Trust Accounts & Client Money: Compliance Tips for Pakistani Law Firms

The moment a lawyer holds money on behalf of a client — a settlement received, an advance against costs, funds held pending a transaction — a duty arises that is older than any statute: keep it separate, keep it accounted for, and never treat it as your own. In Pakistan, as everywhere, mishandling client money is among the fastest routes to professional difficulty.

The first rule: separation

Client money should never sit in the same account as the firm’s own funds. Commingling is the root of almost every trust-account problem — not because of dishonesty, but because once funds are mixed it becomes impossible to say with certainty whose money is whose. A dedicated client account, used only for client funds, is the foundation of everything else.

• Hold client funds in a separate, identified account
• Record every receipt and payment against the client and matter
• Reconcile the ledger to the bank regularly
• Never use one client’s funds to cover another’s shortfall

A defensible ledger

If a client — or a regulator — ever asks where the money went, the answer must be available in minutes, not days. A defensible ledger shows, for each matter, what came in, what went out, when, and why, with a running balance that reconciles to the bank. The work of building that record is small if done as you go, and painful if left until questioned.

How Legal Diary helps

Legal Diary includes a dedicated Trust Account module that keeps client funds ledgered by matter, separate from your billing, with reconciliation in mind. Every receipt and disbursement is tied to a client and a matter, so your trust position is always current and always defensible — exactly what Bar Council compliance expects.

Keep client money clean and accountable — start your free Legal Diary trial today.