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What is commingling and how is it related to legal malpractice?

by | Sep 24, 2018 | Legal Malpractice |

When someone hires an attorney to manage their funds, they trust that attorney to keep their money safe in a separate account. Unfortunately, some attorneys ignore best practices and decide to “comingle” their personal finances with that of their clients. People who trust their attorneys to help manage their money should understand what commingling is and how it relates to legal malpractice.

Commingling and breach of fiduciary duty

In some circumstances, attorneys must manage or deposit their clients’ money for legal purposes. When handling their clients’ money, these lawyers should keep a clear record of transactions and avoid depositing it in their personal accounts. The American Bar Association recommends that lawyers keep their clients’ funds in a separate account or an escrow account. Commingling occurs when a lawyer deposits a client’s money into his or her personal bank account.

Attorneys that fail to keep their clients’ money separate from their personal funds may have breached their fiduciary duty. Fiduciary duty means that attorneys must handle their clients’ money with the highest standard of care. Lawyers who commingle and spend their client’s funds for their personal gain have breached both their fiduciary and committed legal malpractice.

What can clients do if they were the victim of commingling?

People who were the victims of commingling and legal malpractice can take legal action against their former lawyers to get compensation. A knowledgeable attorney can help legal malpractice victims understand their rights and investigate the practices that led to the lost money. Based on a close examination of case facts, an attorney can hold the culprits of malpractice accountable.