Accounts rules

The government today dropped the idea of creaming off interest from solicitors’ client accounts to offset the cost of legal aid. The decision will come as a small consolation to legal aid law firms, which the Ministry of Justice impact assessment says will earn, along with barristers, £430m less from legal aid than they do now.

In the first of a regular series of articles from the Institute of Legal Finance and Management (formerly the Institute of Legal Cashiers and Administrators), Lisa Dixon outlines the strategies law firms should be adopting to ensure they manage their debts properly

The Institute of Legal Cashiers and Administrators is to change its name to the Institute of Legal Finance and Management as it steps up its bid to become a regulatory body and have a member of staff in every legal practice qualified in legal accounting.

This week’s Question of Ethics from the Solicitors Regulation Authority looks at whether a firm can unilaterally dispose of a small amount left in client account.

Just 11 accountants have blown the whistle on their solicitor clients over concerns about fraud, theft or other conduct that may render them unfit to hold client money, as required by the Solicitors Accounts Rules, it has emerged. Blowing the whistle became an obligation, rather than an encouragement, just over a year ago.

Many accountants are failing both to qualify their reports and to blow the whistle on solicitors’ wrongdoing, the chairman of the Institute of Chartered Accountants of England and Wales’ solicitors group said last week. Only 35% of accountants’ reports are qualified – despite the intricate nature of the rules – while hardly any accountants have blown the whistle a year after the rules were changed to require it.

The Conservatives will move quickly if elected to consult on plans to consolidate all solicitor client accounts in one place and apply the interest that accrues to the legal aid fund, Legal Futures can reveal.

Alison Gorringe, chief executive of the Institute of Legal Cashiers & Administrators, looks at some of the issues around the Solicitors Accounts Rules, such as what to do with small balances left over on a file.

My name is Alison Gorringe. I am the CEO of the Institute of Legal Cashiers & Administrators, based in Sidcup, Kent. I am saddened to hear and read bad press about the legal profession.