What can law firms do to make themselves more Accounts Rules compliant?

With most law firms' new financial year starting in April or May, we’ve put together some handy housekeeping tips which will help make your firm more Accounts Rules compliant.
  1. Ask yourself whether the payment you’re about to make from the firm’s Client Account is part of the underlying transaction for which you are engaged. If it isn’t clear, question why the payment shouldn’t be made by the client personally and whether the firm is unwittingly providing a banking facility. (SRA Rule 14.5)
  1. If you’re a partner signing off the monthly bank reconciliations, make sure you understand how the reconciliation works. There should be three elements to it: (a) compare the bank statements against the balance recorded in your accounting records; (b) where they are not the same, question why that is and whether, for example, a receipt has gone unrecorded; (c) compare the reconciled balance against the total client ledger balance. (SRA Rule 29.12)
  1. Routinely review the client matter listing to check for any overdrawn or residual balances and investigate them straight away. (SRA Rules 20.9 and 20.2).
These are still the most commonly found breaches and a Rule 14.5 breach would almost certainly be reportable.
 
Claire Watkins
Partner, Head of Professional Practices Group
E | Watkinsc@buzzacott.co.uk
T | +44 (0)20 7556 1482
 
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