Opinion

In Re: Amendments of the Pennsylvania Rules of Professional Conduct and the Pennsylvania Rules of Disciplinary Enforcement

Court: Supreme Court of Pennsylvania
Filed: Dec 30, 2014
Status: Published
On the bench: per curiam
Cited by: 0 cases

The opinion

Annex A

Rule 1.7 Conflict of Interest: Current Clients

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Comment:

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Personal Interest Conflicts

[10] The lawyer’s own interests should not be permitted to have an adverse

effect on representation of a client. For example, if the probity of a lawyer’s own

conduct in a transaction is in serious question, it may be difficult or impossible for the

lawyer to give a client detached advice. Similarly, when a lawyer has discussions

concerning possible employment with an opponent of the lawyer’s client, or with a law

firm representing the opponent, such discussions could materially limit the lawyer’s

representation of the client. In addition, a lawyer may not allow related business

interests to affect representation, for example, by referring clients to an enterprise in

which the lawyer has an undisclosed financial interest. See Rule 5.8 for specific Rules

that prohibit or restrict a lawyer’s involvement in the offer, sale, or placement of

investment products regardless of an actual conflict or the potential for conflict.

See Rule 1.8 for specific Rules pertaining to a number of personal interest conflicts,

including business transactions with clients. See also Rule 1.10 (personal interest

conflicts under Rule 1.7 ordinarily are not imputed to other lawyers in a law firm).

***

Rule 1.8 Conflict of Interest: Current Clients: Specific Rules

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Comment:

Business Transactions Between Client and Lawyer

[1] A lawyer’s legal skill and training, together with the relationship of trust

and confidence between lawyer and client, create the possibility of overreaching when

the lawyer participates in a business, property or financial transaction with a client, for

example, a loan or sales transaction or a lawyer investment on behalf of a client. The

requirements of paragraph (a) must be met even when the transaction is not closely

related to the subject matter of the representation, as when a lawyer drafting a will for a

client learns that the client needs money for unrelated expenses and offers to make a

loan to the client. The Rule applies to lawyers engaged in the sale of goods or services

related to the practice of law, for example, the sale of title insurance or investment

services to existing clients of the lawyer’s legal practice. See Rule 5.7. But see Rule

5.8 for specific Rules that prohibit or restrict a lawyer’s involvement in the offer,

sale, or placement of investment products regardless of an actual conflict or the

potential for conflict. [It] Rule 1.8 also applies to lawyers purchasing property from

estates they represent. It does not apply to ordinary fee arrangements between client

and lawyer, which are governed by Rule 1.5, although its requirements must be met

when the lawyer accepts an interest in the client’s business or other nonmonetary

property as payment of all or part of a fee. In addition, the Rule does not apply to

standard commercial transactions between the lawyer and the client for products or

services that the client generally markets to others, for example, banking or brokerage

services, medical services, products manufactured or distributed by the client, and

utilities services. In such transactions, the lawyer has no advantage in dealing with the

client, and the restrictions in paragraph (a) are unnecessary and impracticable.

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Rule 1.15 Safekeeping Property

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disposition of Rule 1.15 Funds and property shall be preserved for a period of five

years after termination of the client-lawyer or Fiduciary relationship or after distribution

or disposition of the property, whichever is later. A lawyer shall maintain the writing

required by Rule 1.5(b) (relating to the requirement of a writing communicating

the basis or rate of the fee) and the records identified in Rule 1.5(c) (relating to

the requirement of a written fee agreement and distribution statement in a

contingent fee matter). A lawyer shall also maintain the following books and records

for each Trust Account and for any other account in which Fiduciary Funds are held

pursuant to Rule 1.15(l):

(1) all transaction records provided to the lawyer by the Financial

Institution or other investment entity, such as periodic statements, cancelled

checks in whatever form, deposited items and records of electronic

transactions; and

(2) check register or separately maintained ledger, which shall include

the payee, date, purpose and amount of each check, withdrawal and transfer,

the payor, date, and amount of each deposit, and the matter involved for each

transaction[.]; provided, however, that where an account is used to hold

funds of more than one client, a lawyer shall also maintain an individual

ledger for each trust client, showing the source, amount and nature of all

funds received from or on behalf of the client, the description and

amounts of charges or withdrawals, the names of all persons or entities to

whom such funds were disbursed, and the dates of all deposits, transfers,

withdrawals and disbursements.

(3) The records required by this [rule] Rule may be maintained in

[electronic or] hard copy form[.] or by electronic, photographic, or other

media provided that the records otherwise comply with this Rule and that

printed copies can be produced. Whatever method is used to maintain

required records must have a backup so that the records are secure and

always available. If records are kept only in electronic form, then such records

shall be backed up [at least monthly] on a separate electronic storage device[.]

at least at the end of any day on which entries have been entered into the

records. These records shall be readily accessible to the lawyer and

available for production to the Pennsylvania Lawyers Fund for Client

Security or the Office of Disciplinary Counsel in a timely manner upon a

request or demand by either agency made pursuant to the Pennsylvania

Rules of Disciplinary Enforcement, the Disciplinary Board Rules, the

Pennsylvania Lawyers Fund for Client Security Board Rules and

Regulations, agency practice, or subpoena.

(4) A regular trial balance of the individual client trust ledgers

shall be maintained. The total of the trial balance must agree with the

control figure computed by taking the beginning balance, adding the total

of moneys received in trust for the client, and deducting the total of all

moneys disbursed. On a monthly basis, a lawyer shall conduct a

reconciliation for each fiduciary account. The reconciliation is not

complete if the reconciled total cash balance does not agree with the total

of the client balance listing. A lawyer shall preserve for a period of five

years copies of all records and computations sufficient to prove

compliance with this requirement.

***

(g) The responsibility for identifying an account as a Trust Account shall be

that of the lawyer in whose name the account is held. Only a lawyer admitted to

practice law in this jurisdiction or a person under the direct supervision of the

lawyer shall be an authorized signatory or authorize transfers from a Trust

Account or any other account in which Fiduciary Funds are held pursuant to Rule

1.15(l).

***

Comment:

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[2] A lawyer should maintain on a current basis books and records in

accordance with sound accounting practices consistently applied and comply with any

recordkeeping rules established by law or court order, including those records identified

in paragraph (c). With little exception, funds belonging to a client or third party

must be deposited into a Trust Account as defined in paragraph (a)(11), and

funds belonging to the lawyer must be deposited in a business operating account

maintained pursuant to paragraph (j). Thus, unless the client gives informed

consent, confirmed in writing, to a different manner of handling funds advanced

by the client to cover fees and expenses, the lawyer must deposit those funds

into a Trust Account pursuant to paragraph (i). If the lawyer pools such funds

belonging to more than one client, under paragraph (c)(2) the lawyer must keep a

ledger for each individual client, regularly recording all funds received from the

client and their purpose, and all disbursements of earned fees and expenses

incurred. As fees become earned, the lawyer must promptly transfer those funds

to the operating account. If the lawyer pools client funds after settlement or

verdict in a single Trust Account, the lawyer must maintain a ledger of receipts

and disbursements for each individual client, regularly recording the dates of

each transaction, the identity of payors and payees, and the purpose of each

disbursement, withdrawal or transfer of funds. The requirement of monthly

reconciliations should deter situations where an attorney’s Trust Account

contains a shortfall for any significant period of time. Additionally, if a lawyer

fails to maintain the records identified in paragraph (c) or to perform the required

monthly reconciliations, later claims by the lawyer that a shortfall (i.e.,

misappropriation) resulted from negligence, even if credible, will necessarily be

balanced against the lawyer’s abdication of responsibility to comply with

essential requirements associated with acting as a fiduciary and serving in a

position of trust. The failure to maintain or timely produce the records required

by paragraph (c) hampers rule-mandated or agency-promulgated investigative

inquiries by the Pennsylvania Lawyers Fund for Client Security and the Office of

Disciplinary Counsel and may serve as a basis for emergency temporary

suspension of the lawyer’s license to practice law. See Pa.R.D.E. 208(f)(1),

208(f)(5), 213(g)(2) and 221(g)(3).

***

Rule 5.7 Responsibilities Regarding Nonlegal Services

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Comment:

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Providing Nonlegal Services that Are Not Distinct from Legal Services

[3] Under some circumstances, the legal and nonlegal services may be so

closely entwined that they cannot be distinguished from each other. In this situation,

confusion by the recipient as to when the protection of the client-lawyer relationship

applies [are] is likely to be unavoidable. Therefore, Rule 5.7(a) requires that the lawyer

providing the nonlegal services adhere to all of the requirements of the Rules of

Professional Conduct.

[4] In such a case, a lawyer will be responsible for assuring that both the

lawyer’s conduct and, to the extent required by Rule 5.3, that of nonlawyer employees,

comply in all respects with the Rules of Professional Conduct. When a lawyer is obliged

to accord the recipients of such nonlegal services the protection of those Rules that

apply to the client-lawyer relationship, the lawyer must take special care to heed the

proscriptions of the Rules addressing conflict of interest (Rules 1.7 through 1.11,

especially Rules 1.7(b) and 1.8(a), (b) and (f)), and to scrupulously adhere to the

requirements of Rule 1.6 relating to disclosure of confidential information. The

promotion of the nonlegal services must also in all respects comply with Rule 5.8

relating to prohibitions and restrictions on dealing in investment products, and

with Rules 7.1 through 7.3, dealing with advertising and solicitation.

***

Rule 5.8 Dealing in Investment Products: Prohibitions and Restrictions

(a) A lawyer shall not broker, offer to sell, sell, or place any investment

product unless separately licensed to do so.

(b) A lawyer shall not recommend or offer an investment product to a

client or any person with whom the lawyer has a fiduciary relationship, or invest

funds belonging to such a person in an investment product, if the lawyer or a

person related to the lawyer:

(1) has an interest in compensation paid or provided by a person

other than the client or person with whom the lawyer has a fiduciary

relationship; or

(2) has an ownership interest in the entity that sponsors, insures,

underwrites, manages, or issues the investment product.

(1) the term “investment product” includes: an annuity contract;

a life insurance contract; a commodity; a swap; an investment fund,

including but not limited to a collective trust fund, a common trust fund, a

real estate investment fund, and registered investment company; a

security, whether or not the security is registered with any federal or state

securities regulator; or an investment adviser’s, bank’s, trust company’s,

insurance company’s, or other financial institution’s service as an

investment manager or investment adviser;

(2) “person related to the lawyer” includes a spouse, child,

grandchild, parent, grandparent or other relative or individual with whom

the lawyer maintains a close familial relationship; and

(3) the term “ownership interest” does not include shares of an

issuer that has registered the shares under federal securities laws, the

issuer’s shares are traded on a securities exchange that is registered under

federal securities laws, and the lawyer’s aggregate interest in shares of all

classes is less than one percent of the issuer’s outstanding common

shares.

Comment:

[1] Paragraph (a) prohibits a lawyer from brokering, offering to sell,

selling, or placing any investment product, as defined in paragraph (c)(1), unless

separately licensed to do so. Licensing and registration requirements vary by

state. Before offering or selling any investment product in relation to the

provision of legal services, a lawyer must consult all applicable federal and state

laws to determine eligibility, licensing and regulatory requirements. Paragraph

(a) neither addresses the giving of investment advice nor is intended to supplant

or otherwise affect federal and state laws that either require licensing and

registration in order to give investment advice or exempt lawyers from their

regulatory scheme.

[2] Paragraph (b) prohibits investment situations that are fraught with a

potential for a conflict of interest or that provide an opportunity for the lawyer to

control or unduly influence the use or management of the funds throughout the

course of the investment. Clients who place their trust in their lawyer and

assume or expect that the lawyer will protect them from harm are likely to feel

deceived if substantial sums of money are lost on investments pursued at the

lawyer’s recommendation or prompting and the lawyer or a person related to the

lawyer either receives compensation or a pecuniary benefit from a person other

than the client or has an ownership interest in the entity that sponsors, insures,

underwrites, manages, or issues the investment product, even when the reason

for the loss is limited to unexpected market conditions. The prohibition of

paragraph (b) is not imputed to other lawyers in the lawyer’s firm or those

lawyers’ relatives.

[3] This Rule applies to a lawyer under any circumstance—whether the

lawyer is providing legal services, nonlegal services that are not distinct from

legal services, or nonlegal services that are distinct from legal services. See Rule

5.7(e) for the meaning of the term “nonlegal services.” The prohibition of

paragraph (b) is in addition to the restrictions imposed by Rules 1.7(a)(2), 1.8(a)

and 5.7.

Annex B

Rule 208. Procedure.

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(f) Emergency temporary suspension orders and related relief.

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(5) The Board on its own motion, or upon the petition of Disciplinary

Counsel, may issue a rule to show cause why the respondent-attorney should

not be placed on temporary suspension whenever it appears that the

respondent-attorney has disregarded an applicable provision of the Enforcement

Rules, failed to maintain or produce the records required to be maintained

and produced under Pa.R.P.C. 1.15(c) and subdivisions (e) and (g) of

Enforcement Rule 221 in response to a request or demand authorized by

Enforcement Rule 221(g) or any provision of the Disciplinary Board Rules,

[refused] failed to comply with a valid subpoena, or engaged in other conduct

that in any such instance materially delays or obstructs the conduct of a

proceeding under these rules. The rule to show cause shall be returnable within

[30] ten days. If the response to the rule to show cause raises issues of fact, the

[Chairman of the] Board Chair may direct that a hearing be held before a

member of the Board who shall submit a report to the Board upon the conclusion

of the hearing. If the period for response to the rule to show cause has passed

without a response having been filed, or after consideration of any response and

any report of a Board member following a hearing under this paragraph, the

Board may recommend to the Supreme Court that the respondent-attorney be

placed on temporary suspension. The recommendation of the Board shall be

reviewed by the Supreme Court as provided in subdivision (e) of this rule[.],

although the time for either party to file with the Court a petition for review

of the recommendation or determination of the Board shall be fourteen

days after the entry of the Board’s recommendation or determination, and

any answer or responsive pleading shall be filed within ten days after

service of the petition for review.

***

Rule 213. Subpoena power, depositions and related matters.

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(d) Challenges; appeal of challenges to subpoena. Any attack on the

validity of a subpoena issued under this rule shall be handled as follows:

(1) A challenge to a subpoena authorized by subdivision (a)(1) shall be

heard and determined by the hearing committee or special master before whom

the subpoena is returnable in accordance with the procedure established by

the Board. See D.Bd. Rules § 91.3(b) (relating to procedure).

(2) A challenge to a subpoena authorized by subdivision (a)(2) shall be

heard and determined by a member of a hearing committee in the disciplinary

district in which the subpoena is returnable in accordance with the procedure

established by the Board. See D.Bd. Rules § 91.3(b) (relating to procedure).

(3) A determination under paragraph (1) or (2) may [not] be appealed

to a lawyer-Member of the Board[, but may be appealed to the Supreme

Court under subdivision (g)] within ten days after service pursuant to D.Bd.

Rules §§ 89.21 and 89.24 of the determination on the party bringing the appeal

by filing a petition with the Board setting forth in detail the grounds for

challenging the determination. The appealing party shall serve a copy of

the petition on the non-appealing party by mail on the date that the

appealing party files the appeal, and the non-appealing party shall have five

business days after delivery to file a response. No attack on the validity of

a subpoena will be considered by the Designated lawyer-Member of the

Board unless previously raised before the hearing committee. The Board

Member shall decide the appeal within five business days of the filing of

the non-appealing party’s response, if any. There shall be no right of

appeal to the Supreme Court. Any request for review shall not serve to

stay any hearing or proceeding before the hearing committee or the Board

unless the Court enters an order staying the proceedings.

***

(g) Enforcement of subpoenas[; appeal of challenges to subpoenas].

(1) Either Disciplinary Counsel or a respondent-attorney may petition

the Supreme Court to enforce a subpoena [or to review a determination under

subdivision (d)(1) or (2) on the validity of a subpoena. No attack on the

validity of a subpoena will be considered by the Court unless previously

raised as provided in subdivision (d)] that was not the subject of a

challenge pursuant to subdivision (d)(1) or (2), or that was the subject of a

challenge and has not been finally quashed by either the hearing

committee or the Board Member designated to hear the appeal, provided

that the party filing the petition to enforce attaches a certification in good

faith that: a) the party exhausted reasonable efforts to secure the presence

of the witness or the evidence within the witness’s custody or control, b)

the testimony, records or other physical evidence of the witness will not be

cumulative of other evidence available to the party, and c) the absence of

the witness will substantially handicap the party from prosecuting or

defending the charges, or from establishing a weighty aggravating or

mitigating factor. If the object of a petition to enforce is a subpoena

directed to the respondent-attorney for, in whole or in part, production

pursuant to Enforcement Rule 221(g)(2) of required records under

Pa.R.P.C. 1.15(c) and Enforcement Rule 221(e), no certification will be

required for the subpoena or portion thereof that pertains to the required

records. See also Enforcement Rule 208(f)(5) (relating to emergency temporary

suspension orders and related relief).

Note: The reference to Enforcement Rule 208(f)(5) is intended

to make clear that, where the person who is resisting

complying with a subpoena is the respondent-attorney, the

provisions of this rule are cumulative of those in Enforcement

Rule 208(f)(5).

(2) Upon receipt of a petition for enforcement of a subpoena, the Court

shall issue a rule to show cause upon the person to whom the subpoena is

directed, returnable within ten days, why the person should not be held in

contempt. If the subpoena is directed to a respondent-attorney for

production of required records and the respondent-attorney has not

produced the records, the Court shall issue upon the respondent-attorney

a rule to show cause why the respondent-attorney should not be placed on

temporary suspension for failing to produce the records. If the period for

response has passed without a response having been filed, or after consideration

of any response, the Court shall issue an appropriate order.

[(3) A petition for review of a determination made under

subdivision (d)(1) or (2) must set forth in detail the grounds for challenging

the determination. Upon timely receipt of a petition for review, the Court

shall issue a rule to show cause upon the party to the proceeding who is

not challenging the determination, returnable within ten days, why the

determination should not be reversed. If the period for response has

passed without a response having been filed, or after consideration of any

response, the Court shall issue an appropriate order.]

***

Rule 215. Discipline on Consent

(a) Voluntary resignation. – An attorney who is the subject of an investigation

into allegations of misconduct by the attorney may submit a resignation, but only by

delivering to Disciplinary Counsel or the Secretary of the Board a verified statement

stating that the attorney desires to resign and that:

(1) the resignation is freely and voluntarily rendered; the attorney is not

being subjected to coercion or duress; the attorney is fully aware of the

implications of submitting the resignation; and whether or not the attorney has

consulted or followed the advice of counsel in connection with the decision to

resign;

(2) the attorney is aware that there is presently pending investigation

into allegations that the attorney has been guilty of misconduct the nature of

which the verified statement shall specifically set forth;

(3) the attorney acknowledges that the material facts upon which the

complaint is predicated are true; [and]

(4) the resignation is being submitted because the attorney knows that

if charges were predicated upon the misconduct under investigation the attorney

could not successfully defend against them[.];

(5) the attorney is fully aware that the submission of the

resignation statement is irrevocable and that the attorney can only apply

for reinstatement to the practice of law pursuant to the provisions of

Enforcement Rule 218(b) and (c);

(6) the attorney is aware that pursuant to subdivision (c) of this

Rule, the fact that the attorney has tendered his or her resignation shall

become a matter of public record immediately upon delivery of the

resignation statement to Disciplinary Counsel or the Secretary of the

Board;

(7) upon entry of the order disbarring the attorney on consent, the

attorney will promptly comply with the notice, withdrawal, resignation, trust

accounting, and cease-and-desist provisions of subdivisions (a), (b), (c)

and (d) of Enforcement Rule 217;

(8) after the entry of the order disbarring the attorney on consent,

the attorney will file a verified statement of compliance as required by

subdivision (e)(1) of Enforcement Rule 217; and

(9) the attorney is aware that the waiting period for eligibility to

apply for reinstatement to the practice of law under Enforcement Rule

218(b) shall not begin until the attorney files the verified statement of

compliance required by Enforcement Rule 217(e)(1), and if the order of

disbarment contains a provision that makes the disbarment retroactive to

an earlier date, then the waiting period will be deemed to have begun on

that earlier date.

(b) Order of disbarment. – Upon receipt of the required statement, the

Secretary of the Board shall file it with the Supreme Court and the Court shall enter an

order disbarring the attorney on consent.

submitted a resignation statement to Disciplinary Counsel or the Secretary of the

Board for filing with the Supreme Court shall become a matter of public record

immediately upon delivery of the resignation statement to Disciplinary Counsel or

the Secretary of the Board. The order disbarring the attorney on consent shall be a

matter of public record. If the statement required under the provisions of subdivision (a)

of this rule is submitted before the filing and service of a petition for discipline and the

filing of an answer or the time to file an answer has expired, the statement shall not be

publicly disclosed or made available for use in any proceeding other than a subsequent

reinstatement proceeding except:

(1) upon order of the Supreme Court,

(2) pursuant to an express written waiver by the attorney,

(3) upon a request of another jurisdiction for purposes of a reciprocal

disciplinary proceeding,

(4) upon a request by the Pennsylvania Lawyers Fund for Client

Security Board pursuant to Enforcement Rule 521(a) (relating to cooperation with

Disciplinary Board), or

(5) when the resignation is based on an order of temporary suspension

from the practice of law entered by the Court either pursuant to Enforcement

Rule 208(f)(1) (relating to emergency temporary suspension orders and related

relief) or pursuant to Enforcement Rule 214 (relating to attorneys convicted of

crimes).

***

Rule 217. Formerly admitted attorneys.

(a) A formerly admitted attorney shall promptly notify, or cause to be

promptly notified, [by registered or certified mail, return receipt requested,] all

clients being represented in pending matters, other than litigation or administrative

proceedings, of the disbarment, suspension, administrative suspension or transfer to

inactive status and the consequent inability of the formerly admitted attorney to act as

an attorney after the effective date of the disbarment, suspension, administrative

suspension or transfer to inactive status and shall advise said clients to seek legal

advice elsewhere. The notice required by this subdivision (a) may be delivered by

the most efficient method possible as long as the chosen method is successful

and provides proof of receipt. At the time of the filing of the verified statement of

compliance required by subdivision (e)(1) of this Rule, the formerly admitted

attorney shall file copies of the notices required by this subdivision and proofs of

receipt with the Secretary of the Board and shall serve a conforming copy on the

Office of Disciplinary Counsel. See D.Bd. Rules § 91.91(b) (relating to filing of

copies of notices).

Note: Notice may be accomplished, for example, by delivery

in person with the lawyer securing a signed receipt,

electronic mailing with some form of acknowledgement from

the client other than a “read receipt,” and mailing by

registered or certified mail, return receipt requested.

(b) A formerly admitted attorney shall promptly notify, or cause to be

promptly notified, [by registered or certified mail, return receipt requested,] all

clients who are involved in pending litigation or administrative proceedings, and the

attorney or attorneys for each adverse party in such matter or proceeding, of the

disbarment, suspension, administrative suspension or transfer to inactive status and

consequent inability of the formerly admitted attorney to act as an attorney after the

effective date of the disbarment, suspension, administrative suspension or transfer to

inactive status. The notice to be given to the client shall advise the prompt substitution

of another attorney or attorneys in place of the formerly admitted attorney. In the event

the client does not obtain substitute counsel before the effective date of the disbarment,

suspension, administrative suspension or transfer to inactive status, it shall be the

responsibility of the formerly admitted attorney to move in the court or agency in which

the proceeding is pending for leave to withdraw. The notice to be given to the attorney

or attorneys for an adverse party shall state the place of residence of the client of the

formerly admitted attorney. The notice required by this subdivision (b) may be

delivered by the most efficient method possible as long as the chosen method is

successful and provides proof of receipt. See Note after subdivision (a), supra.

At the time of the filing of the verified statement of compliance required by

subdivision (e)(1) of this Rule, the formerly admitted attorney shall file copies of

the notices required by this subdivision and proofs of receipt with the Secretary

of the Board and shall serve a conforming copy on the Office of Disciplinary

Counsel. See D.Bd. Rules § 91.92(b) (relating to filing of copies of notices).

promptly notified, of the disbarment, suspension, administrative suspension or transfer

to inactive status[, by registered or certified mail, return receipt requested]:

(1) all persons or their agents or guardians, including but not limited

to wards, heirs and beneficiaries, to whom a fiduciary duty is or may be owed

at any time after the disbarment, suspension, administrative suspension or

transfer to inactive status[, and];

(2) all other persons with whom the formerly admitted attorney may at

any time expect to have professional contacts under circumstances where there

is a reasonable probability that they may infer that he or she continues as an

attorney in good standing[.]; and

(3) any other tribunal, court, agency or jurisdiction in which the

attorney is admitted to practice.

The notice required by this subdivision (c) may be delivered by the most efficient

method possible as long as the chosen method is successful and provides proof

of receipt. See Note after subdivision (a), supra. At the time of the filing of the

verified statement of compliance required by subdivision (e)(1) of this Rule, the

formerly admitted attorney shall file copies of the notices required by this

subdivision and proofs of receipt with the Secretary of the Board and shall serve

a conforming copy on the Office of Disciplinary Counsel. The responsibility of the

formerly admitted attorney to provide the notice required by this subdivision shall

continue for as long as the formerly admitted attorney is disbarred, suspended,

administratively suspended or on inactive status.

(d) (1) Orders imposing suspension, disbarment, administrative suspension or

transfer to inactive status shall be effective 30 days after entry. The formerly admitted

attorney, after entry of the disbarment, suspension, administrative suspension or

transfer to inactive status order, shall not accept any new retainer or engage as attorney

for another in any new case or legal matter of any nature. However, during the period

from the entry date of the order and its effective date the formerly admitted attorney may

wind up and complete, on behalf of any client, all matters which were pending on the

entry date.

(2) In addition to the steps that a formerly admitted attorney must

promptly take under other provisions of this Rule to disengage from the practice

of law, a formerly admitted attorney shall promptly cease and desist from using

all forms of communication that expressly or implicitly convey eligibility to

practice law in the state courts of Pennsylvania, including but not limited to

professional titles, letterhead, business cards, signage, websites, and references

to admission to the Pennsylvania Bar.

(3) In cases of disbarment, suspension for a period exceeding one year,

temporary suspension under Enforcement Rule 208(f) or 213(g), or disability

inactive status under Enforcement Rule 216 or 301, a formerly admitted attorney

shall also promptly:

(i) resign all appointments as personal representative, executor,

administrator, guardian, conservator, receiver, trustee, agent under a

power of attorney, or other fiduciary position;

(ii) close every IOLTA, Trust, client and fiduciary account;

(iii) properly disburse or otherwise transfer all client and fiduciary

funds in his or her possession, custody or control; and

(iv) take all necessary steps to cancel or discontinue the next

regular publication of all advertisements and telecommunication listings

that expressly or implicitly convey eligibility to practice law in the state

courts of Pennsylvania.

The formerly admitted attorney shall maintain records to demonstrate compliance

with the provisions of paragraphs (2) and (3) and shall provide proof of

compliance at the time the formerly admitted attorney files the verified statement

required by subdivision (e)(1) of this Rule.

Note: Paragraph (d)(3)(i) does not preclude a respondent-

attorney who voluntarily assumes inactive or retired status, is

placed on administrative suspension, is temporarily

suspended under Enforcement Rule 214, or is suspended for

one year or less, from completing existing appointments and

accepting new appointments of the nature identified in

paragraph (d)(3)(i). Nonetheless, in order to comply with

subdivisions (a), (b) and (c) of this Rule, the formerly admitted

attorney who desires to complete existing appointments or

accept future appointments must give written notice of the

formerly admitted attorney’s registration status or change in

that status to appointing and supervising judges and courts,

wards, heirs, beneficiaries, interested third parties, and other

recipients of the formerly admitted attorney’s fiduciary

services, as notice of the formerly admitted attorney’s other-

than-active status gives all interested parties an opportunity to

consider replacing the formerly admitted attorney or enlisting

a person other than the formerly admitted attorney to serve as

the fiduciary in the first instance. Although the formerly

admitted attorney would not be precluded by paragraph

(d)(3)(ii) from continuing to use a fiduciary account registered

with the bank as an IOLTA or Trust Account, paragraph (2) of

subdivision (d) and paragraph (4)(iv) of subdivision (j) of this

Rule prohibit the formerly admitted attorney from using or

continuing to use account checks and deposit slips that

contain the word “IOLTA,” “attorney,” “lawyer,” “esquire,” or

similar appellation that could convey eligibility to practice in

the state courts of Pennsylvania. Notwithstanding the specific

prohibitions of subdivision (j) of this Rule, the formerly

admitted attorney is authorized to perform those services

necessary to carry out the appointment with the exception of

any service that would constitute the unauthorized practice of

law if engaged in by a nonlawyer. In relation to formerly

admitted attorneys who are disbarred, suspended for a period

exceeding one year, temporarily suspended under

Enforcement Rule 208(f) or 213(g), or transferred to disability

inactive status, the requirements of paragraph (d)(3) continue

throughout the term of the disbarment, suspension, temporary

suspension, or disability inactive status, thereby precluding

any new appointment or engagement.

(e) (1) Within ten days after the effective date of the disbarment, suspension,

administrative suspension or transfer to inactive status order, the formerly admitted

attorney shall file with the Secretary of the Board a verified statement [showing] and

serve a copy on Disciplinary Counsel. In the verified statement, the formerly

admitted attorney shall:

[(1)] (i) aver that the provisions of the order and these rules have been

fully complied with; [and]

[(2)] (ii) list all other state, federal and administrative jurisdictions to

which [such person] the formerly admitted attorney is admitted to practice[.

Such statement shall also set forth the residence or other address of the

formerly admitted attorney where communications to such person may

thereafter be directed.], aver that he or she has fully complied with the

notice requirements of paragraph (3) of subdivision (c) of this Rule, and

aver that he or she has attached copies of the notices and proofs of receipt

required by (c)(3); or, in the alternative, aver that he or she was not

admitted to practice in any other tribunal, court, agency or jurisdiction;

(iii) aver that he or she has attached copies of the notices required

by subdivisions (a), (b), and (c)(1) and (c)(2) of this Rule and proofs of

receipt, or, in the alternative, aver that he or she has no clients, third

persons to whom a fiduciary duty is owed, or persons with whom the

formerly admitted attorney has professional contacts, to so notify;

(iv) in cases of disbarment or suspension for a period exceeding

one year, aver that he or she has attached his or her attorney registration

certificate for the current year, certificate of admission, any certificate of

good standing issued by the Prothonotary, and any other certificate

required by subdivision (h) of this Rule to be surrendered; or, in the

alternative, aver that he or she has attached all such documents within his

or her possession, or that he or she is not in possession of any of the

certificates required to be surrendered;

(v) aver that he or she has complied with the requirements of

paragraph (2) of subdivision (d) of this Rule, and aver that he or she has, to

the extent practicable, attached proof of compliance, including evidence of

the destruction, removal, or abandonment of indicia of Pennsylvania

practice; or, in the alternative, aver that he or she neither had nor employed

any indicia of Pennsylvania practice;

(vi) in cases of disbarment, suspension for a period exceeding one

year, temporary suspension under Enforcement Rule 208(f) or 213(g), or

disability inactive status under Enforcement Rule 216 or 301, aver that he

or she has complied with the requirements of paragraph (3) of subdivision

(d) of this Rule, and aver that he or she has attached proof of compliance,

including resignation notices, evidence of the closing of accounts, copies

of cancelled checks and other instruments demonstrating the proper

distribution of client and fiduciary funds, and requests to cancel

advertisements and telecommunication listings; or, in the alternative, aver

that he or she has no applicable appointments, accounts, funds.

advertisements, or telecommunication listings;

(vii) aver that he or she has served a copy of the verified statement

and its attachments on the Office of Disciplinary Counsel;

(viii) set forth the residence or other address where

communications to such person may thereafter be directed; and

(ix) sign the statement.

The statement shall contain an averment that all statements contained therein are

true and correct to the best of the formerly admitted attorney’s knowledge,

information and belief, and are made subject to the penalties of 18 Pa.C.S. § 4904

relating to unsworn falsification to authorities.

Note: A respondent-attorney who is placed on

temporary suspension is required to comply with

subdivision (e)(1) and file a verified statement. Upon the

entry of a final order of suspension or disbarment, the

respondent-attorney must file a supplemental verified

statement containing the information and

documentation not applicable at the time of the filing of

the initial statement, or all of the information and

documentation required by subdivision (e)(1) if the

respondent-attorney has failed to file the initial

statement. Although the grant of retroactivity is always

discretionary, a respondent-attorney who fails to file a

verified statement at the time of temporary suspension

should not expect a final order to include a reference to

retroactivity.

(2) A formerly admitted attorney shall cooperate with Disciplinary

Counsel and respond completely to questions by Disciplinary Counsel regarding

compliance with the provisions of this Rule.

(3) After the entry of an order of disbarment or suspension for a period

exceeding one year, the waiting period for eligibility to apply for reinstatement to

the practice of law shall not begin until the formerly admitted attorney files the

verified statement required by subdivision (e)(1) of this Rule. If the order of

disbarment or suspension contains a provision that makes the discipline

retroactive to an earlier date, the waiting period will be deemed to have begun on

that earlier date.

Note: This subdivision (e)(3) and the corresponding

provisions in subdivision (b) of Enforcement Rule 218

apply only to orders entered on or after , the

effective date of this subdivision and the corresponding

Enforcement Rule 218 provisions.

(Editor's Note: The blank refers to the effective date of adoption of this proposed

rulemaking.)

(f) The Board shall cause a notice of the suspension, disbarment,

administrative suspension or transfer to inactive status to be published in the legal

journal and a newspaper of general circulation in the county in which the formerly

admitted attorney practiced. The cost of publication shall be assessed against the

formerly admitted attorney.

***

Rule 218. Reinstatement.

***

(b) A person who has been disbarred may not apply for reinstatement until

the expiration of at least five years from the effective date of the disbarment, except that

a person who has been disbarred pursuant to Enforcement Rule 216 (relating to

reciprocal discipline and disability) may apply for reinstatement at any earlier date on

which reinstatement may be sought in the jurisdiction of initial discipline. Pursuant to

Enforcement Rule 217(e)(3), the waiting period for eligibility to apply for

reinstatement to the practice of law shall not begin until the person files the

verified statement required by subdivision (e)(1) of Enforcement Rule 217. If the

order of disbarment contains a provision that makes the disbarment retroactive

to an earlier date, the waiting period will be deemed to have begun on that earlier

date. (See Note after Enforcement Rule 217(e)(3) for effective date of provisions

relating to commencement of waiting period for eligibility to apply for

reinstatement.)

***

Rule 219. Annual registration of attorneys.

***

(d) On or before July 1 of each year all attorneys required by this rule to pay

an annual fee shall file with the Attorney Registration Office a signed or electronically

endorsed form prescribed by the Attorney Registration Office in accordance with the

following procedures:

(1) The form shall set forth:

(i) The date on which the attorney was admitted to practice,

licensed as a foreign legal consultant, granted limited admission as an

attorney participant in defender and legal services programs pursuant to

Pa.B.A.R. 311, or issued a Limited In-House Corporate Counsel License,

and a list of all courts (except courts of this Commonwealth) and

jurisdictions in which the person has ever been licensed to practice law,

with the current status thereof.

(ii) The current residence and office addresses of the attorney,

each of which shall be an actual street address or rural route box number,

and the Attorney Registration Office shall refuse to accept a form that sets

forth only a post office box number for either required address. A preferred

mailing address different from those addresses may also be provided on

the form and may be a post office box number. The attorney shall indicate

which of the addresses, the residence, office or mailing address, as well

as telephone and fax number will be accessible through the website of the

Board (http://www.padisciplinaryboard.org/) and by written or oral request

to the Board. Upon an attorney’s written request submitted to the Attorney

Registration Office and for good cause shown, the contact information

provided by the attorney will be nonpublic information and will not be

published on the Board’s website or otherwise disclosed.

Note: Public web docket sheets will show the

attorney’s address as entered on the court

docket.

(iii) The name of each [f]Financial [i]Institution, as defined in

Pa.R.P.C. 1.15(a)(4), [in] within or outside this Commonwealth in which

the attorney on May 1 of the current year or at any time during the

preceding 12 months held funds of a client or a third person subject to

Rule 1.15 of the Pennsylvania Rules of Professional Conduct. The form

shall include the name and account number for each account in which the

[lawyer] attorney [holds] held such funds, and each IOLTA Account

shall be identified as such. The form provided to a person holding a

Limited In-House Corporate Counsel License or a Foreign Legal

Consultant License need not request the information required by this

subparagraph.

Note: If an attorney employed by a law firm receives

fiduciary funds from or on behalf of a client and

deposits or causes the funds to be deposited into a law

firm account, the attorney must report the account of

deposit under this subparagraph.

(iv) Every account not reported under subparagraph (iii),

that held funds of a client or third party, and over which the attorney

had sole or shared signature authority or authorization to transfer

funds to or from the account, during the same time period specified

in subparagraph (iii). For each account, the attorney shall provide

the name of the financial institution (whether or not the entity

qualifies as a “Financial Institution” under Pa.R.P.C. 1.15(a)(4)),

location, and account number.

(v) Every business operating account maintained or utilized

by the attorney in the practice of law during the same time period

specified in subparagraph (iii). For each account, the attorney shall

provide the name of the financial institution, location and account

number.

[(iv)](vi) A statement that the attorney is familiar and in compliance

with Rule 1.15 of the Pennsylvania Rules of Professional Conduct

regarding the handling of funds and other property of clients and others

and the maintenance of IOLTA Accounts, and with Rule 221 of the

Pennsylvania Rules of Disciplinary Enforcement regarding the mandatory

reporting of overdrafts on fiduciary accounts.

[(v)](vii) A statement that any action brought against the attorney

by the Pennsylvania Lawyers Fund for Client Security for the recovery of

monies paid by the Fund as a result of claims against the attorney may be

brought in the Court of Common Pleas of Allegheny, Dauphin or

Philadelphia County.

[(vi)](viii) Whether the attorney is covered by professional liability

insurance on the date of registration in the minimum amounts required by

Rule of Professional Conduct 1.4(c). Rule 1.4(c) does not apply to

attorneys who do not have any private clients, such as attorneys in full-

time government practice or employed as in-house corporate counsel.

Note: The Disciplinary Board will make the information

regarding insurance available to the public upon written or

oral request and on its website. The requirement of Rule

219(d)(3) that every attorney who has filed an annual fee

form or elects to file the form electronically must notify the

Attorney Registration Office of any change in the information

previously submitted within 30 days after such change will

apply to the information regarding insurance.

[(vii)](ix) Such other information as the Attorney Registration

Office may from time to time direct.

***

Rule 221. Funds of clients and third persons. Mandatory overdraft notification.

***

(e) An attorney shall maintain and preserve for a period of five years after

termination of the client-lawyer or Fiduciary relationship or after distribution or

disposition of the property, whichever is later, the writing required by Pa.R.P.C.

1.5 (relating to the requirement of a writing communicating the basis or rate of the

fee), the records identified in Pa.R.P.C. 1.5(c) (relating to the requirement of a

written fee agreement and distribution statement in a contingent fee matter), and

the following books and records for each Trust Account and for any other account in

which Rule 1.15 Funds are held:

(1) all transaction records provided to the attorney by the Financial

Institution, such as periodic statements, canceled checks in whatever form,

deposited items and records of electronic transactions; and

(2) check register or separately maintained ledger, which shall include

the payee, date, purpose and amount of each check, withdrawal and transfer,

the payor, date, and amount of each deposit, and the matter involved for each

transaction[.]; provided, however, that where an account is used to hold

funds of more than one client, a lawyer shall also maintain an individual

ledger for each trust client, showing the source, amount and nature of all

funds received from or on behalf of the client, the description and amounts

of charges or withdrawals, the names of all persons or entities to whom

such funds were disbursed, and the dates of all deposits, transfers,

withdrawals and disbursements.

(3) A regular trial balance of the individual client trust ledgers