RULE 1.15 SAFEKEEPING PROPERTY
(a) A lawyer shall hold property of clients or third persons that is in a
lawyer's possession in
connection with a representation separate from the lawyer's own property. Funds shall be
in one or more identifiable interest bearing trust accounts in accordance with the provisions of
(d) (f). Other property shall be identified as such and
Complete records of such account funds and other property shall be kept by the lawyer in the
prescribed in paragraph (f) (h).
(b) A lawyer may deposit the lawyer's own funds in a client trust account only for the purpose of paying bank service charges, fees associated with credit card payments, or wire transfers related to that account, but only in an amount necessary for that purpose.
(c) A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.
(b) (d) Upon receiving, in
connection with a representation, funds or other property in which a
client or third person has an interest, a lawyer shall promptly notify the client or third person.
Except as stated in this rule or otherwise permitted by law or by agreement with the client, a
shall promptly deliver to the client or third person any funds or other property that the client or
person is entitled to receive and, upon request by the client or third person, shall promptly render
a full accounting regarding such property.
(c) (e) When, in
the course of representation, a lawyer is in possession of property in which
two or more persons (one of whom may be the lawyer and another
person) claim interests, the
property shall be kept separate by the lawyer until there is an accounting and severance
interests. If a dispute arises concerning their respective interests, the portion in dispute shall be
separate by the lawyer until the dispute is resolved. The lawyer shall promptly
distribute all portions
of the property as to which the interests are not in dispute.
(d) (f) Each trust account
referred to in paragraph (a) shall be an interest bearing trust account in
a bank, savings bank, trust company, saving and loan association, savings association, credit
or federally regulated investment company selected by a lawyer in the exercise of ordinary
authorized by federal or state law to do business in North Dakota and insured by the Federal
Insurance Corporation, the National Credit Union Share Insurance Fund, or the Federal Savings
Loan Insurance Corporation. Interest bearing trust funds shall be placed in accounts in which
withdrawals or transfers can be made by the depositing lawyer or law firm without delay, subject
only to any notice period which the depository institution is required to reserve by law or
(1) A lawyer who receives funds of clients or third persons shall maintain a pooled interest bearing trust account for deposit of all such funds received that are nominal in amount or expected to be held for a short period of time. The interest accruing on this account, net of any transaction costs, shall be paid to and administered by the North Dakota Bar Foundation in accordance with Administrative Rule 24 of the Supreme Court of North Dakota. The North Dakota Bar Foundation holds the entire beneficial interest in all interest monies accruing on this account.
(2) All funds of a client or third person shall be deposited in the account specified in paragraph
(d)(f)(1) unless they are deposited in:
(i) a separate interest bearing trust account for the particular client or third person on which the interest, net of any transaction costs, will be paid to the client or third person; or
(ii) a pooled interest bearing trust account with subaccounting which will provide for computation of interest earned by each client's or third person's funds and the payment thereof, net of any transaction costs, to the client or third person.
(3) In determining whether to use the account specified in paragraph
(d)(f)(1) or an account specified in paragraph (d)(f)(2), a lawyer should take into consideration the following factors when deciding whether the funds to be invested may be utilized to provide a positive net return to the client or third person:
(i) the amount of interest which the funds would earn during the period they are expected to be deposited;
(ii) the cost of establishing and administering the account, including the cost of the lawyer's services and the cost of preparing any tax reports required for interest accruing to a client's or third person's benefit; and
(iii) the capability of financial institutions described in paragraph
(d)(f) to calculate and pay interest on individual accounts or subaccounts.
(4) As to accounts under paragraph
(d)(f)(1), a lawyer or law firm shall direct the depository institution:
(i) to remit interest or dividends, net of any service charges or fees, on the average monthly balance in the account, or as otherwise computed in accordance with an institution's standard accounting practice, at least quarterly, to the North Dakota Bar Foundation (the foundation); and
(ii) to transmit with each remittance to the foundation a statement showing the name of the lawyer or law firm for whom the remittance is sent, the rate of interest applied, and the amount of service charges deducted, if any, and the account balance(s) of the period in which the report is made, with a copy of such statement to be transmitted to the depositing lawyer or law firm.
(e) (g) Lawyers who are
admitted to practice in a jurisdiction other than the state of North Dakota
and lawyers who are associated in a law firm with at least one lawyer who is admitted to practice
in a jurisdiction other than the state of North Dakota are exempt from the requirements of
(d) (f) if the lawyer or law firm maintains a pooled interest bearing
trust account for the deposit of
funds of clients or third persons in a financial institution located outside the state of North
and the interest, net of any service charges and fees, from the account is being remitted to the
or third person who owns the funds, or to a non-profit organization or government agency
to the laws or rules governing lawyer conduct of the jurisdiction in which the financial institution
is located. This exemption shall not relieve a lawyer from any of the other obligations imposed
(f) (h) A lawyer shall
maintain or cause to be maintained on a current basis records sufficient to
demonstrate compliance with the provisions of this rule Rule. Such
records shall be preserved for
at least six years after termination of the representation.
(g) (i) A lawyer shall
certify, in connection with the annual renewal of the lawyer's license and in
such form as the clerk of the supreme court of North Dakota may prescribe, that the lawyer is
complying with the provisions of this rule Rule.
 A lawyer should hold property of others with the care required of a
professional fiduciary. All
which that is the property of clients or third persons
should, including potential clients,
must be kept separate from the lawyer's business and personal property and, if
monies, . Monies that
are the property of clients or third persons, including potential clients, must be held in one
interest bearing trust accounts. Separate trust accounts may be warranted when administering
monies or acting in similar fiduciary capacities. The determination of whether funds of a client
third person could be invested to provide a positive net return to the client , rests
in the sound
judgment of each lawyer or law firm. No charge of ethical impropriety or other breach
professional conduct shall attend a lawyer's exercise of sound judgment if the lawyer acts in
 While normally it is impermissible to commingle the lawyer's own funds with client funds, paragraph (b) provides that it is permissible when necessary to pay bank service charges on that account. Accurate records must be kept regarding which part of the funds are the lawyer's.
 Lawyers often receive funds from
third parties from which
the lawyer's fee will be paid. If there
is risk that the client may divert the funds without paying the fee, the The
lawyer is not required to
remit the portion from which the fee is to be paid; although to the client
funds that the lawyer
reasonably believes represent fees owed. However, a lawyer may not hold funds to coerce a
into accepting the lawyer's contention , the . The disputed portion of
the funds may be must be kept
in a trust account and if the lawyer suggests
should suggest means for prompt resolution of the
dispute, such as arbitration , and the . The undisputed
portion of the funds is shall be promptly
Third Paragraph (e) also recognizes that third parties,
such as a client's creditors, may have just
lawful claims against specific funds or other property in a lawyer's custody
such as a client's creditor
who has a lien on funds recovered in a personal injury action. A lawyer may have a duty
applicable law to protect such third-party claims against wrongful interference by the
client , and
accordingly may . In such cases, when the third party claim is not frivolous under
the lawyer must refuse to surrender the property to the client until the claims are
a A lawyer should not unilaterally assume to arbitrate a dispute between the
client and the third
party, but, when there are substantial grounds for dispute as to the person entitled to the
lawyer may file an action to have a court resolve the dispute.
 The obligations of a lawyer under this Rule are independent of those arising from activity other than rendering legal services. When a lawyer holds funds in a capacity other than as a lawyer representing a client, this Rule does not regulate the manner in which those funds are to be held and protected. For example, a lawyer who serves as an escrow agent is governed by the applicable law relating to fiduciaries even though the lawyer does not render legal services in the transaction.
 Guidance regarding the administration of trust accounts may be available from the Interest on Lawyer Trust Account Committee of the North Dakota Bar Foundation.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 04/26/85 and 08/23/85; and Revised by the State Bar Association of North Dakota on 08/29/86 and approved by the Board of Governors on 09/06/86; Minutes of the Joint Committee on Attorney Standards on 11/14/03, 03/18/05, 06/14/05, 09/09/05.