Questions:

1. What are client trust accounts used for in a law office? a) Personal savings of the attorneys b) Holding and managing client funds for legal matters c) Paying office expenses d) Making personal investments
2. True or False: Client funds should always be kept separate from the law firm’s operating funds.
3. When should client funds be deposited into the trust account? a) Immediately upon receipt b) Only if the client insists c) At the end of each month d) When the law firm needs extra funds
4. Which of the following is an acceptable reason for withdrawing funds from a client trust account? a) Purchasing office supplies b) Paying attorney bonuses c) Reimbursement of client expenses d) Investing in stocks
5. In regards to client funds, what is commingling? a) Mixing personal and business expenses b) Investing client funds in high-risk ventures c) Using client funds for office parties d) Keeping client funds separate from firm funds
6. How often should a law office reconcile its trust account records? a) Every few years b) Once a month c) Only at the end of the year d) It’s not necessary to reconcile trust accounts
7. What information should be included on a client ledger card? a) Attorney’s personal notes b) Client’s birthdate c) Detailed record of transactions involving the client’s funds d) Office holiday schedule
8. When should interest earned on client trust funds be paid to the client? a) Never, as it’s the law firm’s profit b) Only if the client requests it c) At the end of the year, along with an annual statement d) Regularly and in accordance with local regulations
9. What’s the purpose of an “advance fee retainer”? a) A non-refundable payment for administrative work b) A fee charged to clients for initial consultations c) An amount held in trust to cover future legal services d) A discount on legal fees for long-term clients
10. In the event of a dispute over legal fees, what should the law office do with the disputed funds in the client trust account? a) Keep the funds until the dispute is resolved b) Use the funds to pay office expenses c) Transfer the funds to the attorney’s personal account d) Return the funds to the client promptly

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Answers:

1. b) Holding and managing client funds for legal matters
2. True
3. a) Immediately upon receipt
4. c) Reimbursement of client expenses
5. a) Mixing personal and business expenses
6. b) Once a month
7. c) Detailed record of transactions involving the client’s funds
8. d) Regularly and in accordance with local regulations
9. c) An amount held in trust to cover future legal services
10. d) Return the funds to the client promptly