The New York City (NYC) Bar Association’s Professional Discipline Committee has a vital role in monitoring and evaluating the lawyer licensing and discipline process. It examines NYC attorney disciplinary agencies’ performance and practices, and delivers reports and rule and policy change recommendations to the Office of Court Administration and Appellate Divisions.
A particular focus is on regulations, rules, and statutes that help ensure proper attorney and law firm conduct. It also monitors the procedural rules underpinning the disciplinary system, and works jointly with the Committees on Professional Responsibility and Professional Ethics on ethics-related statutes. The Committee facilitates the NYC Bar Association’s Complaint Mediation Panel, which handles any type of client/attorney dispute not involving fees.
In July 2025, the Professional Discipline Committee issued “Evaluating Trust Account Oversight Mechanisms,” a comprehensive report looking at attorneys’ core duty of safeguarding client funds. Numerous states have regulations extending past rules of professional conduct, involving loss prevention and detection. These protect the funds contained within attorney trust accounts.
New York State has adopted a pair of common measures. One requires that insurers provide written notices to payment claimants when settling third-party liability claims. The other requires this type of written notice for banks’ dishonored check/overdraft notices. A third type of measure, involving the random auditing of attorney trust accounts, is less common, as it involves considerable expenses and logistics.
The NYC Bar Association report examines random audit programs within the context of their effectiveness in educating attorneys on best client fund guardian practices and in protecting the broader public against fraud. Benefits of the random audit approach center on effectively allocating limited disciplinary resources, as it’s impossible to audit everyone.
New York has been considering implementing such a program since the late 1980s, following the Supreme Court of New Jersey’s 1981 authorization of the Random Audit Compliance Program (RACP). In tandem with RACP, New Jersey has a strict rule of automatic disbarment in cases where attorneys knowingly misappropriate client funds. Permanent disbarment from New Jersey practice was also the rule in such cases until 2024, when the State Supreme Court Chief Justice set in place a narrow pathway to readmission. According to the report, the $18 million program has engendered a “culture of compliance,” as it proactively imposes attorney regulations. This has led to relatively modest awards, related to client funds’ thefts.
Other state programs examined in the report include those of Connecticut, North Carolina, Washington, Vermont, and California. The policy paper concludes that a random audit program would boost the efficacy of rules that are already in place within the First and Second Judicial Departments.
It also concludes that a random audit program is sorely needed, given rapidly rising reimbursement awards. As reported by the New York Lawyers’ Fund for Client Protection, in 2023, the state granted some 72 awards, representing $6.1 million in reimbursement payouts. The Annual Report of the Board of Trustees for Calendar Year 2024 reported a 90 percent increase in this amount to $11.6 million. Awards granted with these reimbursement payouts rose 31 percent to 94. The largest category of such awards was $9.9 million for reimbursed real property escrow losses, with thefts of settlement proceeds by attorneys accounting for $415,476 (the second largest category).
Dyan Gershman 