Who must comply with NSW + VIC solicitor trust account requirements?

Solicitors holding client trust money face strict trust account + audit requirements.

The Legal Profession Uniform Law, which applies in both New South Wales and Victoria, and the Legal Profession Uniform General Rules 2015 govern how a law practice handles trust money: money entrusted to it in connection with legal services, including costs paid in advance, controlled money and transit money. A law practice that receives trust money must maintain a general trust account, may receive trust money only if a principal or legal director holds a practising certificate authorising it, must keep complete and unalterable trust records, and must have those records examined by an external examiner for each trust examination year (1 April to 31 March). Deficiencies and irregularities must be reported in writing to the regulator (Uniform Law ss 148 and 154), and the Board may grant exemptions from trust accounting obligations on written application.

Applies when the business has client trust money and industry: Lawyers & solicitors. Where the business has industry: Lawyers & solicitors, check whether you hold trust money.

How the regulator frames it: Law practices (and, in Victoria, approved barristers' clerks) that receive trust money in NSW or Victoria, their principals and legal directors, associates authorised to operate the trust account, and Australian-registered foreign lawyers practising foreign law in the jurisdiction.

What triggers it: Receiving trust money in the course of, or in connection with, legal services. A practice that receives only controlled money or transit money (other than in cash) need not maintain a general trust account, but the money remains regulated.

Jurisdiction: New South Wales law only. A business with no operations in NSW is outside it, whatever the rest of the test says.

Outcome across the 35 industries Rules Mate maps (1 of 35: only if a further fact applies; 34 of 35: no).

Structure does not change the answer in lawyers & solicitors: for every structure the answer is "only if a further fact applies".

Size does not change the answer in lawyers & solicitors: at every size band the answer is "only if a further fact applies".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires client trust money and industry: Lawyers & solicitors.
• Pty Ltd company in lawyers & solicitors with 6–19 employees, turnover $1M–$3M: check whether it applies. applies only if you hold trust money.

The engine shows this obligation as "check whether this applies" when a business has industry: Lawyers & solicitors. It then applies only if you hold trust money. That fact is not something Rules Mate can infer from industry, structure or size.

When due

Continuous record-keeping and reconciliation; external examination for each trust examination year ending 31 March, with Victorian external examiners lodging end-of-year documentation with the Board by 31 May. A practice that ceases to be authorised to receive trust money lodges examination reports within 60 days after the relevant examination period (General Rules r 68(4)). Irregularities are notified in writing when discovered.

Frequency

Annual

Evidence to keep

General trust account and trust ledger records kept in trust accounting software or a paper ledger (not a spreadsheet, General Rules r 40); bank reconciliations; external examiner's report and end-of-trust-year Parts A and B; written notice of associates authorised at 1 July to sign trust cheques or make transfers (General Rules r 50(2)); deficiency and irregularity notifications; Victorian statutory deposit account records.

Status

Current

Priority

Critical

Maximum penalty: Causing a deficiency in a trust account or trust ledger account, or failing to pay or deliver trust money, without reasonable excuse is an offence with a maximum penalty of 500 penalty units or 5 years imprisonment or both (Victorian Legal Services Board). Failing to maintain a trust account or to produce records for external examination also attracts penalties under the Uniform Law.

Not determined: check with your adviser. Whether an independent review or audit is required turns on facts about the business, so Rules Mate does not assume either way. The facts that decide it: Do you hold or receive money on trust for clients (a trust account)? Did your law practice hold or receive trust money in the trust year to 31 March? Was it transit money only? Did your Queensland law practice hold or receive trust money in the year to 31 March? Did your law practice maintain a general trust account during the financial year (1 Jul - 30 Jun)?

Rules Mate tracks 1 published obligation tagged "legal profession", 1 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 0 of those apply outright. This obligation is rated critical priority and carries criminal liability, and is a annual obligation.

Regulated by Law Society of NSW and Victorian Legal Services Board + Commissioner.

Law Society NSW: NSW peak body + co-regulator of solicitor profession (with NSW Bar Association).

VLSB+C: Vic legal services regulator — admissions, trust accounts, complaints.

• Law Society of NSW
• Victorian Legal Services Board + Commissioner

Free tools that help with this obligation:

• Compliance calendar builder