LAW7410 - Trust and Office Accounting

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Module Descriptions

Module 1: Introduction to legal costing

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In this Module you will explore the terminology and concepts used in legal costing. Clients do not normally receive anything tangible in return for the fees they pay, and they do not see much of the work that the lawyers do for them. Lawyers face the pressures of meeting budgets and billing targets. They must also comply with statutory and regulatory requirements regarding costing.

Module 2: Introduction to trust accounts

Solicitors often receive money from or on behalf of clients Such monies are trust monies that must be treated accordingly, with separate bank account(s) and accounting systems to deal with the funds.

Trust accounting is a form of bookkeeping used to record trust transactions. A practitioner will receive, and make, many payments on behalf of both the firm and the clients for whom he/she acts. Trust accounting provides for the recording by the practitioner (trustee) of such receipts and payments; it allows the practitioner to separate the transactions conducted on behalf of clients from those of the firm; it allows proper and accurate reporting to clients; it allows practitioners to ensure they have adequate funds before making payments on behalf of clients; and it provides a record that auditors can inspect to ensure compliance with external monitoring requirements.

Module 3: Essentials of bookkeeping

In this Module you will look at bookkeeping, as it is the first step in the accounting process. Although practitioners may not be required to actually record the transactions themselves, it is important that they are informed users, as the principals of the firm are responsible for controlling the trust account.

Module 4: External examination (audits)

An external examination is a systematic examination and verification of the accounts and records to ensure compliance with the requirements of the relevant legislation and the Law Institute of Victoria (formerly the Victorian Lawyers RPA). This process can only be legally performed by an external examiner (auditor), who is a person from outside the firm (independent of the practitioner) who has not been involved in creating the records and is qualified to examine, verify and report on the state of the records. This short Module acquaints you with the external examination process.

Module 5: Ancillary issues

In this Module you will briefly cover a number of further issues involved in the operation of trust accounts that you need to be aware of. These include making deposits to the Legal Practice Board; disbursement issues; payment of practitioner fees from a trust account; cheque write-backs; dormant accounts and unclaimed money.