How can we prevent fraud with our trust accounting?

CosmoLex Team

It’s easy to think fraud won’t happen to you – until it does. Fraud occurs in a variety of ways, but it boils down to someone using deception to illegally take someone else’s assets. Trust account fraud is especially concerning for lawyers. Not only are attorneys personally liable for any money that goes missing from a trust account, but they … Read More

What trust accounting records should my law firm be keeping?

CosmoLex Team

Trust account record requirements vary by State Bar, but all records help keep you compliant. Why? Because the funds in a trust account don’t belong to you, but you’re responsible for keeping track of every cent, including interest.[1] Bank Ledger and Records Like a highly detailed bank account statement, this ledger notes the when, how much, and why of all … Read More

Should my law firm use retainers or just bill as work is done?

CosmoLex Team

Law firms either bill as work is done (e.g., monthly, quarterly, or at predetermined milestones) or by using a retainer model. The three retainer models most frequently used by law firms are: General retainers Flat fees or advance payment retainers Security retainers General retainers secure a lawyer’s services for a particular period of time, and flat-fee retainers function as complete … Read More

For trust accounting records, what happens if my bank doesn’t return deposit slips?

CosmoLex Team

As part of proper trust account record keeping, law firms are required to keep copies of deposit slips associated with the account. In the event of an audit, these slips help to create a paper trail to verify what your books say. Without them, an auditor could be left wondering what actually happened with the funds. In some cases, banks … Read More