Client account procedures and records 2019—law firms
Client account procedures and records 2019—law firms

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Client account procedures and records 2019—law firms
  • Terminology
  • Responsibility for compliance
  • Office money and office account
  • Definition of client money
  • Client account
  • Handling client money
  • Operating a client account
  • Accounting systems, controls and records
  • Joint accounts and client’s own account
  • more

This Practice Note sets out the requirements of the SRA Accounts Rules 2019, in force from 25 November 2019, regarding client accounting procedures and records. It also reflects supporting guidance issued by the SRA: Helping you keep accurate client accounting records.

The 2019 Rules form part of the SRA Standards and Regulations. They focus on the key principles of:

  1. keeping client money separate from the firm’s money

  2. returning client money promptly at the end of a matter

  3. only using client money for its intended purpose

  4. proportionate requirements for firms to obtain accountants’ reports

The Accounts Rules 2019 (2019 Rules) are much more concise than the Accounts Rules 2011 (2011 Rules), comprising just over six pages of rules plus a three-page glossary. This does mean a lot of detail is lost, but some of this has been incorporated into the supporting guidance. Generally, however, the 2019 Rules are written in clear language that is easy to understand.

See also Precedents: Accounts manual for staff—law firms 2019 and Accounts manual for accounts or finance team—law firms 2019.

Terminology

The 2019 Rules are littered with subjective terms such as ‘promptly’, ‘fair’ and ‘appropriate’. The SRA acknowledges that this requires an exercise of judgment, which will be an adjustment for many firms compared to the detailed and prescriptive 2011 Rules. However, the SRA does not