Uncovering the Mystery of IOLTA Accounts

Law and Quarter

IOLTA Accounts are trust accounts that collect interest and are used to provide free or low-cost civil legal services. Operating accounts and trust accounts are the main difference between a law practice and other businesses. Retainers must go into the trust account, fees come out of the operating account, and money is transferred from the trust account to the operating account when it is earned. Proper record keeping is necessary and a three-way reconciliation report is usually required. Funds should not be used to pay operating expenses and all unclear transactions should be handled according to state guidelines. The book balance, bank balance, and balance by matter should all match up. "If you follow these rules, this will minimize the risk of commingling funds and you're losing your license." In this episode, you will learn the following: 1. What are the general rules that apply to an IOLTA account and how can law firm owners understand this concept without difficulty? 2. How should law firms handle retainers properly and what are the record-keeping requirements for IOLTA accounts? 3. How can law firms use CosmoLex to track IOLTA account funds and prevent commingling of funds? For more episodes and a free Law Firm Owner Profit Toolkit, go to https://lawandprofit.com