Following on from last week’s blog about the introduction of the new Solicitors Accounts Regulations 2023, it’s worth bearing in mind that the existing Solicitors Accounts Regulations 2014 remain applicable for any accounting period that commenced before 1 July 2023, until such time as the solicitor has filed the Reporting Accountant’s report with the Law Society.

Here is a list of some of the changing and new requirements for the accounting by solicitors:

  • Balancing statements must be prepared quarterly for client-account transactions;
  • A list of client ledger balances outstanding for two years or more must be prepared at the accounting date, and given to the Law Society by the Reporting Accountant;
  • A separate client bank account is no longer needed where a solicitor is acting as the personal representative of an estate;
  • Client ledger balances must be reviewed for undue/unnecessary delays in discharging client moneys. Immediate action must be taken to clear same, where appropriate;
  • Clients are to be given a statement of account for each matter;
  • Client moneys are to be returned to clients when the legal service is completed;
  • Evidence of payments in cash must include the witnessed signature of the recipient;
  • Transfers of funds from the ‘client’ to the ‘office’ account must be for specific clients;
  • The Law Society must be notified where a deficit cannot be rectified within seven days of the deficit coming to the solicitor’s attention;
  • Cheque signatories or transaction authorisers on the client account are to include a solicitor who is a partner or a sole practitioner with a current practising certificate;
  • A ‘Register of Undertakings’ and of ‘Funds Held On Joint Deposit’ are to be maintained;
  • A file of documents or record for electronic transfers must be maintained;
  • The Compliance Partner is to provide specific confirmation to the Law Society, through the ‘Form of Acknowledgement’, of compliance with the regulations in respect of:
    • balancing statements;
    • balances outstanding two years or more;
    • review of client-ledger balances for undue or unnecessary delays; and
    • back-up of computerised accounting systems.
  • Borrowing/lending/organising loans from/to Client Accounts are prohibited, as are loans between Client Accounts;
  • Client accounts must not hold moneys other than for the legal services provided;
  • Client accounts are not to be used to hold/pass through, solicitors’ personal moneys;
  • Responsibility for breach of the regulations extends to the solicitor responsible for the actual breach, and not just the principal or partners of the firm;
  • The Law Society may conduct investigations remotely;
  • The Law Society may instruct an authorised person to communicate with such persons and seek such information and documentation as the Society considers necessary.

The full text of the Regulations is here.

Please go to our website to see our new ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at

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Publications and AML webinars:

  • The ISQM TOOLKIT 2022 is available to purchase here.
  • See our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
  • Also we have an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
  • To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.