How Long Should You Keep Client Files? Essential Guidelines for Attorneys

Trust Account Bookkeeping
May 20, 2024

As a trusted provider of professional bookkeeping services in Orange County, California, SmartBean® understands the intricacies of managing client trust accounts and the specificities in place, particularly for attorneys. We are here to provide you with the necessary information and support to ensure you meet all the guidelines and requirements for retaining client files. One aspect that often raises questions is the duration for which attorneys must retain client files and all record-keeping documentation for client trust accounts.

We will review the required record-keeping pieces, how to keep them, and other requirements surrounding the rule. 

The Types of Files Required for Rule 1.15 and CTAPP Compliance

If you are here to determine how long an attorney must keep the saved client records, that means you are aware of the basics.

For those needing a quick reminder, via the January 2023 update of Rule 1.15, many changes to the protocol for funds being held by a lawyer or law firm occurred. All funds received or held by a lawyer or law firm for the benefit of a client or other people to whom the lawyer owes a contractual, statutory, or other legal duty, including advances for fees, costs, and expenses, are to be deposited in one or more bank accounts identified trust fund, and maintained in California.

Client trust accounts are banking accounts maintained by attorneys to hold funds belonging to a client or third party. These funds must be kept separate from the attorney’s business and personal accounts, and accurate, law-specific records must be maintained to account for them. 

You must keep a few types of bank-created and attorney or firm-created records. These include:

These records are essential for maintaining transparency and accountability in your client trust accounts. 

Rest assured, there is no one-size-fits-all approach to record-keeping. You have the flexibility to keep records electronically in a system or on paper in your own system, as long as the records are kept. The key is to find an organizational system that works best for you and can be easily combed through, whether by other firm members or auditors. 

Although the latter may not be most convenient for the organization or the sake of auditing, it is best to have some sort of organizational system that works and can be easily combed through, whether by other firm members or auditors. Non-compliance with these record-keeping requirements can lead to serious legal and professional consequences, including fines, loss of client trust, and damage to your professional reputation. This is where SmartBean®'s comprehensive trust account bookkeeping services can be invaluable in helping you stay compliant.

To ensure your law practice stays compliant, it's crucial to understand the types of files required for Rule 1.15 and CTAPP and the specific timeframes for retaining these records.

Now, let's explore how long you must maintain these records in California.

How Long is Record Retention in California?

But how long does an attorney have to keep client files in California? The answer is for a minimum of up to five years after the incident that the client initially came to the attorney for has closed.

So, once you resolve the matter and pay out all the money held to all agreeing and deserving parties, the legal record retention requirements for the attorney's system are five years.

This stipulation is set per Rule 1.15(d)(5). The California State Bar says that in the event of a disciplinary investigation, a formal process initiated by the State Bar to review an attorney's conduct, you must retain the records until the investigation concludes. This regulation must be considered in cooperation with the investigation under Bus & Prof. Code 6068 (I).

Understanding the specific timeframes for record retention in California is crucial for maintaining compliance and protecting your practice.

Now, let’s delve into the vital role that effective bookkeeping plays in managing these records and ensuring your law firm’s financial health and how SmartBean® can help you.

The Role of Bookkeeping for Orange County Law Firms

Proper bookkeeping is not just a requirement but a crucial aspect of managing client trust accounts. It ensures accurate record-keeping and helps attorneys adhere to the rules and regulations regarding their client trust accounts. Understanding and adhering to the rules regarding the retention of client trust accounts is not just a legal requirement, but a crucial aspect of your role as an attorney. It ensures compliance with the law and, more importantly, helps maintain your clients' trust and confidence in your practice.

That’s why SmartBean® provides comprehensive trust account bookkeeping services. Our services not only ensure you meet all the necessary requirements but also help you streamline your financial management, save time, and reduce the risk of errors. This allows you to focus on your legal practice while we take care of your bookkeeping needs.

Partner with SmartBean for Your Trust Accounting Needs

At SmartBean®, we are committed to making your life easier by helping you navigate these complexities with our professional bookkeeping services. We design our bookkeeping services to ensure compliance with the rules regarding retaining client trust accounts, allowing you to focus on your legal practice.

At SmartBean®, we offer a range of services tailored to support your firm’s trust accounting needs:

If you're ready to take the next step in managing your client trust accounts and ensuring compliance with all the necessary guidelines and requirements, don’t hesitate to call us for a free consultation today. We're here to support you and your practice.

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