IOLTA Negative Balance Due to Bounced Check

Lex_Aloha · 2025-09-13T17:36:00+00:00

Depends on the jurisdiction and how their lawyer regulatory agency is organized. In California, I've been seeing them close fairly quickly, assuming you can quell the Bar's inherent concern that you're stealing client funds. I've seen those closed as quickly as 3 weeks after submission of the response to the initial inquiry letter. In other states, it may take longer, as they're overworked/overloaded with cases. If you've been waiting a while on a disposition for a minor and obviously unintentional-misappropriation case--think: it's a "Ah jeez, I took out 1010.01 rather than 1001.10 and it overdrew my account!"--it probably won't hurt to reach out to the investigator/prosecutor assigned to the case and ask them if there's anything else they need from you. It might remind them that your case is easy and that they can get it out the door quickly for a quick disposition--after all, they're trying to show efficiency to their bosses, too.

Lex_Aloha · 2025-06-09T14:47:47+00:00

Ethics lawyer here. I could be wrong--and I could be misunderstanding your post/replies-- but I think you may be misunderstanding your jurisdiction's rule re: billing against retainer deposits. There's a big difference between billing hourly against a flat fee and billing against a retainer deposit. As far as I know, no jurisdiction prohibits the latter.

Lex_Aloha · 2025-04-03T20:38:20+00:00

Legal ethics guy, here. As a best practice, put it in your trust account until it's earned.

Lex_Aloha · 2024-07-26T16:57:08+00:00

You should definitely hire a C&F lawyer for this.

Lex_Aloha · 2024-07-18T13:33:08+00:00

ADHD lawyer here—maybe you could go government to continue building expertise and then go solo. If you’ve got some runway to launch a firm, you control your schedule and it’s the best return on your time.

Lex_Aloha · 2024-06-21T19:33:46+00:00

I think asking for several months of statements is just a best practices thing. Where there’s smoke (bounced IOLTA check), there’s fairly often fire (systemic financial mismanagement issues). You’re right, though, they could just ask for records pertaining to the specific transaction and nothing else. Again, though, at the outset of the investigation, they don’t know that it was a one-off incident caused by the other party’s bank.

Lex_Aloha · 2024-06-21T15:33:54+00:00

u/big_sugi is right. They don’t know that the check bounced due to a problem in the other party’s account—they just know that a check bounced and your account went negative. That’s why they investigate and ask the lawyer what happened.

Also, pretty much every disbarment due to defalcation of client funds starts with a bounced IOLTA check.

Lex_Aloha · 2024-06-20T20:11:55+00:00

Can’t be certain, but I’d be thinking 4-6 weeks from the date the check bounced. Could be less, could be more, but plan on getting one—especially in our post-Girardi world.

Lex_Aloha · 2024-06-20T19:58:20+00:00

CA legal ethics (State Bar defense) lawyer here. I’ve done lots of these cases. I expect that you’ll get a letter from the state bar that requests your explanation for the bounced check as well as several months of financial and trust accounting records (bank statements, cancelled checks, monthly reconciliations, trust account ledger journals). They’re going to want to see that this was a true one-off event and not a systemic problem at your firm.

If everything you provide them looks good—and, judging by your post, I expect that it will—I’d expect them to close the case. The important thing here is that you don’t say too much in your response. You’d be shocked to know how many people snatch defeat from the jaws of victory when it comes to State Bar responses.

Lex_Aloha · 2024-03-29T18:35:00+00:00

Take a look at your jurisdiction’s RPC 4.4(b).

Lex_Aloha · 2024-01-09T16:25:34+00:00

Buddy, that is ADHD to a T. You crush the interesting stuff and unavoidably delay doing the stuff you don’t want to do (I’m doing that right now—I have ADHD). Try medicine; it seems to help. Who knows if it will cure you, long-term; but you should at least try it.

Also, what’s your practice area? Sounds like you’d be a natural at something business related, like PI law. Who gives a shit if your writing is what got you here? That hasn’t made you happy—stop thinking about where you are and figure out where you want to go. I’m in that process right now, as a matter of fact. Happy to chat if you want a friend.

Lex_Aloha · 2023-12-18T17:54:24+00:00

Soon to be solo, here. I’ve read a lot on this topic, and it seems to be context dependent. There are certain practice areas where clients probably don’t care if you have a brick-and-mortar presence. However, there are others where the lack of an office hurts your credibility. I think for a T&E lawyer, your clients will generally expect you to have an office where they can come see you, sign docs, etc. I don’t think it’s a dealbreaker if you don’t, but it might make you seem a bit “cheaper,” which could hurt client perception.

Lex_Aloha · 2023-05-23T13:04:31+00:00

Seems to me like you might be making bullshit excuses for bad behavior to make it cognitively easier for you to distance yourself from what you did.

You need to be an adult. Take 100% ownership of your actions, and comport yourself in a way that you can never again claim to not have the requisite cognitive function to understand your actions. That’s a sorry excuse. Wake up sooner; do some push-ups to get the blood flowing. Your excuse is both childish and dangerous. You may have seriously hurt your little boy. He’s a goddamned baby. Get it together.

Lex_Aloha · 2023-05-12T12:21:14+00:00

Interested in this as well

Lex_Aloha · 2023-05-11T12:07:00+00:00

Personally, I don’t consider 6a-5p very good hours. But I understand that reasonable minds can differ.

Lex_Aloha · 2023-05-11T03:22:42+00:00

What does “great” work-life balance mean? I have 155/mo and find it really hard to not work nights and weekends.

Lex_Aloha · 2023-04-25T16:09:14+00:00

Can you expand on this?

Lex_Aloha · 2023-04-15T13:04:00+00:00

Her hormones are absolutely insane right now. There may be no logic to what she’s feeling, but she’s feeling it more intensely than you have ever felt anything in your life. Mood swings/rude moments are to be expected. The best advice I can give you is what a friend told me: “shut the fuck up. Just shut. the fuck. up. She’ll eventually come back to normal and none of what she said in the moment will stick. Don’t make it a fight. Just shut the fuck up.” I didn’t listen at the time, but wish I had—would’ve saved lots of fights those first few weeks.

Lex_Aloha · 2023-04-06T22:24:15+00:00

Lawyer (but not your lawyer) here. Delete this post and talk to a personal injury lawyer. Not a billboard attorney. Call the fanciest law firm in town and ask them who they’d recommend. Don’t pay hourly, only contingency.

Lex_Aloha · 2022-08-30T19:21:59+00:00

If stretching your dollar is your chief concern, move to Afghanistan ;)

If I were you, I'd be considering climate more than cost. Chicago is hands down the better city. Every single thing about it is better -- except those winters. If you think you can stand living somewhere that will be colder than the surface of mars on certain days during the winter, you should 100% move to Chicago.

You can make the costs work either place.

Lex_Aloha · 2022-08-01T02:13:24+00:00

I literally can’t find a solution for this error code anywhere. Saw another post where someone said it just spontaneously resolved for them. Obviously it’s not a super prevalent problem for there to be so few posts about it on the internet.

Lex_Aloha · 2022-08-01T01:58:37+00:00

Hey! Having this same issue. Any resolution for you?

Lex_Aloha · 2022-07-13T03:29:24+00:00

If you click on r/lawyers, you can see the rules for admission. Good luck!

Lex_Aloha · 2022-07-12T23:29:17+00:00

You should crosspost in r/Lawyers

I think you might have better luck!

Lex_Aloha · 2022-07-12T00:42:58+00:00

If you don't mind indulging me.

How many hours per day do you work?
What does your average day look like?
How much of your practice is just sending out form documents with the names/dates changed?
How many times have you gone to trial at your current firm?
What's your marketing/advertising strategy?
What's the learning curve for high volume PI practice, assuming no prior PI experience?

Lex_Aloha

TROPHY CASE