When can I transfer earned fees from a trust account?

Earned fees should promptly be moved to the firm’s operating account from the client trust account^[1]. The trust account is meant for funds that belong to the client only, and once the fees are earned, they are no longer the property of the client. To avoid commingling, those funds need to be transferred to the operating account.

The best practice is to provide the client should have a chance to review the invoice and approve it prior to the removal of the funds to prevent any ethical concerns. Should there be a fee dispute, you should not move the funds disputed out of the trust account until the situation is resolved. Some states have specific time requirements for how long lawyers must wait after providing a client with an invoice before withdrawing the funds in order to offer an opportunity to dispute the charges. For example, in Wisconsin the client must be given five days notice before the funds are taken out of the account^[2].

Some attorneys use a set schedule to move earned fees out of trust accounts to the operating account, while the majority prefer to do it immediately upon client approval to adhere to compliance requirements.

References

1. IOLTAs and Client Trust Accounts
2. Whom Do You Trust? Beware of Gray Areas Regarding Trust Accounts