When a firm holds money for its clients, it must be able to show — accurately and at any moment — exactly whose money it holds and where it sits. Good record-keeping is what makes that possible: it protects clients, keeps the firm out of trouble, and is one of the most practical, everyday skills a solicitor handling money needs. Get it right and problems are caught early; get it wrong and client money can quietly disappear.
This lesson takes you through the system step by step:
- Core Obligations and Responsibility — the three pillars of record-keeping (ledgers, reconciliation, retention) and who in the firm is accountable.
- Client Ledgers — how to record each matter, what every entry must contain, and the rule that the client side must never go into debit.
- Reconciliation — comparing the bank, the cash book, and the client ledgers every five weeks to confirm everything adds up.
- Shortfalls and Surpluses — what a shortfall is and why missing client money must be replaced straight away.
- Retention of Records and Breaches — how long records are kept, how to put a breach right, and the COFA's duty to report serious breaches to the SRA.
By the end you'll understand how the pieces fit together and be able to apply each rule with confidence.