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Published by Prestige_Accounting on June 24, 2025

Training Your Team on Trust Accounting: Why Your Staff Could Be Putting Your License at Risk

When attorneys think about trust account compliance, most imagine bar audits, client disputes, and IOLTA reconciliation errors. But here’s the truth no one talks about enough: your staff might be your biggest vulnerability.

Whether it’s your bookkeeper, office manager, or paralegal, the people handling your trust account play a direct role in maintaining compliance—or unintentionally putting your license on the line. It only takes one small mistake to trigger a major ethical violation.

If you’re not actively training and overseeing your internal team, you’re gambling with your professional reputation.

Let’s Get Real: Staff Errors Are Still Your Responsibility

As the attorney of record, the responsibility for client funds always falls on you. It doesn’t matter if a paralegal mixed up ledgers or your office manager forgot to reconcile—you are accountable to your state bar.

In fact, disciplinary boards in states like California, Michigan, and Florida have issued suspensions and public reprimands to attorneys for trust violations committed by unsupervised or undertrained staff.

Even if it’s accidental. Even if no funds are missing.

That’s why internal training, clear systems, and routine oversight aren’t optional—they’re essential.

What Your Team Needs to Know About IOLTA

If your team is touching the trust account, they need to understand at minimum:

The purpose of an IOLTA account and why it must be separate from operating funds
What counts as client funds (spoiler: it’s not just retainers)
Why timing matters when transferring earned funds
The difference between earned and unearned income
Rules about third-party funds and disputed balances
How to maintain and reconcile ledgers for each individual client

Too often, team members rely on outdated knowledge, assumptions, or habits from past firms. That’s a disaster waiting to happen.

How to Train Your Staff (Without Becoming a Micromanager)

You don’t need to hover—you need a system. Here’s what that looks like:

1. Formalize Training at Onboarding

Whether someone is new or just taking on new responsibilities, they must be trained on your firm’s trust accounting policies from day one.

2. Use Checklists & SOPs

Create step-by-step procedures for tasks like deposits, reconciliations, disbursements, and client ledger updates. Make compliance part of the workflow.

3. Set a Monthly Review Rhythm

Even if you outsource accounting, you need to review the trust ledger and reconciliations monthly. Use three-way reconciliation tools to verify that ledgers match bank records.

4. Limit Access

Don’t give blanket access to your trust account. Use permissions-based systems and dual-authorization when possible for transfers.

5. Make Compliance a Team Value

Reinforce the why. When staff understand that mishandling client funds could cost the firm (and you) everything, they treat it with the care it deserves.

Truth Talk: Your Systems Matter More Than Your Intentions

It’s not enough to say “we take compliance seriously.” You need receipts—logs, reconciliations, training records, audit prep files, and a clear division of roles.

Ethics violations aren’t just about bad behavior. They’re about sloppy systems.

If your bookkeeper is still learning by trial and error, or your paralegal is unsure where client retainers go—you’re exposed.

CTA: Let’s Clean This Up Before It Becomes a Problem

At Prestige Accounting and Consulting, we help law firms build audit-ready systems for trust account compliance. From training your internal team to setting up workflows that eliminate risk, we’ve got you covered.

Internal training templates