Directs the chief administrator of the courts to develop and implement a random audit compliance program to conduct periodic financial audits of law firms; and…

◆ The sponsor's argument

Why Siela Bynoe says this is needed

In 2025, a former real estate attorney was sentenced to up to ten and a half years in prison for stealing a combined total of $1,791,600 collec- tively from 32 of his clients, between March 2021 and November 2024. He committed these thefts by withholding sale proceeds or down payment funds from those individuals. Cases such as that one are not a new occurrence. A recent report released by Newsday found that since New York State established the "Lawyers' Fund for Client Protection" in 1982, more than $112 million in stolen escrow money had been reimbursed by the fund, to the victims of such a crime. According to a 2025 report produced by the New York City Bar, New York faces an upward trend in trust violations, with the Lawyers' Fund paying out 94 awards totaling $11.6 million in 2024-a 31% increase in the number of awards and a 90% increase in payouts from the previous year. The New York City Bar continued that in 2024, real property escrow loss- es accounted for $9.9 million in awards, while theft of settlement proceeds accounted for another $415,476.In comparison, New Jersey (with about one-fifth of the number of attorneys as New York) paid $1.1 million in client protection awards over a 12-month period. Since 1981, The Supreme Court of New Jersey has operated their own program for random audits of attorney trust and business account records to determine compliance with New Jersey's recordkeeping rule, R 1:21-6, and ethics rule RPC 1.15 ("Safekeeping Property"). Since New Jersey began this program, several other states have taken up similar legisla- tion.These being: California, Connecticut, Delaware, Iowa, Kansas, North Carolina, Vermont, and Washington State. Some examples of these states that have proven this program to be successful. New Jersey has completed over 18,000 audits since first enacting the program in 1981. Only 4.5% of these audits referred for discipline due to the nature of the violation. Connecticut saw a drastic improvement in compliance rates, with the percentage of audits requiring no corrective action increasing from 14% in 2017 to 30% in 2024.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.