22 Jan




Legal Practitioners Accounts Rules 1964.


– CASH BOOK: relating to the lawyer’s office, client or a trust has 4 columns: date, particulars, debit (for money received) and credit for (expenditures) by the lawyer. In new establishments, the first cash book entry is usually Capital[1]. There should be one for client or at least a provision for client’s column in the Dr and Cr parts.

LEDGER[2]: permanently records items in the cash book over a period of time. Payments on the credit side of the Cash book are posted to the Debit Side of the Ledger and vice versa.

– RECORDS OF BILLS AND NOTICES of such bills sent to the client by the lawyer.

– JOURNAL/DAYBOOK (daily record where transactions are entered and then transferred into the ledger and cash books. Not mandatory for lawyers though.

These books, records, and accounts are usually to be kept for at least 6 years from the date of last entry.

WHEN NOT TO KEEP ACCOUNTS/RECORDS: a lawyer shall not keep accounts while in public service of the Federation or State, or as a full—time employee of a statutory corporation (NEPA, NITEL), or as an employee of a local authority.

METHODS OF RECORDING TRANSACTIONS: may be by each separate transaction; each group of similar transactions; all transactions in a given period.


:: THE LEGAL PRACTITIONERS ACCOUNTS RULES; The Confidence reposed in Legal Practitioners is such that requires fiduciary obligations. The GCB therefore enacted the Legal Practitioner’s Accounts Rules 1964 to ensure best practices and prevent misappropriation of client’s money. Section 20(2) LPA also seeks to ensure accountability. Highlights of which include:

– Personal, Client’s and Trust Money should be kept separate and not mixed.

– Adequate records of transactions and books of account kept[3]. An accounts lawyer may be employed depending on logistics and size of firm.

– The GCB can exercise oversight function[4] to ascertain whether or not the rules have been complied with. Books of account, etc., nay be required for inspection by accountant appointed by the Bar Council and the report of the Accountant may form the basis for proceedings under the LPA.

Note that client’s specific instructions to LP as to how to deal with his money supersedes the Rules.

:: Types of Account: Personal (pertaining to a person/partnership or client company… headed in the name respectively) and impersonal (subdivided into real {property and cash} and nominal {item, wages, discount, interest}… headed in the name of the subject matter or piece of work).

:: OBLIGATORY ACCOUNTS. Include the following; –Personal Account: – Client Account[5]; – Trust Account.

:: BOOKS OF ACCOUNTS, OBJECTIVES AND VALUES FOR KEEPING VARIOUS BOOKS OF ACCOUNTS; Book-keeping is needed to show a record of transactions… clearly depicting money received, expended, debtors and creditors, assets and liabilities, profit and loss, etc.

:: SOURCES OF CLIENTS MONEY; from conveyancing, negotiation, litigation, executorship, trust, investment management, Agency work, Fees on Account (Are present but not yet earned[6]), miscellaneous funds paid by client etc.



  • All money and cheques[7] he receives or holds on behalf of the client[8].
  • Money necessary for opening the account.
  • Money accidentally withdrawn from the account.

HE NEED NOT PAY INTO CLIENT’S ACCOUNT WHERE: the client’s money is in cash and paid immediately in cash to the client or a third party; cheques already delivered directly to the client himself or a third party; money already transferred into the client’s personal account (Rule 9); the client asks the lawyer not to pay into the account.

HE SHALL NOT PAY THE FOLLOWING INTO CLIENT’S ACCOUNT: WHERE CLIENT FORBIDS; payment for his legal fees; client’s payment for debt (which client acknowledged in writing); reimbursement to lawyer for expenses and costs incurred; other circumstances which the Rules or GCB stipulates. Check Rule 9.

LP CAN WITHDRAW FROM CLIENT’S ACCOUNT WHERE: the lawyer received the money in settlement of a debt the client (in writing acknowledged) owed him; for transaction or payment on behalf of the client; lawyer retains the money because of expenses and costs he incurred for the client and in respect of which he has delivered a bill of cost and intimated client of intention to defray debt with funds in account; mistakenly paid into the account. In addition (for trust account) money required for the execution of the trust, money to be transferred to client’s accountant. Other circumstances which the Rules or GCB stipulates. Check Rule 18. Provided the money should not be in excess of the funds held by the solicitor trustee.

:: PROTECTION OF CLIENT ACCOUNT: a lawyer’s debt to his bank cannot be satisfied from a client account in the same bank (merger of account). A bank or the government may inquire only about the account holder, which is the lawyer. When the lawyer dies the account will not form part of his estate. Taxes are not paid on client accounts. Note however that client’s account may be resorted to; by Judgment Creditor; in bankruptcy; tracing of illegally obtained money by appropriate authority which then attaches same.

– For Trust Money:

The rules are largely the same as that for client’s money except that a separate account must be opened for each trust. Although in Client’s money there could be a general account to service all clients. LP should account to the trust for interest earned.

Trust Account: must be opened when the lawyer is also a solicitor—trustee under the LPAR or receives money subject to a trust. The lawyer must be a sole trustee or co—trustee with a partner, clerk, or servant in his firm (not a lawyer from another firm)[9]. ‘Trustee’ or ‘Executor’ shall appear in the title of trust account.


– Money subject to the trust.

– Money necessary for opening the Trust bank account.

– Money required to be split between the trust account and another account.

– Money accidentally witdrawn from the account.

– Such money to be paid into the trust account or as court orders.


– Payment for the execution of the trust.

– Money mistakenly paid into the account by him.

– Money to be transferred to a separate bank account (usually on instruction).


– If the money is subject to a trust of which he is a solicitor trustee.

– Cash /-Cheque paid out to a third party in execution of the trust

Trustee is not liable for investment later becoming unauthorised. Note also that the Lawyer has a right (whether by way of set-off, counter claim, charge, etc) against moneys standing to the credit of a client account.


The bar council (GCB) can order (in writing, signed by its secretary and served at the lawyer’s last known address) for the inspection of the books of account of a lawyer on an application from the NBA or a third party[10], or by itself.

The lawyer ordered must supply all his books. The council could order him instead to obtain a certificate from an accountant of his choice[11] stating that his books are in form[12].


  • Record of Financial Activities and financial state of affairs.
  • Clarity in handling of various client’s money and sequestering where necessary.
  • Assess his practice.
  • Prevent mix up of funds.
  • In partnership, makes each partner know his standing and that of the partnership.
  • Prevent Misappropriation of Trust Money.

Note that unlike under Client’s account where each item of the leger is on a distinct heading. For trust account, they are not separated.

A little more on accounting:

There is the double entry book keeping style[13]: said to have originated from the Venetian Merchants of Italy. This system presupposes that for every debit, there must be a corresponding credit. The receiver is debited with the money value of what he receives and the giver is credited with the money value of what he gives.

CAPITAL is needed to startup, purchase machinery, equipment, supplies, stationery, etc. The total amount (capital, asset and cash in hand (i.e. working capital)) is called VALUE of the practice and the CAPITAL.

For Cash Account; receipts are “debited” and payments are “credited”.

For Personal Accounts; the receiver is debited while the giver is credited.

For Real Account: Property purchased is debited and property sold is credited.

For Nominal Account: expenses and losses are debited while income and gains are credited.


[1] i.e. what the LP started the practice with.

[2] Ledger is the normal debit and credit while cash book is the reverse.

[3] Solicitor Trustee should keep this record for at least 6 years-Rule 20. Same is suggested for other cases.

[4] On their own motion or on written request transmitted to GCB by NBA or Individual. Provided a prima facie case exists. The GCB may require the third party to pay a fixed amount to cover cost (of inspection and legal practitioner). All requests to by GCB to LP should be in writing and sent to his post appearing on the SCourt Register. He is deemed to have received after the tenth day of posting.

[5] Which may be current or deposit (not savings) in the Lawyer’s name with “client” in title. One may be opened for each client or one for all clients.

[6] Counsel must remit same to client if the work is not carried out. Quantum Meruit may be applied where part of the work is done.

[7] Which he did not split.

[8] This may have been received as agent, bailee, stakeholder or other capacity.

[9] Controlled trust. It appears that reference to trust here means deceased person’s estate.

[10] There should be a prima facie case and may be required to pay money to cover cost of inspection

[11] Where he fails to elect one, the GCB would choose. Rule 21 and 22.

[12] Such can only be done if it is GCB or NBA that inquires.

[13] Note whether these are also types of books that should be kept by LP as sub topic’d above.


Quite eccentric really

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