Bookkeeping for Lawyers and Law Firms

17 03. 2021

In Uncategorized

AZ Accounting Firm provides the bookkeeping services required of lawyers and their obligations regarding their General Accounts and Trust Accounts.

The general account is the firm’s operating account, and include the following:

Deposit payments from clients that have been billed for completed legal services
Pay the firm’s expenses, such as rent, staff salaries, bank charges, office supplies etc
Pay disbursements on behalf of clients
Pay the lawyer(s)

No money belonging to clients should be in this account.

There are specific funds that are found in a Trust account, and these include

Unearned Income – these are deposits received from a client for future legal services and disbursements, such as a retainer
Advances for Costs – these deposits are used specifically for costs associated with managing a case
Settlement Funds – may be obtained through a real estate transaction or a personal injury case settlement
Judgment Funds – amounts awarded by the court, such as settlement funds
Third Party Funds – relate to funds obtained from a client’s property or monies to be paid to a third party for services rendered
Transfer money to the general account for fees after a bill has been sent to the client for completed legal services

A monthly reconciliation of all trust accounts is required under By-Law 9.