When you receive trust fund, the Law Society's By-Law 9 requires you to deposit the fund in your trust account no later than the next banking day. You should also make sure to record the information required by By-Law 9 on your deposit slips.

If you receive or disburse client trust funds, you will need to open a trust bank account. There are four different types of trust bank accounts:

Most law firms need a least a mixed trust account - a bank account to hold money for more than one clients. You need to be aware of the Law Society's rules regarding opening and closing a mixed trust account.

A general monetary retainer is an amount paid to a lawyer by a client to secure the availability for a specific period time. Unlike a specific retainer, general monetary retainer cannot be allocated to any legal services that are rendered or will be rendered.

Generally, we need the following documents for bookkeeping purpose:

There are several reasons to keep books and records properly in your law practice.

To protect your important asset - your license

According to the requirements of the Law Society, you must keep the following records for at least ten full fiscal years:

  • Trust receipts journal
  • Trust disbursements journal
  • Client trust ledger
  • Monthly trust comparisons, including supporting trust bank reconciliations and client trust lists
  • Valuable property record
  • Bank statements or pass books, cashed cheques, and detailed duplicate deposit slips for all trust and general accounts
  • Signed electronic trust transfer requisitions and signed printed confirmations of electronic transfers of trust funds

Most law firms have two bank accounts: general account and mixed trust account. The Law Society has guidelines regarding what money goes into trust account and what money goes into general account. It is important to understand the rules. 

An important decision every lawyer faces in setting up their practice is how to ensure their books and records are maintained in accordance with the requirements of the Law Society.

There is a prevalent notion among lawyers that the bookkeeper’s role is akin to that of a data entry person. Some lawyers may hire a relative for this job or delegate it to a secretary without careful deliberation of their qualifications. Poor books and records lead to costly administrative suspension by the Law Society.