. There is no ethical prohibition on a lawyer’s asserting defenses
recognized by law, including the statute of limitations. Nothing in the present Code of
Professional Responsibility alters the principles upon which that decision was predicated. See
also ABA Informal Opinion 871.
3. The answer to the third question must be in the affirmative. The technicality that the
client’s property never reached the law firm’s trust or partnership account does not avoid the
ethical responsibility that attaches when the lawyer received the funds from the client in
connection with his law practice. However, it is equally clear that, under the circumstances stated
above, the Code of Professional Responsibility does not impose upon the inquiring lawyer a
professional obligation to cure the defalcations of their former partner which is greater than the
duty imposed on him by law. Stated another way, the inquiring lawyers would not violate any of
the canons or disciplinary rules in the CPR by failing to repay amounts that they are not legally
obligated to pay.