A Miami 4-attorney firm had never performed three-way IOLTA trust reconciliation, a Florida Bar requirement. We resolved $28K in unidentified trust funds before they triggered a bar investigation.
01The Situation
Florida Bar regulations require monthly three-way IOLTA reconciliation. The firm had a part-time bookkeeper with no trust accounting training. It had never been done. When a departing client asked for a detailed trust accounting, the firm discovered $28K in trust entries that could not be matched to specific clients.
Unidentified trust funds and non-compliance with IOLTA rules can trigger bar discipline, including suspension.
02What We Did
We traced three years of trust account transactions against client ledgers and bank statements. The $28K was traced to four sources: uncashed settlement checks, a relocated client, an unresolved fee dispute, and a prior disbursement calculation error. All resolved through appropriate legal procedures.
Going forward: monthly three-way reconciliation built into the close process. Billable hours, realization rates, and WIP tracked by attorney for the first time.
03Client Impact
The $28K in unidentified funds could have triggered a state bar investigation if discovered in a routine audit. Getting the IOLTA account clean was not just bookkeeping, it was risk management.
This result came from our bookkeeping services for professional services firms. See more client results.
Breakdown
| Attorney | Hours Billed | Avg Rate | Revenue Billed | Collected | Realization |
|---|---|---|---|---|---|
| Partner 1 | 1,840 | $450/hr | $828,000 | $786,600 | 95% |
| Partner 2 | 1,620 | $420/hr | $680,400 | $639,600 | 94% |
| Associate 1 | 1,920 | $280/hr | $537,600 | $483,840 | 90% |
| Associate 2 | 1,680 | $260/hr | $436,800 | $392,800 | 90% |
| TOTAL | 7,060 | $370 blended | $2,482,800 | $2,302,840 | 92.7% |
What changed
IOLTA Three-Way Reconciliation Implemented
Monthly trust compliance now fully met. Florida Bar requirement satisfied for the first time.
$28K Unidentified Trust Funds Resolved
Four root causes identified and resolved. Trust ledger reconciles perfectly.
Bar Discipline Risk Eliminated
Unidentified trust funds and non-compliance are grounds for suspension in Florida. Risk fully resolved.
Attorney-Level Revenue Tracking Built
Hours, realization rates, and WIP tracked by attorney. Managing partner has performance visibility for first time.
The $28K in unidentified funds could have triggered a state bar investigation if discovered in a routine audit. Getting the IOLTA account clean was not just bookkeeping, it was risk management.
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