How does a lawyer or law firm determine which client funds should be deposited in a pooled COLTAF account and which should be invested on behalf of individual clients?
A. The determination of whether a particular client’s funds are so nominal or are expected to be held for such a short period of time that it is not practical to earn or account for income on the individual deposits, and thus should be deposited in the pooled interest-bearing trust account with interest payable to COLTAF, rests in the good faith judgment of the lawyer or law firm. Among the factors to consider are: the amount of interest which the funds would likely earn during the period they are expected to be deposited, the reasonably estimated cost of establishing, maintaining and accounting for a separate trust account for the client (including without limitation administrative costs of the lawyer or law firm, bank service charges, and costs of preparing tax reports of such income to the client); the nature of the transaction(s) involved; and the likelihood of delay in the relevant proceedings.
