Rule 1.15(h) of the S.C. Rules of Professional Conduct mandates that all lawyers with a trust account must file a written directive with their bank requiring the bank to report any non-sufficient funds (NSF) transactions. If you have an IOLTA account, please confirm with your bank that you have a directive filed. It is the duty of the lawyer to make sure this has been done. Do not assume that all banks do it automatically. If the Commission on Lawyer Conduct discovers an overdraft that was not reported by the bank, the lawyer may be disciplined for both the Rule violation that caused the overdraft and the failure to file a directive with the bank. If you need a form directive, you can find two online at PMAP forms.

As a lawyer, what would you do if a prospective client contacted you by email and asked for your help collecting a large debt? What if you were sent a retainer check from a new client who contacted you through email? Would the answer be different if the client were a well-known foreign corporation? Lawyers around the country and around the world have been falling victim to well-executed fraudulent schemes involving phony checks (or cheques). Though the scam varies, there’s always a phony check and a request for some of the funds to be wired by the attorney.

Jim Calloway recently blogged about scams against lawyers and linked to an article I recommend: Check Scams That Target Lawyers. Another article I recommend is How Not to Get Stung by Promises of Easy Offshore Work by my colleagues Laura Calloway and David Bilinsky. You might think it couldn’t happen to you, but the perpetrators are very sophisticated. A Houston attorney recently shared his story of being taken for $182,500.

How can you prevent law office theft, fraud and embezzlement? One way is to be aware of the potential problem areas so that you can be alert and vigilant. Blogger Laura Calloway, the practice management advisor of the Alabama State Bar, has collected an excellent list of procedures you can put in place to prevent problems in your office. Example: Always reconcile bank statements within two days of their arrival in the office. To see the whole list, go to the September 16 post on The Last Word.