Client Security Commission

Client Security Commission

Judicial Branch Building

1111 East Court Avenue

Des Moines, Iowa 50319

(515) 725-8029

The Client Security Commission manages a fund, generated from contributions from lawyers and judges, that reimburses clients of lawyers who have misappropriated or lost a client's money The purpose of the fund is to prevent defalcations by members of the lowa bar, and insofar as practicable, to provide for the indemnification by the profession for losses caused to the public by the dishonest conduct of members of the bar of this state. The fund also covers the cost of administering the lawyer disciplinary system and other programs which impact the disciplinary system. The commission advises the court on policies involving the administration of the fund. For more information contact client.security@iowacourts.gov

Succession Planning by Sole Practitioners

"To prevent neglect of client matters in the event of a sole practitioner's death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer's death or disability, and determine whether there is a need for immediate protective action. " Iowa Rule of Professional Conduct 32:1.3, comment 5. The Client Security Commission encourages every sole practitioner to prepare a contingency plan for administration of his or her practice upon death or disability.

An informational flyer regarding the duty to plan is available here: Flyer

An outline regarding succession planning for sole practitioners is available here: Outline

A Powerpoint slide set to accompany the outline is available here: Slide Set

NEW! A succession planning handbook is available here: Handbook

NEW! Forms from the succession planning handbook are available here: Forms

Client Security Reports Due During 2011 Will Include Special Assessment for the Client Security Trust Fund

The Client Security Trust Fund (the "Fund") of the Bar of Iowa requires a transfusion of additional operating funds in 2011 through an additional assessment payable by Iowa bar members. As of December 1, 2010, the unrestricted balance of the Fund had declined to well below $600,000, due to claim payments and trustee fees payable from the Fund, in addition to normal commission operating expenses. Based on Iowa Court Rule 39.6, an assessment will be payable with the client security report in early 2011 by almost all active Iowa lawyers, including those who previously have paid a total of $200.00 in assessments.

Under the rule, the additional assessment will be $100.00 for full-time Iowa private practitioners admitted during calendar year 2006 or earlier. Full-time Iowa private practitioners admitted during calendar years 2007, 2008 and 2009 will pay a $50.00 assessment. The assessment will be $25.00 for government lawyers, judges, corporate counsel or part-time practitioners. Lawyers admitted by examination during 2010 or 2011, and all lawyers in full time military service, are exempt from the assessment. Lawyers admitted on motion in 2010 or 2011 will pay an assessment of $50.00. The additional assessment is expected to produce an estimated $500,000 in revenue for the Fund. Additional information regarding the condition of the Client Security Trust Fund is available here: 2011 Assessment

Internet Filing of CLE Report, Client Security Report and Payment of Fees in 2011

Detailed instructions regarding annual reporting duties were mailed to all active Iowa lawyers in late December. No paper report forms were enclosed with the December mailing. Unless an exception is granted, annual client security and continuing legal education reports must be filed, and associated fees paid, on-line at the professional regulation web site. Exceptions to on-line filing will not be routinely granted.

Instructions for accessing your account on the professional regulation web site are available here: Instructions

A comprehensive tutorial regarding lawyer use of the professional regulation web site is available here: Tutorial

A penalty of $100 will be assessed for each report filed up to one month late, $150 for each report filed more than one month and up to two months late, and $200 for each report filed more than two months late. Also, the notice period prior to suspension for noncompliance now is 15 days.

Rule 31.16, Registration of House Counsel

The Iowa Supreme Court adopted rule 31.16 effective July 1, 2005. Rule 31.16 provides for registration of persons who are not admitted to practice in Iowa, but who are admitted in another jurisdiction in the United States and maintain an office or other systematic and continuous presence in Iowa to practice as house counsel for a corporation or other entity. A copy of the rule is available at this link: Rule 31.16.

Persons subject to registration should examine rule 31.16 and prepare the registration packet contemplated by the rule for submission to the Office of Professional Regulation, Judicial Branch Building, 1111 East Court Avenue, Des Moines, Iowa 50319. The packet should include the affidavit specified in rule 31.16(2) and the attachments listed in rule 31.16(3). Applicants also must include in the registration packet the $200 registration fee specified in rule 31.16(3)(a). The check or money order for this fee should be made payable to "Client Security Commission."

After the applicant's registration has been approved, he or she will receive an annual report form by personal delivery or mail from the Client Security Commission. The form must be completed, signed and returned to the Client Security Commission within thirty (30) days of registration to avoid a late filing penalty. The annual disciplinary fee prescribed by rule 31.16(9) and rule 39.5, which currently is $175.00, will be payable with this report form. Registered lawyers will receive an annual report form from the Client Security Commission each year thereafter during their maximum five years of registered status, and will be required to timely file the report form and pay the annual disciplinary fee each year.

Commission Members

The commission is composed of seven members - five lowa lawyers and two lowa residents who are not lawyers. Members shall be appointed for a term of five years unless appointed to fill a vacancy in an unexpired term. Members shall not serve more than two complete four-year terms. The following persons currently serve on the commission:

Timothy C. Lynch, Chair, Decorah

The Honorable Martha Mertz-LaFollette, Vice-Chair, Knoxville

Jamie Ward, Treasurer, West Des Moines

Jennifer A. Clemens-Conlon, Dubuque

Sondra Holmstrom, Fort Dodge

Lance D. Ehmcke, Sioux City

The Honorable David Christensen, Ellston

General Forms

An Iowa lawyer who does NOT in fact practice law in Iowa may apply for a Certificate of Exemption from filing the annual client security report and paying associated fees, pursuant to Rule 39.7. Rule 39.7 should be carefully examined regarding eligibility and reinstatement requirements before applying for exemption. The application form may be downloaded here: In Rich Text Format

Claim Procedures and Form

The claim form to be used to apply for compensation from the Commission may be downloaded here: In Rich Text Format In PDF Format

The Commission shall consider for payment all claims resulting from the dishonest conduct of a lawyer licensed to practice law in Iowa acting as an attorney or a fiduciary, provided that;

The claim arises out of the practice of law.
The alleged defalcation occurred after January 1, 1974.
The claim is made within one year after the client's discovery of the 1oss. However, in unusual circumstances this time limitation may be extended by the commission for good cause.
The claim is made directly by or on behalf of the client or the client's personal representative or, if a corporation, by or on behalf of itself or its successors in interest.
The commission is satisfied there is no other source or collateral source for the reimbursement of the loss.
Claims shall not be made that arise out of employer-employee relationship as distinguished from a lawyer-client relationship or a fiduciary relationship.

The commission has full authority to determine whether the claim merits reimbursement from the fund and if so, the amount of such reimbursement and any conditions attached to reimbursement. When determining the amount of the reimbursement the commission must consider many factors such as the amount of money available in the fund, the degree of hardship suffered by the claimant, the losses of other claimants and the degree of negligence, if any, which may have contributed to the loss. No claimant or any other person or organization shall have any right in the fund as a third party beneficiary or otherwise. The claimant does not need to be represented by counsel before the commission.

Applications shall be addressed to the Client Security Commission, Care of the Assistant Administrator, Judicial Branch Building, 1111 East Court Avenue, Des Moines, Iowa 50319.

Trust Account Audits and Procedures

The Commission employs auditors who are responsible for conducting periodic unannounced audits of the trust accounts established by Iowa lawyers under the provisions of Chapter 39 and Chapter 45 of the Iowa Court Rules.

An outline regarding trust account procedures has been published by Commission staff and is available here: In PDF format

The viewgraph slides associated with the outline are available here: In PowerPoint format

NEW! Other Available Outlines

Succession Planning for Sole Practitioners, in PDF Format

Succession Planning for Sole Practitioners, Powerpoint Slide Presentation

Protecting Yourself from Fraud by Law Firm Employees, in Rich Text Format

Protecting Yourself from Fraud by Law Firm Employees, Powerpoint Slide Presentation