Attorney D. William Davis was publicly reprimanded after his secretary embezzled $185,000 from his solo practice over 11 years. Ultimately, the funds stolen were funds that would have been paid to Davis. However, some of the funds were unearned retainers in Davis’s IOLTA account. His secretary pleaded guilty to theft by deception and was sentenced to three years in prison. Davis reimbursed his IOLTA account for the client funds that had yet to be unearned. Although Davis reviewed his bank accounts every month, he did not perform the required monthly reconciliation of the client ledgers.
The Supreme Court of Ohio determined that Davis violated “Prof.Cond.R. 1.15(a)(5) (requiring a lawyer to perform and retain a monthly reconciliation of the records of funds being held on a client’s behalf) and former DR 9-102(B)(3) (requiring a lawyer to maintain complete records of all client property coming into the lawyer’s possession and render appropriate accounts to each client). In addition, the parties stipulated and the board found that Davis failed to adequately supervise Sliva in violation of Prof.Cond.R. 5.3(b) (requiring a lawyer to make reasonable efforts to ensure that a nonlawyer employee’s conduct is compatible with the professional obligations of the lawyer) and former DR 1- 102(A)(6) (prohibiting a lawyer from engaging in conduct that adversely reflects on the lawyer’s fitness to practice law).”
Because it found no aggravating but several mitigating circumstances, the Supreme Court of Ohio publicly reprimanded Davis. Among the mitigating circumstances were Davis’s full and free disclosure to relator and the Board and his extremely cooperative behavior during the disciplinary process. Davis’s clients lost no money in the theft and he and his partner have implemented protocols to ensure that such conduct does not recur.
The lesson to be learned is that monthly IOLTA reconciliations are crucial to an attorney’s duties under the Ohio Rules of Professional Conduct.
Eye on Ethics 