What ABA Model Rule 1.15 Requires — and What Most Law Firms Get Wrong

Sam's List Editorial | 2026-06-06

What ABA Model Rule 1.15 Requires — and What Most Law Firms Get Wrong Attorney trust account violations are the single most common reason lawyers face disciplinary proceedings. The rule is not ambiguous. The accounting is not technically complex. Yet the violations keep happening — almost always at small firms, almost always by attorneys who didn't realize they were doing anything wrong. ABA Model Rule 1.15 sets the baseline for how attorneys must handle client funds and property. Most states have adopted it with minor variations. The core requirements are clear: keep client funds separate, maintain accurate records, and be able to account for every dollar at any moment. The problem isn't that attorneys don't know the rule exists. It's that they don't fully understand what compliance actually requires at the bookkeeping level — and they're using accounting practices that look compliant but aren't. What Rule 1.15 Requires at Its Core The rule states that a lawyer must hold client property separately from the lawyer's own property. Client funds must be kept in a separate, identifiable account at a financial institution — typically an IOLTA (Interest on Lawyers' Trust Accounts) account. Funds belonging to the lawyer must not be in that account. This sounds simple. It becomes complicated in practice because of what "separate" really means and because trust accounts see a high volume of transactions — client retainers received, fee draws taken, settlement proceeds deposited, client disbursements made — all of which must be tracked at the individual client level. The rule also requires that records be kept in a manner that accurately identifies all client funds, is available for inspection, and is maintained in a reasonably organized format. The specific recordkeeping mechanics are largely determined by state implementation — most states have more detailed requirements than the model rule itself. The Three-Way Reconciliation Requirement Most state implementations require monthly three-way reconciliation of the trust account. This is where most small firms either don't comply or don't understand what they're required to do. Three-way reconciliation means three numbers must agree every month: Bank statement balance — the balance on your trust account bank statement at month-end Trust account book balance — the running balance in your accounting system for the trust account Sum of individual client ledger balances — the total of every client's individual trust balance added together All three numbers must match. Exactly. If they don't — even by