Legal Accounts Services

Legal Accounts Services and Bookkeeping

All solicitors and other companies in the legal market need to have a solid base of legal accounts services and bookkeeping. There are a lot of firms in the market now who profess to offer bookkeeping services for law firms but unfortunately many of these do not understand the importance of applying the SRA Accounts Rules and the importance of the compliance element of the accounts department.

The main aim of a bookkeeping department in a law firm or an outsourced accounts partner is to ensure that clients’ money is handled correctly and that the solicitor’s own funds are clearly designated. There are currently very specific rules which define the way in which clients’ money is handled and these are set out in the SRA Accounts Rules (current version 20 of SRA Accounts Rules 2011, published on 1st October 2018).

There are overarching principles which aim to protect client money and assets, ensure that solicitors act with integrity and behave in a way that maintains the trust the public places in them and the services they provide. They give guidance on the safeguards which firms should put in place to ensure client funds are only used for appropriate purposes.

These are followed up by specific rules on dealing with client money, guidance on how to handle mixed funds (ie partly client money and partly office or disbursement funds) and when interest is due among others. Full details of these can be found on the SRA website.

The solicitors accounts package which a solicitor (or their bookkeeper) chooses to run their accounts is vitally important and this must be able to differentiate between office and client account and deposit accounts. There are several software packages on the market which claim to be appropriate for Solicitor’s Accounts but fall short on the above point and are therefore not compliant. This is becoming more and more of an issue as Case Management becomes more prevalent. Several companies showcase this element and the accounts are bolted on as an afterthought and do not come up to standard.

The Accounts Rules are changing in April 2019 and will become a shadow of their former selves making it even more crucial to have good solid legal accounts based bookkeeping software in place before the new rules come in. it is also vital to employ bookkeepers who are well versed in the original rules and their raison d’etre.

Each year there are several solicitors who fall foul of the SRA Accounts Rules and/or do not keep proper records of their accounts and this can lead to fines, suspensions and sometimes the solicitor being struck off. With the public becoming more aware of their rights and swift to seek redress for any errors or omissions with their cases, now is the time for law firms to get their bookkeeping houses in order.

The Law Factory are experienced legal cashiers and bookkeepers who are highly knowledgeable on the SRA Accounts Rules and know which software packages will meet the Law Society and SRA’s requirements for legal accounts compliance. We are often called in to firms who are being visited by the SRA because their accounts are behind, have been mis-posted by inexperienced staff or external bookkeepers and have helped to get several firms back on track. Our knowledge of the old rules will stand our existing clients in good stead when the new streamlined rules come in next year.

Please get in touch for further information and details.

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