Trust accounting pilot program planned
Trust accounting pilot program planned
Senior Editor
A final contract is being drafted that will allow a pilot program for the Bar’s new trust accounting initiative aimed at helping lawyers comply with Bar trust accounting rules.
The Bar is working on an agreement with TMI Trust Company that will provide the platform to allow lawyers, if they make the correct entries when they deposit or withdraw funds, to automatically comply with the Bar’s trust accounting rules.
A hitch that held up the pilot program — allowing participating lawyers who prefer not to use electronic payments to print trust account checks at their offices — has been resolved, according to Board of Governors Parliamentarian Andy Sasso.
Sasso, who chairs a special committee setting up the trust accounting project, reported to the board at its recent Tallahassee meeting that the initial contract between The Florida Bar and TMI had been drafted and the Bar had referred it to an outside law firm with expertise in such technical issues.
“The primary part of the contract has been completed,” Sasso said. “We’re in the stage of trying to finalize that contract.
“We hope to have the contract signed in the next 15 to 30 days, and then they’ll be finalizing the platform and they are also talking [prior to the final contract] about coming down and spending a day to a day and a half with the staff of The Florida Bar to work out some of the final details.”
Sasso said there are a lot of details to be ironed out, “but everything is looking very positive” for a launch sometime between April through June.
The program, which previously received conceptual approval from the board, aims to provide access to a platform to Bar members that, as long as they enter correct information when making deposits or withdrawals, ensures compliance with all Bar trust accounting regulations, including reconciliations, journals, and ledger cards. The program is designed to be free for participating lawyers, except for wire transfer or ACH (automated clearing house) fees. (Lawyers printing their own checks will have to buy special check stock.)
The program ran into a hitch at the board’s October meeting when the board considered the pilot program. The pilot would allow lawyers to do electronic transfers into their trust accounts or use a secure lock box. Withdrawals would be made by wire transfer or ACH payments. A preliminary plan to allow lawyers to print and issue checks from their offices was dropped for at least the pilot program because TMI and another company working with it, FISTM, said it could be problematic.
That caused the board to balk going forward. Board members said the check printing capability had been promised in preliminary meetings and some clients seeking proceeds from their cases would expect immediate payment rather than waiting for TMI to print checks or perhaps paying fees for electronic transfers or ACH payments.
The board voted to go ahead with the program only if lawyers would have check writing ability. That led to further negotiations with TMI and inclusion of the ability for lawyers to print checks for both the pilot and final project.
The board also is considering an amendment to its Standing Board Policies that would create a safe harbor for lawyers for technical trust account violations if they participate in the proposed trust account program. It will vote on that when final details for the program are worked out and the contract is signed.
One benefit for the program is the pooled trust funds are expected to earn a much higher interest rate than currently paid by financial institutions holding lawyers’ IOTA accounts. That would boost IOTA income for The Florida Bar Foundation, which has been hamstrung by the lingering low interest rates from the Great Recession.
