The Importance of Checks & Balances in Law Firm Management, Including Handling Of Elder Client Funds

A news release from the U.S. Attorney’s Office in Western Virginia provides an important reminder of the importance for every lawyer of having a system of checks and balances for law office management, to prevent any single employee from having unsupervised access or exclusive control over client trust funds.  On December 15, 2014, a 34-year-old legal assistant at a law firm in Virginia was sentenced to 24 months in federal prison for stealing more than $183k from an elderly client of the law firm.  The lawyer who employed that assistant had been named by the county to serve as the conservator for the elderly woman who became the victim.  According to the news release, the attorney “allowed [the legal assistant] to access the elderly woman’s bank accounts,…but [the assistant] did not have signature authority on the accounts.”

According to the news release, the employer “to date… has repaid $104,990.15.” One suspects the law firm (or, its insurer) will have to pay the whole tab, even though the sentencing order imposes an obligation of restitution for the full sum on the legal assistant.