Solicitors Accounts
Solicitors Accounts causes disproportionate anxiety relative to its actual scope: a small set of rules about client money, applied consistently to different scenarios.
The single governing idea is separation: client money is not the firm’s money, and the rules exist to enforce that distinction in every transaction.
- The fundamental principle of safeguarding client money
- Client account and business account entries
- Interest on client money
- Breaches of the SRA Accounts Rules and their consequences
See the format
Written for this page only, in the same single best answer format as the 180+ questions in the Solicitors Accounts section of the course.
A firm receives a single payment from a client. Part of it relates to a bill already delivered for work completed, and the remainder is described by the client as "towards your fees for the next stage", which has not yet been billed or even started. How must the firm treat this payment under the SRA Accounts Rules?
Client money includes money received in advance of costs being incurred, even where it is described as being "towards fees", until the firm has actually delivered a bill for that part of the work. The already-billed part may be transferred to the business account, but the unbilled part must be paid into, or kept in, the client account until it is earned and billed. A client’s agreement to be charged in advance does not itself convert an unbilled amount into the firm’s own money, and a mixed payment cannot simply be left to the firm’s choice.
Authority: SRA Accounts Rules, client money and the treatment of advance payments for costs.
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