Trust accounting handled
to the letter

Every state bar has rules governing client trust accounts, and while the details differ, the principles don't: client money must be held separately, must never be used for firm expenses, must be reconciled regularly, and must be accounted for per client at all times.

The violations that generate discipline are almost never theft. They're a filing fee paid from trust before it was earned, an earned fee left sitting in trust for months, a bank charge deducted from the trust account, or a reconciliation that hasn't been done properly since the bookkeeper left. Every one of those is an administrative failure, and every one is reportable.

Three-way reconciliation is the control that catches all of it. Bank balance, trust ledger balance, and the sum of individual client balances must agree, every month. Many firms do a bank reconciliation and stop there, which misses the entire point — the third leg is what proves no client's money has been used for another's matter.

Then there's the earned-versus-unearned line. A retainer is client money until the work is done. Moving it to operating early is a violation even if the work is eventually performed, and it's the single most common way otherwise careful firms get into trouble.

Beyond compliance sits the business question most firms can't answer: which practice areas and which matters actually make money once you count the hours that were written off.