Proper management of a fiduciary account can be laborious, but losing your license to practice sloppy recordings would be much worse. Lawyers who have difficulty managing their fiduciary accounts should address the problem immediately by receiving the help of a qualified professional. You might agree to replace Harry in an evil divorce. Harry writes them a cheque for $10,000. The lawyer deposits the money into his fiduciary account and then spends an hour working on the new client`s file. The hourly rate of the lawyer is 150 $US. The lawyer is then allowed to transfer $150 of that US$10,000 from the trust account to his or her business account. You have earned it. A lawyer could tell his client that the lawyer`s fee will be $US 100 and the legal costs will be 200 $US. The client writes a check for $1200 to the lawyer. Some lawyers will put the whole check on their business accounts, because most of the money goes to the lawyer anyway.
While most lawyers are good at keeping copies of their account checks in trust, not everyone thinks they should write down the client`s name or file number on every cheque when it`s issued. And while it may be easy to remember why a check was made a month ago, it might be hard to remember it a year from now. However, the Law Society`s rules require that the cheque go to the trust account, even if the lawyer is immediately entitled to the full lawyers` fee. The portion of the registration fee for this cheque must be held in trust. Some lawyers know that their trust accounts have screwed up, but they don`t know how to solve the problem. One solution is to talk to a management consultant at the law firm. Many public bar companies now offer their members free management advice for law firms, and a number of private management advisors also offer their services for a fee. Lawyers should ensure that their entire fiduciary account is balanced at the end of the month and ensure that each client`s account is balanced. Comparing balances can reveal accounting errors. This simple step sometimes intercepts errors that could have led to an incompetent verification of the trusted account. If a lawyer is in a position where he has to replenish a company`s fiduciary accounts from bank statements and copies of old checks ordered from the bank, the task is virtually impossible unless those checks indicate the money used in each transaction.
Maine Supreme Court revisions on July 1, 2015, regarding the Interest on Lawyer Trust Accounts (IOLTA) rules resulted in significant changes for Maine banks and credit unions, which maintain such accounts for their lawyers or law firm clients. A new reporting rule has been introduced, which serves as an additional layer of attorney regulation and oversight by the Maine Bar`s governing body, the Maine Board of Overseers of the Bar. .