It is incumbent upon the attorney or law firm to determine whether the amount of interest an account will generate will justify the cost of opening and maintaining the account for the client. If the attorney can earn interest for the client, the attorney must do so. In deciding what benchmark rate of interest a separate client trust account could earn, the attorney may, but is not required to, consider all costs associated with such an account. However, attorneys are reminded that they may, if they choose, bear all costs associated with the account so that the client may earn net interest.

Several cost factors that may be considered in this determination include:

Internal costs:

1. The expense of the attorney's or law firm's staff time in establishing a separate account
2. The preparation and filing of tax forms relating to the IRS (e.g., IRS 1099 forms)
3. The bookkeeping and accounting expenses for tracking the account
4. The monthly reconciliation of the account for the client
5. Closing the account at the bank and remitting the funds to the client

External costs:

1. The minimum balance requirement at the bank at which the account is placed
2. The service charges, if any, assessed against the account by the bank
3. Other additional fees that the bank may have for investment policies

After an approximation of these costs has been made, this amount becomes the benchmark amount of interest. If a particular client's funds earn that benchmark figure, then the money must be placed in a separate account for the client.

Principal Deposit: $1,000
Number of days required to generate $100 of interest at .80% compounded daily: 4,565

Principal Deposit: $3,000
Number of days required to generate $100 of interest at .80% compounded daily: 1,522

Principal Deposit: $5,000
Number of days required to generate $100 of interest at .80% compounded daily: 915

Principal Deposit: $10,000
Number of days required to generate $100 of interest at .80% compounded daily: 385

Principal Deposit: $50,000
Number of days required to generate $100 of interest at .80% compounded daily: 92

Principal Deposit: $75,000
Number of days required to generate $100 of interest at .80% compounded daily: 62

Principal Deposit: $100,000
Number of days required to generate $100 of interest at .80% compounded daily: 46

Recent News

July 20, 2010

Texas Rep. Pete P. Gallego Honored with Texas Access to Justice Legislative Hero Award

June 30, 2010

New booklet "A Lawyer's Guide to Client Trust Accounts" created by Office of Chief Disciplinary Counsel helps address common questions.

May 11, 2010

Tyler Banks Recognized for Supporting Legal Services to the Poor

May 5, 2010

Texas Access to Justice Commission Raises Funds for Legal Services for Veterans

Apr. 27, 2010

League of Women Voters of Texas Receives Star of Justice Award for Access to Justice Efforts

Apr. 19, 2010

Access to Justice Commission Hosts Gala Benefiting Legal Services for Veterans

Apr. 13, 2010

"Going it Alone" an article on self-represented litigants on TexasTribune.org

Apr. 8, 2010

A blog post on Dallas Morning News about the Forum on self-represented litigants

Apr. 5, 2010

An op-ed by Chief Justice Jefferson & Commission Chair Reasoner on self-represented litigants appears in the Dallas Morning News, Fort Worth Star-Telegram and Houston Chronicle

Mar. 30, 2010

First Texas Forum on Self-Represented Litigants and the Courts to be held April 8-9 in Dallas

Mar. 12, 2010

Chief Justice Jefferson names Justice Hecht as new Foundation liaison

More news