Who is this relevant to?
The Solicitors’ Regulation Authority (SRA) requires solicitors authorised by the SRA to operate a client money account which is separate from their own bank account. This applies to both sole practitioners and firms and applies when client money is received or dealt with by the solicitor.
There are some exceptions, details are on the link below:
SRA | Do I need to operate a client account? | Solicitors Regulation Authority
Who is responsible for managing the client account?
The SRA has ‘Accounts Rules’ which govern how solicitors are expected manage the client account. Broadly, the Accounts Rules cover the definition of a client account and client money, systems and controls that must be in place to ensure client money is kept safe, records that must be kept and the criteria for the requirement to have an Accountant’s Report. This means that solicitors handling client money at any stage of the process must be aware of the Accounts Rules and ensure compliance with those rules.
In practice this can include, but is not limited to, the fee earner and anyone else working on a case, accounts staff responsible for banking and maintaining client ledgers, to the business owner(s) responsible for reviewing bank reconciliations and possible breaches.
How can you ensure good practice?
- Ensure everyone understands the Accounts Rules and why they exist – you can organise an annual refresher which could involve a professional trainer providing an update in-house, via a webinar or as part of an away day.
- Provide training for new starters, even though they may be familiar with the rules it is good practice to ensure they understand how your firm puts them into practice.
- Compile an easily accessible procedures manual so any member of your team can check what they have to do and how. It is vital that your team knows how to process transactions on your case management software and accounts software.
- You may want to download the Accounts Rules and add in your firm’s procedures under each Rule which will help your team to easily cross reference these to the rules.
- Appoint an Accounts Rules champion who can provide help and who regularly checks for updates and guidance issued by the SRA, which can then be passed onto your team.
- Bank details – ensure that everyone is aware of client account details in the event they receive a call from a client wanting to confirm the details.
Breaches
Inevitably there will be occasional breaches which can be due to human error or factors outside your control. However, breaches are an opportunity to review your procedures to check that they are still fit for purpose. You may wish to consider the following:
- Was the breach a human error and one-off? At what point in the process did it occur and does it imply that the procedure needs to change?
- Does the breach indicate that the team does not understand the rules or was it unusual?
- Have there been changes in the case management software or accounts software which need to be updated in the procedures?
- Does your team have the opportunity to ask for help especially if there is an unusual situation?
How can we help?
At Plus Accounting we are able to provide Accountant’s Reports within the remit of the Accounts Rules and our experience in this area means we are familiar with the Accounts Rules and various ways they are applied.
In addition to providing Accountant’s Reports we are able to offer a separate service to review your procedures, focus on areas of concern you may have or help your team understand what needs to be checked.
Useful information
SRA | Accounts Rules | Solicitors Regulation Authority
SRA | Accounts and finance | Solicitors Regulation Authority
Author: Helen Griffiths, Accounts and Audit Manager, Plus Accounting
Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.
Date published: 10 October 2024