Long-outstanding client ledger balances in situations of a practice takeover
Regulation of Practice Committee
The Regulation of Practice Committee, which monitors compliance with the Solicitors Accounts Regulations 2014, wishes to draw attention to the issue of long-outstanding balances on the client ledger in situations where a firm is acquiring, taking over, or merging with another firm. This is an issue that the Regulation of Practice Committee frequently encounters in the course of fulfilling its statutory duties. In general, long-outstanding client ledger balances may relate to moneys to which the solicitor is beneficially entitled, or to moneys held for or on behalf of clients.
Practices should be aware that, in a situation where a firm acquires, takes over or merges with another practice, it is the responsibility of the new practice to deal with these long-outstanding balances.
Firms should ensure that, when taking over, acquiring or merging with a practice, all client ledger balances are examined prior to takeover, and the assistance of the former firm is obtained to ensure these matters can be appropriately dealt with.
Solicitors’ attention is drawn to the practice note entitled ‘Long-outstanding client ledger balances’, published by the Law Society on 7 September 2018 and available on the Society’s website.