State Bar warns tens of thousands of attorneys to meet trust account deadline

The California State Bar said Monday that "tens of thousands" of attorneys have yet to comply with trust account reporting requirements ahead of an April 1 deadline. The Bar launched the Client Trust Account Protection Program in 2023 to prevent a repeat of the scandal in which attorney Thomas Girardi stole from client trust accounts for years before he was caught.

As of March 24, only 61% of licenses active attorneys had reported. This means that over 70,000 of the state's approximately 190,000 active attorneys have one week to meet the deadline.

The requirement replies to anyone who held an active bar license during 2024, "even if they do not handle client trust accounts," according to the email from the bar's office of communications. "Attorneys who do not receive or hold client funds meet the requirement by simply answering 'No' to the screening question then submitting their declaration."

"We urge all active licensees to take the time now to ensure they're in compliance with CTAPP requirements," said Steven Moawad, Special Counsel overseeing the Division of Regulation. "CTAPP compliance reporting is mandatory as part of the annual renewal cycle for all active licensees--even those working in firms, in-house, or in government roles."

Attorneys who miss the deadline may be charged a $103 late fee. The bar suspended around 2,000 attorneys who missed the original 2023 reporting requirement, though hundreds quickly reported and had their suspensions lifted.

An Illinois federal judge ruled in late 2020 that Girardi had improperly taken $2 million in client funds from family members of victims of a Boeing 737 in Indonesia. Over the next two years, the State Bar Board of Trustees created a committee to address the problem, and the California Supreme Court approved the new reporting rules for client accounts.