For many law firms, the annual accountant’s report has traditionally been a contained compliance exercise. Since a 2014 rule change, only qualified reports have needed to be submitted to the SRA — an unqualified report would generally remain on file rather than being sent to the regulator. That position is now changing, and it has…
![How to Build an Effective SRA Breach Register for Compliance]()
Mistakes can happen in even well-managed law firms. The real test is how quickly a firm identifies an issue, records it and prevents the same problem from happening again. A well-maintained SRA breach register gives the COFA and senior management a clear record of compliance failures. More importantly, it turns individual incidents into useful information…
![What is a Three-Way Reconciliation? A Guide for Law Firms]()
When a law firm holds client money, it needs to know that every pound recorded on individual matters can be reconciled back to the money actually held at the bank. That is the purpose of a three-way reconciliation. It is one of the fundamental financial controls within a law firm and a specific, named requirement…
![Law Firm Client Money and SRA Compliance: A Practical Guide]()
Introduction Managing client money is one of the most important financial responsibilities within a law firm. The challenge is that compliance does not depend on one reconciliation, one policy or one person. It depends on a connected system of controls covering how money is received, recorded, held, authorised, transferred, reviewed and ultimately returned or applied…
![What Happens If Your Three-Way Reconciliation Doesn’t Balance?]()
You’ve completed the reconciliation, but the numbers do not agree. The client bank statement shows one figure, while the cashbook or total client ledger balance shows another. It may be tempting to assume that the difference is a minor posting error and move on. That is precisely when the investigation should begin. When a three-way…
![Can a Solicitor Retain Client Money When Its Invoice Has Not Been Paid?]()
A client owes the firm money, while the firm is still holding funds for that client. Commercially, it may seem sensible to retain those funds until the outstanding invoice is settled. However, a solicitor cannot automatically retain client money for an unpaid invoice simply because the client owes the firm money. The key question is…
![Can a Law Firm Transfer Client Money to Pay Its Fees?]()
Yes, a law firm can transfer client money to pay legal fees, but only when the money is properly available for that purpose and the correct steps have been completed. Simply raising an invoice does not mean every balance held for that client can automatically be transferred to the firm’s business account. This is where…
![Outsourced Legal Cashiering for Small Law Firms]()
A small law firm can reach a point where financial administration becomes too important to fit around client work, but still does not justify recruiting a full in-house finance team. Bills wait for approval. Client-account postings fall behind. Reconciliations become stressful. Meanwhile, partners spend evenings checking work that should already be under control. Outsourced legal…
![What is a COFA? A Guide for UK Law Firms]()
Handling client money brings significant responsibilities for any law firm. While finance tasks can be delegated or outsourced, regulatory responsibility remains firmly with the practice. So, what is a COFA, and what does the role involve? A Compliance Officer for Finance and Administration (COFA) oversees a firm’s compliance with the SRA Accounts Rules. The role…
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