Legal Trust Accounting Software
Reconcile trust accounts with confidence, protect client funds, and stay ready for a law society or bar audit
Client trust money is not the property of your firm, and demonstrating this every month for each client can be one of the most challenging aspects of managing a legal practice. RunSensible’s legal trust accounting software helps maintain the separation of trust and operating funds, automates the three-way reconciliation process, and generates the client ledgers and reports required by regulators, all within the same platform you already use for billing and matter management.
What is legal trust accounting software?
Legal trust accounting software is a specialized type of practice management software designed to track the money that a law firm holds on behalf of its clients, including retainers, settlement funds, and unearned fees. This software keeps these funds separate from the firm’s own operating funds. Unlike generic bookkeeping tools, legal trust accounting software enforces rules specific to lawyers. For instance, funds must never be commingled, each client must have an individual ledger, and the firm must be able to demonstrate at any time that the bank balance, the trust ledger, and each client’s balance all align.
How RunSensible keeps trust accounts compliant
Request and track trust funds by client and matter
Create trust requests with a due date, amount, and payment method, and assign each request to a specific client or matter. Log every trust transaction, including deposits, disbursements, and transfers, to the appropriate client ledger. This ensures you always know whose money is in the account and why.
Keep trust and operating funds on separate ledgers
RunSensible keeps separate ledgers for trust and operating accounts, ensuring that every transaction is clearly assigned to the appropriate account type. You can easily view all activity related to a specific client or matter and quickly check whether it involved trust funds or firm funds.
Reconcile directly, no spreadsheets required
Link your trust and operating bank accounts to reconcile transactions with your bank statement in the Accounts section. RunSensible offers multiple reconciliation paths, allowing you to reconcile trust activity directly related to client billing and payment recording. This eliminates the need to switch between your practice management tool and a separate spreadsheet.
Generate the reports
Use built-in ledger reports to view all accounts and transactions associated with a client, and generate a client statement of account whenever needed. When you reconcile directly in RunSensible, the platform keeps a record of reconciliation reports, giving you a paper trail if a regulator requires it.
Send invoices that show trust activity clearly
Legal invoices generated in RunSensible detail funds drawn from the trust, along with the remaining trust balance. This lets clients see exactly how their retainer is applied, eliminating the need for a separate trust statement to answer questions.
How the three-way trust reconciliation works
Most mistakes in trust accounting arise from viewing reconciliation as a simple comparison between the bank balance and the book balance. However, regulators require a third verification: the total of every individual client ledger. During each reconciliation period, all three figures must match exactly.
Bank statement balance
The trust account balance reported by your financial institution.
Trust ledger (book) balance
RunSensible’s internal running total of everything held in trust, across all clients.
Sum of individual ledger
every client’s trust balance, added together.
