The Cash Client and the Office Account
A client, Alhaji Bello, whom you have known for three years, brings N28m in two 'Ghana-must-go' bags to your chambers in Ikeja. He says it is part-payment for a property at Lekki priced at N95m; the seller is a company whose director he has never met; completion is 'in a few weeks'. He wants you to hold the money, pay N20m in cash to 'the boy' who will come on Friday, and keep N8m as your fee, but he refuses to sign a receipt or provide any identification beyond a business card. Your account clerk suggests paying the money into the firm's office account because 'the client account is not yet opened', and issuing a receipt in the firm's name. The firm's bank has just sent a letter asking about a N9m cash deposit made last month. Alhaji Bello adds that if you ask too many questions he will 'take the brief elsewhere'.
1. May you receive and hold the money on these terms? Identify every professional and statutory problem.
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No. Four separate problems arise.
Client account. A lawyer who holds client money must pay it into a client account, keep it separate from the firm's own money and account for it. Using the office account 'because the client account is not yet opened' is commingling and is a serious breach of the Rules of Professional Conduct for Legal Practitioners 2007. A firm that takes client money must first open the account.
Know your client. The anti-money-laundering regime - the Money Laundering (Prevention and Prohibition) Act 2022 - applies to lawyers as designated non-financial businesses and professions. It requires customer due diligence: identify the client, verify identity, ascertain the source of funds and understand the transaction. A business card is not identification; a refusal to sign a receipt is a red flag.
The payment instruction. Paying N20m in cash to an unnamed 'boy' is precisely the kind of instruction that facilitates laundering. You must pay the verified seller by cheque or transfer against verified instructions, not hand cash to an intermediary.
The fee. N8m cannot simply be deducted from client funds; you need a written fee agreement and a bill.
Declining the brief is the safer course until KYC is satisfied.
2. If you do accept the brief, what must you do with the funds and what records must you keep?
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Receipt. Open a designated client account at a reputable bank, pay the N28m in (not into the office account), and issue a proper receipt identifying the client, the amount, the date and the purpose.
Ledger. Keep a client ledger showing every receipt and disbursement, cross-referenced to the bank statements and to a file note of instructions. Keep the records for the period required by the anti-money-laundering legislation and produce them on demand.
Disbursement. Pay the seller company, not an individual agent, by cheque or bank transfer to a verified account, against a written instruction and (ideally) an executed contract or completion statement. Verify the company's incorporation and the authority of the person instructing you, and verify title before releasing purchase money.
Fee. Withdraw the N8m only when due under a signed fee agreement, and render a bill.
Refusal. If the client will not provide identification or verify the source of funds, return the money by traceable means, decline the brief and record why.
3. What are your obligations concerning the bank's letter about last month's N9m cash deposit?
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Answer the bank truthfully and promptly. If the N9m was client money wrongly paid into the office account, correct the position, move the balance to the client account and disclose what happened to the bank. Concealment would compound the original error.
Separately, if you know or suspect that the funds are the proceeds of crime, you must make a suspicious transaction report to the Nigeria Financial Intelligence Unit. The obligation is personal and continuing; it is not satisfied by the bank's own report. You must not tip off the client that a report has been made or is contemplated - tipping off is itself an offence.
The client's threat to take the brief elsewhere is irrelevant. A lawyer does not abandon statutory duties to keep a fee, and a client who refuses to be identified is a risk the lawyer is expected to recognise, not accommodate.