By-Law 9: how NEO handles money held in trust

When you give a paralegal money before the work is done, such as a retainer deposit or money to pay a filing fee, it must be kept in a separate trust account. The Law Society of Ontario's By-Law 9 sets the rules for that account.

What By-Law 9 requires

• Client money is kept in a trust account at a bank, separate from the firm's own money.
• Money is moved out of trust only for permitted reasons, such as paying a fee after an invoice is delivered, or paying a cost on the client's behalf.
• Every deposit and withdrawal is recorded, with a ledger for each client.
• The trust records are compared with the bank statement every month (a monthly trust reconciliation).
• There are limits on accepting cash.

The checks NEO runs

• Each client's trust ledger is kept in our practice system, so we can see at any time how much we hold for you.
• Bank activity is matched to the records, and the month-end comparison is checked against the bank balance.
• An internal audit view highlights anything that doesn't match, so it is dealt with promptly.
• Every trust entry is tied to a specific matter.

What you can expect

You will see money held in trust for you on your statements and invoices, and you can ask at any time for a statement of your trust ledger. When a matter ends, any money left in trust is returned to you.

Sources

• Law Society of Ontario By-Law 9

Read next: Why NEO carries professional liability insurance

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This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.