Practice News

Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. I am the managing partner with a 14 attorney firm in Chicago. We recently hired a new accounting manager/bookkeeper. While she has worked in a few other law firms these firms did not require her to manage a high volume trust account. Our firm has a high volume of transactions that flow through the firm's trust account. We have had problems in the past with prior bookkeepers and outside accountants that did not balance/manage our trust accounts properly. What suggestions do you have or resources do you suggest? A. Failure to properly manage, balance, and reconcile the firm trust account can be a major problem for law firms - from professional responsibility, accounting, and tax aspects. From a bookkeeping standpoint - failure to maintain a trust account sub-ledger for each client that has money in the trust account and insuring that all of the sub-ledgers balance and reconcile back to the trust account bank statement in the biggest problem that I see. You must do more than simply maintaining a checkbook journal register - you must have a sub-ledger for each client. If the firm reflects the trust bank account on it's balance sheet there should be either a contra asset account or a liability account reflecting the same amount reflected in the cash account. The total of all of the sub-ledgers should also equal the number in each of these two general ledger accounts. All should reconcile back to the trust account bank statement.

The Illinois Supreme Court announced on Monday a special committee to study and formulate proposals to help those facing the loss of their homes and improve the judicial process in mortgage foreclosures throughout Illinois. The proposal was brought to Chief Justice Thomas L. Kilbride and the Supreme Court by Supreme Court Justice Mary Jane Theis, who noted the problem isn’t easing. At the end of 2010, there were approximately 70,000 mortgage foreclosure actions pending in Cook County alone. Chief Justice Kilbride was instrumental in bringing a foreclosure mediation program to Will County and is looking at instituting additional programs in his Third Judicial District across north central Illinois. Cook County has a mediation program that was specifically recognized by the White House at a Washington D.C. conference sponsored by Vice President Joseph Biden’s Middle Class Task Force. “These have been important steps forward for those who are faced with the loss of their homes due to declining home values and our nation’s economic crisis, but the problem isn’t going away,” said Chief Justice Kilbride. “The Supreme Court has a keen interest in programs with the strong promise of achieving timely and lasting resolution to tough problems, and we believe this select Committee can come up with specific solutions to help families cope with the emotional and financial burdens of those facing such a devastating loss.” The Committee consists of 14 persons who have been on the front lines in dealing with the housing crisis, how it affects home-owning families as well as the lenders. They are judges, bankers, lawyers, a law professor and an official from the Illinois Attorney General’s office which has joined the nation’s other attorneys general in probing alleged abuses by lenders in their foreclosure filings “While the economy appears to be making some progress the foreclosure crisis remains a serious societal problem,” said Justice Theis. “It is important that the Court try to do what it can to lend some stability and certitude to what is a financially and emotionally chaotic process.  Mortgage foreclosure proceedings in Illinois need to be fair, efficient and final—not subject to later legal challenges. “Many homeowners in foreclosure cases cannot afford to hire a lawyer to represent them. They may not understand the proceedings against them and they don’t know if lenders have taken shortcuts by false documentation.  We need to provide protocols that are uniform and exist throughout the state to deal with the explosion of foreclosures that drive down property values and destabilize neighborhoods.”

U.S. Rep. Judy Biggert (R-IL-13th) of west suburban Hinsdale will receive the American Bar Association’s Congressional Award on April 12 for her support of legislation to protect funds that help low-income families who need legal assistance. The legislation, H.R. 6398, requires the Federal Deposit Insurance Corporation to fully insure Interest on Lawyers Trust Accounts. The interest generated from these accounts provides funding for civil legal services for people near or below the poverty line, including the working poor, low-income veterans and persons with disabilities. IOLTA is one of the largest funding sources for free legal services in the country, supporting legal aid offices and pro bono programs in all 50 states, the District of Columbia and the Virgin Islands. “At some point, almost everyone needs access to sound legal advice, whether it’s to write a will, sign a contract, or navigate the justice system,” said Biggert, a former attorney who specialized in real estate, estate planning and probate law. “This is a simple way we can help ensure that low-income Americans have access to legal help when they need it most – without placing the burden on taxpayers. I appreciate the support of the ABA, and I’m pleased we were able to send this important legislation to the President’s desk.” “Protecting IOLTA is a zero-cost, common sense way to help struggling Illinois families — Rep. Biggert’s support was crucial,” said ABA President Stephen N. Zack. This bill was signed into law Dec. 29, 2010. Click here to view a photo gallery from the awards ceremony.

The Illinois Supreme Court released one opinion today in the criminal case People v. Holmes.

CRIMINAL

People v. Holmes

By Kerry J. Bryson, Office of the State Appellate Defender Defendant, an Indiana resident with a valid Indiana handgun permit, was charged with two counts of aggravated unlawful use of a weapon (AUUW): one count for carrying an "uncased, loaded, and immediately accessible" firearm in his vehicle, and the other for carrying a firearm in his vehicle without having been issued a currently valid FOID Card. The charges arose out of a traffic stop in Chicago, where police found a handgun in the armrest of the backseat of defendant's vehicle. That armrest was closed and latched at the time. The gun was unloaded, although the clip was in defendant's pocket. Under the Court's recent decision in Diggins, 235 Ill. 2d 48 (2009) (holding that a vehicle's center console is a case), defendant's conviction under the first count could not stand because the backseat armest fell wtihin the meaning of a "case" under the statute. There was no dispute that the armrest was closed and latched, and thus the gun was enclosed in a case. As to the second count, the Court concluded that the AUUW statute must be read in conjunction with the FOID Card Act to determine whether defendant was exempt from having a valid FOID Card because he had a valid Indiana handgun permit.