June 21, 2023 – Many lawyers practice in multiple jurisdictions – each with separate rules. What do you do when these jurisdictions have differing rules, especially when it comes to holding client funds in a trust account?

Question

I am licensed in both Wisconsin and State X, but practice out of my firm’s office in State X. I sometimes represent Wisconsin clients in Wisconsin matters, and hold client funds in connection with those matters. Our firm has a trust account that is fully compliant with the rules and regulations of State X, but the trust account rule of State X is different than Wisconsin’s SCR 20:1.15.

I know that if I am representing Wisconsin clients in Wisconsin matters, I normally have to follow Wisconsin’s disciplinary rules, but does that mean my firm must establish a second trust account compliant with SCR 20:1.15 for my Wisconsin clients?

Answer

SCR 20:8.5 (Disciplinary authority; choice of law) states in relevant part:

(b) Choice of law. In the exercise of the disciplinary authority of this state, the Rules of Professional Conduct to be applied shall be as follows:

(1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and

(2) for any other conduct,

(i) if the lawyer is admitted to the bar of only this state, the rules to be applied shall be the rules of this state.

(ii) if the lawyer is admitted to the bars of this state and another jurisdiction, the rules to be applied shall be the rules of the admitting jurisdiction in which the lawyer principally practices, except that if particular conduct clearly has its predominant effect in another jurisdiction in which the lawyer is admitted to the bar, the rules of that jurisdiction shall be applied to that conduct.

(iii) if the lawyer is admitted to the bar in another jurisdiction and is providing legal services in this state as allowed under these rules, the rules to be applied shall be the rules of this state.

This would seem to mean that the Wisconsin licensed lawyer representing a Wisconsin client in a Wisconsin matter, whether before a tribunal or not, would need to abide by all of Wisconsin's disciplinary rules, including the trust account rule.

That rule, however, provides a clear answer.

SCR 20:1.15 was recently amended by the Wisconsin Supreme Court, and the amendments, which take effect on July 1, 2023, are discussed in detail in the June 2023 issue of Wisconsin Lawyer. While most of the changes affect electronic transactions into and out of trust accounts, the following new Comment to SCR 20:1.15(j) clarifies the issue at hand:

This rule does not prohibit a lawyer whose principal office is in another jurisdiction and who permissibly represents clients in Wisconsin matters from using a trust account for Wisconsin matters that is compliant with the rules of the other jurisdiction.

The lawyer would then be free to use the State X compliant trust account in connection with Wisconsin matters while the lawyer practices out of the State X office.

This new Comment does not represent a substantive change from the pre-July 1, 2023 rule, but does clarify the language to make the rule more usable.

Trust Accounts: Where to Find Information

In addition to the comprehensive article referenced above, the State Bar provides ongoing and numerous resources to help lawyers understand the changes coming to SCR 20:1.15. To find what CLE programs are currently available, use this link for the WisBar Marketplace.