Master client trust accounting. Avoid violations. Your license is at stake.
Should your clients TRUST you with their trust funds?
The number of attorneys disgraced, reprimanded and disbarred for trust accounting misconduct is rising. Think Thomas Giraradi and, now, Girardi’s son-in-law David Lira for starters. Plus, State Bar Associations are starting to publicize annually client trust accounting compliance in an effort to detect non-compliant law firms for remedial action or prosecution. The message is loud and clear: comply or face the consequences!
Proper client trust accounting, then, is not optional and should be taken seriously. As a responsible attorney, it’s your legal and ethical obligation to ensure that your client’s funds are held safely and managed appropriately. With State Bars getting tougher on compliance, now’s the time to master the rules and introduce robust processes for client trust accounting.
How do you know if you’re compliant?
As legal professionals, the importance of maintaining compliance with the State Bar’s regulations for legal trust accounting should not be underestimated. Ensuring that your trust accounting practices are in line with these regulations is essential for preserving your professional reputation, and safeguarding both your license and your client’s trust.
However, we understand that navigating the intricacies of trust accounting regulations can be complex and time-consuming. That’s why we’re reaching out today – to provide you with some valuable insights on how to determine if you’re compliant with the State Bar’s regulations.
These are the key indicators of client trust accounting compliance:
Regular reconciliation: Are your trust accounts reconciled on a regular basis? This involves a three-way reconciliation which means that your IOLTA bank balance matches your trust ledger balance and they both match the sum of all individual client ledger balances. Regular reconciliations are a foundational aspect of being compliant.
Accurate record keeping: Trust accounting demands meticulous record keeping. Are you using a clear and organized system for tracking deposits, withdrawals and expenses related to client funds? Proper record keeping is not only a compliance requirement but also crucial for your peace of mind.
Segregation of funds: Are your client funds separate from your personal or business accounts? This separation is a cornerstone of trust accounting compliance and helps prevent commingling of funds.
Timely disbursements: Are you disbursing funds to clients promptly and accurately? Delays or inaccuracies in fund disbursements can raise red flags and lead to compliance issues.
Proper documentation: Are you keeping detailed documentation for all transactions involving client funds? Proper documentation not only helps you maintain compliance but also acts as evidence of your ethical and professional practices.
Regular audits and reviews: Conducting regular internal audits and reviews of your trust accounting processes can help identify any potential issues before they escalate into compliance violations.
Don’t be reactive. Be proactive. Get in touch with Jayva today.
How can Jayva help?
If you’re unsure about your compliance status or would like to strengthen your trust accounting procedures, we’re here to assist you. Our team of legal accounting professionals specialize in guiding firms like yours through the complexities of legal trust accounting. We offer personalized consultations, training sessions and resources designed to ensure that you stay compliant and confident in your trust accounting measures.
What’s your next step?
Contact Jayva’s legal accounting team to schedule your client trust account (CTA) health check by:
Calling 888 563 9342
Emailing info@jayvaglobal.com or
Thank you for your dedication to upholding the highest standards in the legal profession. We look forward to supporting your continued success.
Need further convincing?
Check out our client trust accounting white paper.