Which account is used to hold client funds?

• A. Contingency fee
• B. Client trust account
• C. Reprimand or censure
• D. Negligence

Answer: (B)

The main concept is safeguarding client funds through a client trust account. This separate account holds money that belongs to clients (retainers, settlements, or advance payments) and is used only for client funds, not the attorney’s own money. Keeping client funds in a dedicated trust account protects these funds from comingled with firm operating funds and supports clear, auditable records of every transaction. Withdrawals are made only for client-directed disbursements or earned fees, in line with ethical rules.

Contingency fee refers to how the attorney’s payment is structured (a percentage of the recovery), not a place to hold money. Reprimand or censure is a disciplinary sanction, not an account. Negligence concerns failure to meet professional duties, i.e., malpractice, not a financial arrangement or holding place for funds.