Trust accounting is very detailed and involves many requirements. Rule 5.02 sets out the requirement for specific books and records of a law office, which includes client trust ledgers, copies of billings, trust property records and bank statements.
Lawyers are required under rule 5.02(1)(h) to keep a record called a monthly trust comparison “showing a comparison made monthly of the total of balances held in all trust accounts and the total of all unexpended balances of funds held in trust for clients as they appear from the books and records together with the reasons for any differences between the totals.” The following documents must be retained to support the monthly trust comparison:
This means that the detailed client trust listing must be printed monthly and compared to the reconciled bank balance as part of the documentation maintained for the monthly trust reconciliation process. Before a reconciliation is signed by the member, the member should reconcile
The trust listing itself should be reviewed for inactive accounts, unusual amounts and outstanding unregistered releases.
Maintenance of Records: rule 5.02 (Law Society Rules)
Reporting Overdrafts: rule 5.06 (Law Society Rules)
Duty to Report: section 7.1-3 (Code of Professional Conduct)
(Posted: June 12, 2020)