Changes to SRA Accounts Rules
Historically the Solicitors Regulation Authority (SRA) Accounts Rules have comprised of a large number of very specific and prescriptive rules governing how law firms deal with client money. All firms, large or small, who hold client money have had to comply with these rules with no real scope to adapt them to suit their individual practice.
From 25 November 2019, this will all change.
Overview of changes
The key areas of change are:
- change in the definition of client money - particularly impacting on the treatment of disbursements
- removal of specific timeframes - allowing firms to determine, for example, appropriate timescales for the transfer of billed costs and the allocation of mixed payments
- introducing into the Accounts Rules the option to hold client money in a Third-Party Managed Account (TPMA) instead of a client account
In addition to the above, for firms that operate a client's own account, there is an additional requirement to perform reconciliations at least every five weeks. Also, these accounts must be included when determining whether the level of client money held falls below the limits which allows the firm an exemption from the requirement to obtain or deliver an accountant's report.
How can we help?
We have put together an overview of the changes that will be coming into effect on 25 November, which can be downloaded by clicking here.
Please get in touch with us if you could like to discuss the new rules in more detail.