Trust Accounting In Large Law Firms: It’s Everybody’s Fault
The larger the firm, the more complicated trust fund management can be. It’s hard enough tracking multiple matters in one account, plus other matters each with their own accounts, but then you add multiple attorneys, paralegals and other staff members and it quickly becomes an administrative nightmare. Legal billing and accounting software simplifies, automates and centralizes the process but attorneys still need to be aware of the rules governing the accounts.
First let’s get the obligatory disclaimer out of the way. We aren’t lawyers; we merely develop and sell attorney practice management software. This article presents generic trust fund regulations. Check your state laws to find out how things work where you are. The information here isn’t legal advice–but you’re a lawyer so you should know that already.
In a large practice you have multiple attorneys handling cases with trust accounts. Although legal accounting software makes it easy for lawyers to handle their own trusts, is it permissible to centralize all trust accounting functions? Yes and no. Yes you could assign a single attorney to handle all trust matters and have the other attorneys delegate trust transactions to that one, however if a mistake is made then the attorney handling the case is ultimately the one who will be held responsible.
Is it permissible to have a non-attorney handle trust transactions? Again the answer is yes and no. A paralegal, accountant or bookkeeper could handle entering the daily transactions, generating reports, balancing accounts and so on but this person must be supervised by an attorney. Software makes oversight simple as the lawyer using time billing software reviews the work done by the staff to ensure all regulations are followed.
Remember that everyone needs to know the rules on trust account management. Even if attorneys aren’t entering their own transactions, they need to periodically use the trust accounting system to review and verify that their clients’ money is being handled correctly according to the law.
Centralized trust management and a 360-degree view of trust accounts are just two of the features that make Easy Trust an essential tool for today’s legal practice. Try the product free for 30 days and discover how much simpler escrow administration can be.