Legal Fees, Billing, Accounting and Trust Accounts
This domain tests how fees are agreed, billed and collected, and how client money is held and accounted for. It is the highest-risk area for professional discipline, because mishandling client money can end a career as well as found a criminal case.
Agreeing the fee
Put the basis in writing before work starts: fixed fee, hourly rate, retainer or scale. State what it covers, that disbursements are additional, and that VAT, NHIL and the GETFund levy apply to legal services at the prevailing rates. Set the billing cycle and any interest on overdue bills. Review estimates when scope changes. Contingency or success-based arrangements are not routine; any such structure must be lawful, in writing, and must not amount to fee-sharing with an unqualified person.
Billing discipline
Record time contemporaneously, bill promptly with a clear narrative, list disbursements separately, and deliver a bill of costs with the account. The client may ask the court to tax the bill.
Trust and office accounts
- Client money goes into the client account at the same or next banking day; firm money stays in the office account.
- Keep a ledger for each client and matter, issue receipts for every payment received, and reconcile the bank balance to the sum of client ledgers monthly.
- Use dual authorisation on payments and never draw cash from the client account for office expenses.
- Pay out only against a delivered bill or the client's written authority, and keep the client account free of any deficit at all times.
Worked example
A settlement cheque for GHS 80,000 arrives in the client's name. Reasoning: open a ledger, bank it into the client account, issue a receipt and confirm receipt to the client in writing. When the bill for the agreed GHS 12,000 plus VAT is delivered, deduct that sum by transfer to the office account, pay the balance to the client, and record both entries. Reconcile at month end so the ledger shows nil.
Traps that cost marks
Borrowing client money to meet payroll, which is misappropriation. Using one client's funds to pay another's disbursement. Delay in banking receipts. Taking fees with no bill. Failing to account for interest earned on client funds.