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THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK
FORMAL OPINION 2002-2
DUTY TO PAY INTEREST ON CLIENT FUNDS
DIGEST: Where a lawyer has placed client funds in an interest-bearing escrow account, and the lawyer's retainer agreement does not address whether the lawyer must pay interest on client funds to the client, the lawyer must pay any interest earned on the funds to the client. If the lawyer cannot locate the client, the lawyer should deposit the client's funds with the Lawyers' Fund for Client Protection.
CODE: DR 9-102
QUESTION: If a lawyer has deposited client escrow funds in an interest-bearing account, and the retainer agreement does not address the lawyer's duty to pay interest to the client on such funds, may the lawyer retain the interest earned on these deposits?
1 Because DR 9-102(F) requires that monies owed to missing clients be deposited with the Lawyers' Fund for Client Protection, the lawyer's may not exercise discretion to deposit funds in an IOLA account under the circumstances presented here.