Brave things do not simply occur. -Charlie Fowler
I have the darndest time admitting that I don’t know something I ought to already know. I’m fine going to continuing education on new rules or some advanced technique. I’m not fine admitting that I don’t know – especially when I should. That’s why I was not surprised when North Carolina’s State Bar found that “[m]ost lawyers fail to reconcile their trust accounts because they do not understand how to reconcile.”1 Reconciliation isn’t just a good idea, it is the best practice.
Some jurisdictions require that attorneys keep client property safe generally, that is, they do not require them to reconcile. Reconcile anyway, reconciling is the best practice.
Are You Trapped?
I get it. You may be reading this because you feel trapped. In jurisdictions where reconciling is required, if you didn’t know how to reconcile when you started your client trust account, where do you go for instruction? If you go to the bar do you have to self-report? If you reach out to a lawyer friend, is a duty to report triggered? And then, there is the simple embarrassment of admitting you don’t know. Lawyers faced with this situation often feel, at least to some degree, trapped.
Do You Over-rely On Your Software?
The North Carolina Bar further found that “this lack of understanding is compounded by an overreliance on trust accounting software that readily produces a report called a “Reconciliation Summary” or a report with a name that includes the word “reconciliation.” The report with the seemingly appropriate name creates a false sense of security because, although the report may confirm that the trust account total and the balance shown on the bank statement are consistent, the report does not satisfy the … reconciliation requirements.”2
In other words, you may have believed that you were reconciling (because you rely on your software reconciliation report) when in fact you are not. Software that reconciles for you is a gift from heaven – but it must be reconciled against your actual bank statement.
Ready to Do Something Brave?
Charlie Fowler may have been right, brave things do not just occur. Here is a Step by Step Guide to Attorney Trust Account Reconciliation. Regardless of what your current practice may be, this is an opportunity to start reconciling your account today.