In the Matter of Karen Lynn Pass

Karen Lynn Pass, a Georgia lawyer since 1994, faced two disciplinary cases. In the first, the State Bar found she deposited a client's settlement money into her trust account (called an IOLTA account) while other clients' funds were also there, without keeping proper records to track each client's balance. In the second, her office manager secretly forged checks and stole nearly $4,000 from a client's funds held in that same account, because Pass had failed to review or reconcile the account. A special master found Pass acted negligently, not dishonestly, that she had no idea her employee was stealing money, and that she repaid the client after discovering the theft. The Supreme Court of Georgia reviewed the special master's findings and recommendation, agreed she violated rules requiring lawyers to safeguard client funds and supervise staff, and ordered a public reprimand along with a requirement that she consult with the Bar's Law Practice Management Section.

The court held that Pass negligently violated rules requiring lawyers to safeguard client trust funds and properly supervise nonlawyer employees, and that given her prior disciplinary history a public reprimand with conditions, rather than the lesser Review Board reprimand given in similar cases with no prior record, was the appropriate sanction.

The case reminds Georgia lawyers that they must keep accurate trust account records and actively supervise nonlawyer staff who handle client money, even when misconduct is committed by an employee without the attorney's knowledge, since failing to do so can still result in discipline.

Public reprimand with conditions imposed

1. The court applied the ABA Standards for Imposing Lawyer Sanctions, which look at the duty violated, the lawyer's mental state, actual or potential injury, and aggravating or mitigating factors to determine appropriate discipline.
2. The special master found Pass's conduct implicated duties owed to clients because her failure to monitor her trust account and supervise her employee both threatened her ability to preserve client property, but concluded she acted only negligently rather than intentionally or knowingly.
3. Because no client funds were ultimately lost (the stolen money was replaced) and there was no actual injury, only potential injury, the case called for a lesser sanction than cases involving actual client harm.
4. The court compared Pass's conduct to two prior cases, Brock and Grant, where attorneys received a Review Board reprimand for similar negligent trust account failures and failure to supervise staff, but noted that those attorneys had no prior discipline.
5. Because Pass had a prior formal letter of admonition and substantial experience practicing law, both aggravating factors, the court concluded a more serious public reprimand with conditions, rather than the lighter Review Board reprimand, was warranted.

• attorney discipline
• trust account violations
• State Bar of Georgia
• nonlawyer supervision
• public reprimand