How to Manage Money in a Law Practice

Client Trust Duties, Fees, and Financial Systems

Attorneys rarely lose their licenses over bad lawyering. They lose them over money that was not where it was supposed to be.

Almost none of it starts as dishonesty. It starts with a slow quarter, a payroll date, and a trust balance sitting right there holding a fee you are genuinely going to earn next month. The lawyer in that moment is not a criminal. The lawyer in that moment is exhausted, frightened, and out of options they can see.

This two-hour program is about the rules and the systems that keep you out of that moment. Rule 1.15 in detail, including the numbers a disciplinary investigator can check without any judgment call: fourteen days to notify a client, monthly reconciliation, five-year retention, and the forty-five day presumption that shifts the burden onto you. The flat fee exception that most small firms are quietly out of compliance with. The difference between a true retainer and an advance, which is one sentence in a fee agreement and a world of difference in a disciplinary file. And the firm controls that make all of it automatic.

You will leave with a trust account controls checklist, a fee agreement audit you can run against every template you use, and a case study we work through together.

I ran two law firms and have been through an IRS audit. This is the course I wish someone had given me first.

Schedule:

Time Subject

0:00 – 0:03 Welcome and objectives
0:03 – 0:18 Money pressure and your capacity to practice competently
0:18 – 0:48 Client trust duties: Rule 1.15 and the recordkeeping standards
0:48 – 1:08 Fees: unconscionability, true retainers, flat fees, refunds, fee divisions
1:08 – 1:10 Stretch break
1:10 – 1:30 Firm financial systems and supervision under Rules 5.1 and 5.3
1:30 – 1:50 When money pressure becomes a competence problem
1:50 – 2:05 Case study: the flat fee, the operating account, and the shortfall
2:05 – 2:10 Quiz, evaluation and certificate

Unlike other professions, attorneys have critical financial, fiduciary and ethical duties. These burdensome competency requirements demand high levels of personal performance, year in and year out. Failure to properly perform any of these broad mandates can lead to complaints, public reprimands, suspension and debarment.

Money Managers observe and respond to the movement of money within your business. You must create your company’s financial value by documenting the cashflow. This requires managing accountants and bookkeepers and overseeing the payment of salaries, goods and services, and taxes. As a manager, you must create an information infrastructure that you can actually use, along with a culture of how best to interact with that infrastructure.

Money Managing It is a huge responsibility and takes a great deal of time, focus, and resources.

State bar associations across the country are advocating for law firms to begin changing their company cultures in order to support lawyers in maintaining their wellness. As a Money Manager, your challenge is to create a money system that supports attorneys to stay in the flow of excellence every day. You also have to be an inspiration to other attorneys, and walk your talk. It is obvious that most attorneys cannot meet these challenges, and for this reason good Money Managers are extremely valuable. When compared to the general population, attorneys suffer from twice as many incidents of substance use disorders and mental health issues. Furthermore, increasing numbers of attorneys are being disciplined, sued and incarcerated for wrongdoing in their roles as lawyers. Much of this wrongdoing involves money, trust account funds, and breaches of fiduciary duties and duties of trust.

Law firms’ reputations suffer when they go broke and have to overpromise, underdeliver, and take every case just to stay alive. Attorneys have a daunting task in complying with a wide range of mandatory duties, and to include these tasks in their “billable hours”:

• Competence (Model Rules 1.1)
  • A lawyer shall provide competent representation to a client.
  • Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.
• Diligence (Model Rules 1.3)
  • A lawyer shall act with reasonable diligence and promptness in representing a client.
• Communication (Model Rules 1.4)
  • A lawyer shall obtain informed consent
  • A lawyer shall keep client reasonably informed.
  • A lawyer shall comply with reasonable requests for information.
• Conflict of Interest (Model Rules 1.7)
  • Representation must not be limited by a personal interest of the attorney
• Safekeeping Property (Model Rules 1.15)
  • Duty of trustee for client monies
• Declining or Terminating Representation (Model Rules 1.16)
  • When a lawyer’s health (mental or physical) interferes with their ability to practice effectively, they have an ethical duty to step down.
• Expediting Litigation (Model Rules 3.2)
  • A lawyer shall make reasonable efforts to expedite litigation
    consistent with the interests of the client
• Misconduct (Model Rules 8.4)
  • Lawyers cannot Commit a criminal act that reflects adversely on the honesty,
    trustworthiness, or fitness as a lawyer. This includes DUI and Illegal drug use or possession

Many attorneys avoid being Money Managers because of the extra demands and emotional drainage of being responsible for balance sheets, profits and loss, and cash flow projections. However, there is a systematic way to learn Money Management skills that, when mastered, make it easier to handle the responsibility. In order to have a long and truly successful career as a Money Manageer  in the law, you have to first understand yourself and any past trauma you may have endured regarding money. You have to know your strengths and weaknesses in dealing with money. You must understand your resistance to working openly with other professionals and talking about money with your staff. Without this critical data, you cannot master the fundamentals areas that are mandatory to becoming a successful Money Manager.

All attorneys have blind spots, so it is normal to feel frustrated and struggle in mastering these critical skills. It is painful, humiliating and inevitable to make mistakes as a Money Manager. What is worse is to keep making the same mistakes over and over again, and find yourself in a dire financial crisis month after month.

Cashflow Game

ABOUT ACTUALIS ATTORNEY WELLNESS AND MARK C. DALY:

Even before becoming an attorney in 1999, I learned how to develop my personal and professional skills by attending workshops, educating myself, getting peer support, and hiring professional coaches and therapists. I learned how to bring out the best in myself, my companies and the teams I supervised in my legal career. Over the past 20 years I have become a certified professional coach and a certified Shadow Work ® coach and facilitator. I am a Registered, Non-Licensed Therapist in the State of Colorado with strict duties of confidentiality, which is very necessary when working with attorneys! I have taken courses in Voice Dialogue, Gottman Marriage Counseling and Emotionally Focused Therapy. I have used these skills to coach executives, managing and associate attorneys, as well as support staff, to become more satisfied and successful practicing law. Since 2004 I have been a registered CLE provider. I have coached and mentored dozens of attorneys in law office start up, practice management, and immigration law fundamentals.

I have been an immigration attorney for 26 years. In the beginning, I struggled financially, emotionally, physically and spiritually. I have been married, divorced, and finally remarried in 2010. As a single dad dealing with a traumatic divorce, I know what it is like to mismanage a law office, break rules of competence and act unethically. Through it all, I have managed to learn from my mistakes and gain mastery in the 5 fundamental areas of attorney wellness – Leadership, Management, Finances, Mental Health and Physical Health. I twice started, built up, managed, and sold successful law practices in Nashville and Denver, and now I am financially free. I maintain excellent and loving relationships with my wife and grown children, and I have a great relationship with my extended family and even my ex-wife! In 2025, my wife and I went on a one-year sabbatical around the world to learn, grow, relax and enjoy life. I gained a better understanding of myself, and decided to become an inactive attorney and launch Actualis Attorney Wellness. My primary aim is to help attorneys feel good, enjoy life, and do the right thing.