I completed the LPC (Legal Practice Course) at BPP University in 2017 with a 97% distinction in Solicitor Accounts. These detailed and condensed notes cover the entire Solicitor Accounts module, including every SGS. My friends at other universities, such as the University of Law, have also used the...
SOLICITORS’ ACCOUNTS *Client ledgers = LOGICAL ∴ ££ into ledger = CR, out = DR
SOLICITOR ACCOUNT RULES
• Rule 1.1 Keep client ££ safe = in separate account from firm’s ££
• 1.2(a) Seperate client ££ from office ££
CLIENT ££
• 12.2 Client ££ = solicitors owes ££ to client
o (a) As trustee
o (b) As agent/stakeholder
o (d) Pay disbursements not yet incurred/paid, not professional disbursements
§ Incurred: When solicitor sends bill
o (c) Unpaid professional disbursements, e.g. ££ received from client for counsel’s fees, solicitor received
counsel’s invoice, but ≠ yet paid
§ Glossary Counsel/lawyer/expert fees, not travel agents
§ But once paid = office ££
o (e) Account of costs generally
*££ held on account of SDLT” = in client account to transfer to office. If paid = office ££.
CLIENT ACCOUNT
• 13.3 Account name must incl. ‘client’
• 13.5 General client account / separate designated client account for 1 client
WHERE TO PUT CLIENT ££?
• 14.1 Pay into client account w/o delay = 1 working day
• But exceptions:
rd
o 16.1(a) Client gives cash + solicitor pays 3 party fees ≠ pay ££ into client account
§ Record receipt + payment in client ledger
rd
o 16.1(b) Receives cheque for client from 3 party made payable to firm + endorses (signs back) = sends on
§ Record receipt as client ££: “Received cheque of £X in favour of X; sent to client” *Write CR
balance again
o 16.1(c) Client’s written instructions to not bank cheque yet + confirmed by solicitor in writing
o 17.1(b) Unpaid professional disbursement may be paid into office account, provided professional paid
in 2 working days
o Rule 29 Guidance Note (iii) Cheque ≠ payable to firm
§ Record receipt + forwarding cheque in client ledger
• 14.5 ££ must relate to solicitor’s work, not banking facilities
PAY ££ OUT OF CLIENT ACCOUNT
• 20.1 ££ out of client account:
o (a) Pay to/on client’s behalf, e.g. deposit
o (c) Pay disbursement
o (d) Reimburse office ££ spent on client’s behalf
o (e) Transfer between client accounts
o (f) Client’s written instructions to withdraw + for client’s convenience
o (i) Paying into client account = breached Rules
• 17.2 + 17.3 After sending bill to client, ££ to pay bill of costs
• Office ££ paid into client account under 17 (to settle bill of costs) + 18 (mixed payments)
OFFICE ££
• 12.7 Office ££: ££ belongs to firm
o (a) ££ to run firm, e.g. rent, salaries
o (b) Interest earned on general client account
o (c) Incurred disbursements
§ (i) ££ for fees due to firm = profit costs
§ (ii) ££ for paid disbursements
§ (iii) ££ for incurred, but unpaid disbursements
§ But unpaid professional disbursement = client ££
• 12.8 Partner’s ££ = office ££
o But if firm acts for employee / also acts for lender / buys property w/ spouse = client ££
• If no client ££, otherwise using another client’s ££ = breaches 1.2(c)
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