Trust Accounting for Ontario Law Firms: Staying Onside with the Law Society
For lawyers and paralegals, trust accounting isn’t just bookkeeping — it’s a professional obligation. The Law Society of Ontario sets strict rules for handling client money, and a small slip can turn into a real compliance problem. Here’s what firms need to keep in order.
The trust rules, in plain terms
Client money held in trust has to be kept separate from your firm’s own funds, recorded precisely, and reconciled every month. You need to be able to show, at any time, exactly whose money is in the trust account and why. The Law Society can review these records, and “we’ll sort it out later” is not a defence.
Where firms get into trouble
Late or missing monthly trust reconciliations, sloppy records, mixing trust and general funds, and falling behind when the practice gets busy. None of these are hard to avoid with a proper monthly process — they only become problems when trust accounting is treated as an afterthought.
One firm, one clean set of books
The simplest solution is to have your trust reconciliations, general bookkeeping and tax handled together, by a CPA who knows the requirements, so your trust account is always audit-ready. See how we support law firms →
General information, not specific advice — always follow your Law Society obligations.
FAQ
How often do trust accounts need to be reconciled? Monthly, to Law Society of Ontario standards, with records you can produce on request.
What happens if my trust records aren’t in order? It can become a compliance issue on review. A clean monthly process avoids it entirely.
Do the rules apply to paralegals too? Yes — both lawyers and paralegals handling client funds are covered.
Can you handle trust and my firm’s regular books and tax? Yes — all under one roof.
