May 1987

Question Presented

Does the Texas Code of Professional Responsibility prohibit an attorney operating a nonprofit foundation which furnishes free civil legal services to low income persons from using a retainer agreement which would permit the foundation to utilize a client's trust funds paid directly by the client for the benefit of other clients after all efforts to locate the client prove unsuccessful?


Under Disciplinary Rule 9-102 of the Texas Code of Professional Responsibility, an attorney has a twofold duty as to the handling of funds belonging to a client. This duty was explained in detail in Opinion 391, February 1978. DR 9-102(A) creates the requirement that when funds belonging to a client come into the possession of an attorney, they must be placed into a "trust" account which is separate and apart from the attorney's personal or business operating accounts.

DR 9-102(B) creates the requirement that an attorney must maintain complete records of the funds and render appropriate accounts to his client regarding them. This attorney must keep accurate bookkeeping records and segregate clients' funds entirely from those of the attorney or the law firm.

The policy behind DR 9-102 was set forth in Archer v. State, 548 S.W.2d 71 (Tex.Civ.App.El Paso 1977, writ ref'd n.r.e.): DR 9-102 recognizes that an attorney will be entrusted with the clients' moneys in the course of handling his affairs. It guards against the dangers of commingling; the probability in some cases, the possibility in many cases, and the danger in all cases that such commingling will result in loss of the clients' funds . . . It calls for a reasonable manner of handling the clients' funds; it is a simple directive as to the manner of handling, rather than a misappropriation, which is another matter; it avoids the appearance of impropriety, and assures that there will be no loss of the clients' funds despite "good intentions." To comply with it, all that is required is good office management.

Under Archer, consent by the clients could not remove attorneys from the requirements of the Code of Professional Responsibility with respect to commingling of clients' and attorneys' funds. Archer, 548 S.W.2d at 74.

However, the facts presented here are sufficiently unique to warrant a different outcome. It would not be unethical for a legal service office to request that a client consent to donate unclaimed funds provided a full explanation is given to the client and no pressure is exerted to secure the consent. Furthermore, the funds should be held for a reasonable time before a transfer of the funds is made and reasonable efforts must be made to locate the client. Scrupulous care should be taken to avoid overreaching or the appearance of impropriety.


Under the Texas Code of Professional Responsibility, it would not be unethical for an attorney operating a nonprofit legal service to request a client sign a consent that unclaimed funds be used to help other needy clients. Such a transaction does not in the strict sense benefit the attorney, which is prohibited by DR 9-102. Scrupulous care must be taken as to avoid overreaching and the client must fully understand the consent which he signs. All effort must be made to contact the client upon termination of the relationship.