Law firms improve systems for handling client money
02 May 2018
Law firms are improving their approach to handling client money, as the number of qualified accountant’s reports relating to breaches submitted to the Solicitors Regulation Authority (SRA) falls by 28 per cent in 2017.
According to the recent analysis, the number of reports submitted to the SRA fell from 1,915 in 2016 to 1,387 last year. The primary drivers behind the remaining breaches concern law firms maintaining residual balances, where they do not return leftover client money once all work has stopped. Also, firms acting as a bank for clients, including receiving and holding money, and making payments on their behalf, outside of the originally agreed instructions.
Commenting on the findings, a spokesperson for the report says: "Solicitors want to help their clients by doing as much as they can for them. However, if they act outside of their original remit, for instance by making payments on a client’s behalf - even if requested by them to do so - this can actually constitute a breach of the SRA’s rules.
"With fewer breaches being reported by accountants ... law firms are now better able to see where any issues really lie and pro-actively put them right.
"Many of these issues may only be technical breaches, but it’s still important that they are identified quickly and addressed. The SRA also has more time to focus on reviewing the most important cases. That can only be a good thing."
Beavis Morgan – specialist advisers to the legal profession
At Beavis Morgan, we work closely with solicitors and barristers, assisting sole practitioners, through to large London-based firms and chambers. Our services are tailored according to each specific requirement and objective, always seeking opportunities to enhance wealth accumulation and succession planning, and ultimately reduce the tax bill. Our partners are readily available and are committed to supporting fellow professionals.
Where there are concerns about your business or personal financial situation, our specialist insolvency, recovery and advisory partners at BM Advisory are also available to assist with resolving issues and finding innovative solutions for businesses and individuals in distress.