Whenever a solicitor holds money for someone else — a deposit on a house, funds for a settlement, an advance towards fees — that money is not the firm's to do as it likes with. It must be kept separate, handled correctly, and accounted for at every step. The Accounts Rules exist to protect client funds, and getting them wrong is one of the fastest ways for a firm to face regulatory trouble. Mastering these rules is part of everyday practice in almost every area of law.
This lesson builds your understanding step by step:
- Foundations and Client Money — what client money is, what a client account is for, and the core duty to keep client and firm money apart.
- Receiving Client Money — when and how money must be paid in, handling mixed payments, and the limits on what the account can be used for.
- Withdrawals and Taking Costs — when you may withdraw money, checking the right ledger, and how to properly take your fees.
- Interest and Returning Money — accounting for a fair sum of interest and returning balances promptly.
- Records, Reconciliation and Breaches — the records you must keep, reconciling every five weeks, and what to do when something goes wrong.
- Third Party Managed Accounts (TPMAs) — using an outside provider while staying responsible for client money.