What are my state's IOLTA rules?

CosmoLex Team

Every state has an IOLTA program, but whether or not it is mandatory varies from state to state[1]. Many of the guidelines for IOLTA accounts are standards set by the American Bar Association and are closely followed by state bar associations. There are differences in each state’s rules and statutes, however, as they are allowed to decide when, how, and … Read More

What trust accounting reports should my firm be generating?

CosmoLex Team

Maintaining proper trust accounting records is crucial in order to ensure accurate bookkeeping, provide an audit trail, and clearly establish proper trust account handling to maintain compliance. Also known as IOLTA accounting, managing these specialized client accounts requires diligent reporting. Each state varies in its specific report requirements, but the following are a list of trust account reports that are … Read More

What client trust funds can be used to pay an invoice?

CosmoLex Team

When you’ve worked on a matter and are billing fees to a client, those fees can then be deducted from the client’s trust account. You can also look to seek payment on an invoice for reimbursement of advanced matter costs. However, it is recommended to have the client view and approve the invoice prior to moving the funds[1]. With trust … Read More

Can I use a general accounting program like QuickBooks for Legal Trust Accounting?

CosmoLex Team

General accounting programs can be used to track trust accounts but be aware that they have three major deficits when it comes to legal trust accounting: they require significant customization, they lack necessary safeguards, and their reporting functions are inadequate.[1] Customization Client trust funds have to be recorded on your law firm’s books as a deposit into a bank account … Read More

What do I do with unclaimed trust accounting funds if I can’t locate my client?

CosmoLex Team

Lawyers are supposed to act as fiduciaries of client funds, acting in their best interests and protecting their assets. If you are seeing uncleared checks on reconciliations for more than a month or two, you have a duty to look into the funds and try to get them to your client. Additionally, funds may be lingering in trust accounts are … Read More