The Challenge
A small three-person law firm in the suburbs of a major city was struggling with one of the most sensitive areas of their practice, managing client trust and IOLTA accounts.
The firm’s owner, a real estate closing attorney, was overwhelmed and stressed. The books were unclear, and the interactions between the operating account and the trust/IOLTA accounts were confusing. Without a clear system, compliance was at risk, and the attorney was losing confidence in the firm’s financial management.
Our Solution
The Small Business Advisor stepped in to untangle the confusion and create a process that worked.
- Bookkeeper Training: We trained the firm’s in-house bookkeeper on the specialized transactions required for trust and IOLTA accounts.
- Customized System: We developed a clear, step-by-step system showing how money should flow between the operating account and the client trust/IOLTA accounts.
- Specialized Accounts: We established additional accounts to handle transfers on specific timeframes, ensuring compliance and proper allocation of earned fees.
The Results
With the new system in place, the law firm achieved:
- Full Compliance: All IOLTA and client trust accounts are now appropriately managed, protecting the firm from compliance risks.
- Clarity & Confidence: The owner now has a clear understanding of how funds should flow, reducing stress and providing peace of mind.
- Empowered Team: The bookkeeper gained the knowledge and tools needed to handle these complex transactions with confidence.
Final Outcome
The law firm now runs smoothly, with financial clarity replacing confusion. The attorney can focus on her clients, knowing the firm’s trust accounts are handled with precision and compliance.