Protecting Clients from Financial Misconduct by Attorneys
When you hire a lawyer, you trust them not only with your legal matter but also with your money. Attorneys in New York are required to safeguard client funds in escrow or trust accounts, keeping them separate from their own money and using them only for authorized purposes.
When a lawyer misuses, mismanages, or misappropriates client funds, it is one of the most serious forms of legal malpractice — and may also involve ethical violations, disbarment, or criminal charges.
At The C. Paul Law Firm P.C., we represent clients across [City] and New York whose lawyers mishandled their funds. We fight to recover lost money and hold negligent or dishonest attorneys accountable.
Call today for a free consultation: (212) 551-PAUL
What is Mishandling Client Funds?
Mishandling client funds occurs when an attorney fails to follow strict financial and ethical rules governing trust accounts. Even accidental misuse of funds can devastate clients, while intentional misuse may rise to the level of fraud.
Common Examples of Mishandling Client Funds
| Type of Misconduct | Example | Legal/Ethical Impact |
| Commingling Funds | Mixing client funds with attorney’s personal accounts | Ethics violation, malpractice liability |
| Misappropriation | Using client money for personal expenses | Grounds for disbarment & civil damages |
| Failure to Account | Not providing records of transactions or balances | Breach of fiduciary duty |
| Unauthorized Withdrawals | Taking money without client consent | Theft, conversion claims |
| Escrow Violations | Mismanaging settlement funds or real estate escrow | Financial loss to client, malpractice claim |
| Delayed Distribution | Failing to promptly deliver client’s settlement funds | Client damages & disciplinary action |
Proving Mishandling of Funds
To succeed in a claim against a negligent or dishonest lawyer, clients generally must prove:
- Attorney-Client Relationship – The lawyer was entrusted with funds.
- Breach of Duty – The attorney violated financial management rules.
- Causation – The mishandling caused financial harm.
- Damages – The client lost money or suffered other harm.
Compensation for Victims of Mishandled Funds
If your lawyer mishandled your money, you may be entitled to recover:
- Misused or lost funds
- Interest on withheld or delayed money
- Additional financial losses caused by the attorney’s misconduct
- Legal fees wasted on negligent or dishonest representation
- Emotional distress damages
Frequently Asked Questions
Is mishandling client funds always malpractice?
Yes. Whether intentional or careless, misuse of client money is malpractice and an ethical violation.
Can my lawyer be disbarred for stealing my money?
Yes. Misappropriation of funds is one of the leading causes of attorney disbarment in New York.
What if my attorney delayed giving me my settlement check?
Unreasonable delays may qualify as malpractice or misconduct, especially if interest or penalties were lost.
How long do I have to bring a claim?
Generally 3 years for malpractice in New York, though fraud-related claims may have different timelines.
Serving [City] and the Greater New York Area
We represent clients across [City], Manhattan, Queens, Brooklyn, the Bronx, and throughout New York who were harmed by attorneys who mismanaged or stole client funds.