All transactions involving lawyers inevitably come down to money. The money needed to buy a house, or received from the sale of a property; obtaining probate of an estate; money recovered through proceedings in Court; the lawyer’s own fees.

Lawyers often find themselves acting as banker for their clients, and their professional bodies have developed rules to protect clients and their money from those few members of the profession who unfortunately are either incompetent or crooked. These rules are rigorously enforced and failure to observe them can result in severe penalties.

Many people who pride themselves in keeping up to date with their rights as consumers when buying a washing machine or car, are unaware of their own rights and their lawyer´s obligations when they hand over thousands of euros or pounds to their lawyer.

The Code of Ethics for the Spanish Legal Profession (Royal Decree 658/2001) in Article 20 provides that clients´ money must deposited in a separate account at a bank or other recognized financial institution and kept separate from the lawyer´s own money or that of his firm and available to the client at all times. There is also a specific prohibition against confusing the funds belonging to different clients. Client´s money can only be used for the purposes authorized by the client.

To prevent money laundering, lawyers must know exactly who is providing them with funds.

Lawyers are not allowed to use client´s money for their own purposes, including payment of their own fees unless they have either the prior written agreement of the client or the client´s later permission. Article 17 of the Code gives lawyers the right to request advance provisions of funds but these must be reasonable in the context of the work in hand and the likely ultimate bill for the work. If clients fail to put their lawyers in funds the lawyer has the right to stop work or impose special terms on the client.

The Law Society of England and Wales first introduced Solicitors Accounts rules to regulate the way solicitors handled clients´ money in 1936. These rules have been developing ever since and the 2008 edition of the basic rules occupies 127 pages.

As in Spain, clients´ money must be paid into a “client account” at a bank or building society. The title of the account, the statements issued for that account , and cheques and other payment instruments issued by the solicitor from the account must state “Client”.

Again, the money must be available to the client, or other person entitled to the money at all times and any money due back to the client must be paid promptly.

A solicitor can only use the client´s money for purposes specifically authorized by the client or for payment of his own fees, provided that the client has either first received a bill, or prior written advice of the fees from the solicitor, or agreed a fee with the solicitor in writing.

Like a bank a solicitor must pay interest to his client at a reasonable rate. The amount and period for which a solicitor must pay interest to his client varies from a minimum of £1,000.00 held for 8 weeks or more up to £20,000.00 or more held for more than 1 week, provided that the amount of interest is more than £20.00.

Nowadays with internet banking and rapid international transfers, ask yourself if it necessary to deposit large sums of money with your lawyer or other intermediary so long as the funds are available when needed.

Lawyers´ codes of conduct try to strike a balance between the interests of the professionals and those of their clients so as to protect all parties; on the one hand the client´s hard earned money and on the other the lawyer´s most precious commodity, his time and expertise.

However, the watchword is “caution” when paying substantial amounts of money to any intermediary especially those who are not subject to any professional regulation. Do you know exactly who are you paying your money to? Who will be holding it? Where will it be held? Could you get it back?