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.
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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