Why Your Law Firm May Not Need a Client Account Anymore

by | Oct 31, 2022 | General | 20 comments

My Legal Cashier

Still Using a Client Account? You May Not Need To.

Many UK law firms continue to operate client accounts simply because it’s how they’ve always handled client funds — especially for unpaid fees or disbursements. But under the latest SRA Accounts Rules, there are scenarios where maintaining a client account is no longer necessary.

Let’s explore when you can legally and safely operate without one — and how it can benefit your firm.

When Can You Avoid a Client Account?

If all the following apply, your firm is not required to hold funds in a client account:

  • You only receive money for fees or unpaid disbursements before issuing a bill;
  • Those disbursements are incurred on the client’s behalf and your firm is liable for them;
  • You do not receive any other type of client money or operate under regulations requiring a client account;
  • You inform the client in advance (via the engagement letter or client care letter) where their funds will be held.

Important: Always refer to the latest SRA Accounts Rules to ensure full compliance.

https://www.sra.org.uk/solicitors/standards-regulations/accounts-rules/

The Hidden Cost of Keeping a Client Account

Maintaining a client account isn’t just about compliance — it’s also about time, cost, and risk. It involves:

  • Monthly bank reconciliations and approvals
  • Monitoring balances to avoid overdrafts
  • Keeping client ledgers up to date every five weeks

These admin tasks drain valuable time and resources — and they’re often unnecessary.

A Simpler, Smarter Alternative

Here’s what your firm can do instead:

  • Clearly explain in your client care letter how and where funds will be held.
  • Ensure your internal processes meet SRA compliance standards without needing a separate client account.
  • Free up your finance team to focus on real value — not red tape.

How We Help Law Firms Like Yours

At My Legal Cashier Ltd, we help law firms transition away from traditional client accounts where they’re not required.

We’ll take care of:

  • Ensuring full SRA compliance
  • Designing efficient systems for money handling
  • Delivering a smooth, low-risk transition that saves time and money

Want to find out if your firm can ditch the client account?
Call us on 020 3598 4327 or
Email [email protected]

Let’s simplify your compliance — so you can focus on what you do best: looking after your clients.

Written by:
Muhammad Zameer, FCCA
Legal Accounts Expert, My Legal Cashier Ltd