The Law Society expects attorneys to maintain their Trust Accounts. As an attorney, it’s your obligation to ensure the client’s trust funds are safe.
The purpose of a trust account is to safeguard and protect the client’s funds. To ensure the safety of trust funds, you need to keep trust funds separate from business funds.
An attorney’s trust account is essentially a business cheque account or its equivalent, established by the firm to hold client funds. FUNDS DEPOSITED INTO A TRUST ACCOUNT ARE NEITHER YOUR PROPERTY NOR YOUR FIRM’S.
Trust funds may not be used until the firm has earned it.
Payment to clients
A firm shall unless otherwise instructed, pay any amount due to a client within a reasonable time. Prior to making any such payment, the firm shall take adequate steps to verify the bank account details provided to it by the client for the payment of amounts due. Any subsequent changes to the bank account details must be similarly verified.
A firm shall, where the firm utilises electronic banking in respect of payments from the trust account, keep a proper audit trail, which shall include verification of the payee’s banking account details and that adequate internal controls are implemented to ensure compliance with the rules and to ensure that trust funds are safeguarded.
There are many options available for today’s firms. It is extremely difficult to maintain an attorney’s trust account without legal-specific accounting software. Most specially designed software for attorneys include separate trust and business ledgers for each client. Generic business accounting software (off the shelf products) does not comply with this.
When choosing software for your firm, make sure it gives you the option of separate Trust, Business and Investments ledgers for each client. It must be easy to see what your trust creditors are and what your trust liabilities and trust assets are.
It must be easy to move funds from trust to business (trust to business transfers).
Easy production of reports – The software must be able to produce any report at the click of a button. This will ensure easy and correct trust audits.
If you are unsure about how to maintain your trust account, transferring of funds or in general the running of your Accounts Department, contact Quantim Legal Accounts to help solve your problems.
Quantim legal accounts are written for attorneys to ensure they comply with Law Society rules, saving time and costs.