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First Canadian Place

100 King Street West

Suite 5600

Toronto, ON, M5X 1C9

Downtown Toronto office:

1235 Bayly Street

Unit 7

Pickering, ON, L1W 1L7

Main office:

2 Robert Speck Pkwy.

Suite 750

Mississauga, ON L4Z 1H8

Mississauga office:

Ottawa office:

116 Albert St. 

Suite 200/300 

Ottawa, ON, K1P 5G3 

Markham Office: 

15 Allstate Pkwy

6th Floor

Markham, ON, L3R 5B4

We are a legal practice management bookkeeping Firm with locations in downtown Toronto, Pickering, Mississauga, Markham, and Ottawa.

We provide practice management solutions and PCLaw Bookkeeping services to solo to medium sized lawyers and legal firms from southwestern Ontario (Middlesex) to eastern Ontario (Ottawa).

Services include legal practice management, cloud migration, PCLaw Bookkeeping, Support, Training, Security, and Installation. Law firm trust accounting solutions. Providing reports on identified deficiencies in maintaining financial records and matters on compliance with LSUC By-Laws and Rules of Professional Conduct. High-quality law firm record keeping in compliance with The Law Society of Upper Canada for high-net-worth individuals or sole-proprietors in a growing law practice in Ontario.

We also provide Website Design/Maintenance, I.T Out Sourcing/Small Office Networking.

The Value of Complying with the Law Society of Upper Canada By-Laws

September 8, 2013

 

By: Keith Hill, Jr.

 

The most apparent benefit of adhering to the Law Society of Upper Canada (LSUC) bookkeeping By-Laws is the prevention of incompliance penalties. However, because a great deal of these By-Laws focus on keeping a “clean” set of books, a substantial value is that maintaining compliance also facilitates the efficient management of the licensee’s practice in addition to providing a clear window for assessing the firm’s business. Of all fifteen (15) LSUC By-Laws, By-Law 9 “Financial Transactions and Records” which speaks to the requirement to maintain financial records clearly demonstrates these benefits the most.

 

Trust Funds

 

For instance, Part IV of By-Law 9 refers to money received in trust from clients. The first point of this By-Law is that trust monies are required to be put into a bank account immediately on the client’s behalf with detailed information to record said deposit. Furthermore, a “licensee shall not at any time with respect to a client, withdraw from a trust account more money than is held on behalf of that client in that trust account at that time.” This may seem obvious, but in the daily operations of a practice, an overdrawn trust account is an oversight that can easily take place and can snowball into a catastrophe. If licensees were not instructed to follow these systematic procedures, a growing firm could not keep track of how much money is owed to them for a specific matter versus how much has previously been collected or what has already been disbursed. This is particularly relevant when handling numerous real estate transactions. These mandates help firms circumvent an otherwise inevitable disaster.

 

Electronic Transfers

 

Paragraph 4 of subsection (2) of By-Law 9 under “Withdrawal by Electronic Transfer” refers to the electronic debiting of a trust account. The paper trail of an e-transfer is insufficient to deduce pertinent information such as which matter the transfer relates to or the specific reason for the dollar amount being transferred. As a result, an Electronic Trust Transfer Requisition – called a Form 9A, is required to be completed when trust monies have been electronically debited from its account and credited to another. This requisition form makes it necessary to record when and where the money was transmitted, by whom, and for what reason. If this documentation was not a requisite, having to source this information retroactively could prove to be time consuming and costly, especially if being audited.

 

By-Law 8 and Other Benefits

 

Outside of By-Law 9, other mandates such as By-Law 8 “Reporting and Filing Requirements,” which in part stipulates the obligation to file the Lawyer Annual Report by March 31 of each year, also serve to the benefit of the licensee. By observing this rule the firm effectively obtains an annual snapshot of the company allowing for assessment of position-to-date at least once a year. Additionally, if compliance requirements are not met or if they are completed inappropriately, there may be adverse tax consequences. By ensuring compliance and fulfilling the checks and balances established by the LSUC, the result is a set of organized comprehensive books kept in a timely fashion – this minimizes the chance of incompliance issues. Moreover, good recordkeeping is equally important for maintaining profit and for maximizing billable hours. A clean set of books makes the docketing and collecting process operate at its crest.

 

Ultimately, demands and reprimands imposed by a governing body are typically perceived as more of a nuisance than value by those who are subject to them; even in the case of the most just governances. However, when observed properly these same regulations and penalties can serve to benefit those who abide by them more than the body by which they are enforced. As it relates to the Law Society of Upper Canada bookkeeping By-Laws, a significant value exists with its licensees in particular and throughout the legal community in general.

 

©2013, Accounting for Law. All rights reserved. Reproduction with credit is permitted.

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