Most attorneys have no idea how to read and understand their financial statements. When reviewing with accountants, they don’t understand that their IOLTA account should mirror their liability account and have three ways reconciliations completed every month per client. They often have a balance sheet reflecting IOLTA accounts as asset accounts when in fact, they are liability accounts.

Through many years of experience, I have seen how many law firms’ administrators deposit clients’ funds into operations accounts, specific retainer fees are transferred into IOLTA accounts, and when transfers are made from IOLTA to operations accounts, there is no record per client. Many filing and court fees are paid without being accounted for.