Law Firm Bookkeeping

If you’re a California attorney, chances are your inbox has been full of State Bar notices lately: CTAPP registration reminders, trust accounting webinars, compliance declarations, and “optional” training invitations that don’t feel optional at all. It’s enough to make you wonder if the Bar’s primary mission quietly shifted from regulating ethics to auditing your bookkeeping.

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The truth is, none of this is new. The State Bar didn’t invent these requirements in 2023. It’s finally enforcing a rule that’s been around since 1993.

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A Rule Decades in the Making

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The requirement to perform monthly IOLTA three-way reconciliations—balancing your trust account journal, client ledgers, and bank statements—has existed for more than thirty years.

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Back in 1993, California adopted the Trust Account Record Keeping Standards under Rule 4-100(C). These standards established the duty to document every reconciliation, maintain detailed ledgers, and keep client funds separate from operating accounts. When the Rules of Professional Conduct were reorganized in 2018, Rule 4-100 became Rule 1.15, and that same language was carried forward almost word for word.

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In short, the reconciliation requirement isn’t new. The enforcement mechanism is.

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Enter CTAPP and the Girardi Fallout

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The Client Trust Account Protection Program (CTAPP) was introduced in 2023 in direct response to the Tom Girardi scandal, a decades-long case of client-fund theft that exposed the State Bar’s lack of oversight.

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CTAPP didn’t change Rule 1.15. It gave it teeth.

Now, every California attorney must register all trust accounts, complete an annual self-assessment, and attest to ongoing compliance. The Bar can request proof at any time, and failure to produce it can result in administrative suspension.

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For attorneys who have maintained proper ledgers, journals, and reconciliations all along, nothing changes. But for many small firms and solo practitioners, CTAPP feels like a brand-new mountain to climb.

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Why It Feels New and Why That’s Understandable

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Most practicing attorneys today were admitted after 1993. So even though the rule has existed for decades, it hasn’t always been enforced, taught, or prioritized.

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Large firms often have in-house accounting teams trained in trust-account procedures, but smaller firms rarely do. Managing partners are suddenly being asked to master trust-account bookkeeping, a discipline that sits much closer to accounting than to law. 

 

That’s not negligence. That’s just reality.

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A New Burden, an Old Purpose

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Let’s be honest. Maintaining full compliance with monthly IOLTA reconciliations, ledgers, and journals takes time, money, and expertise. The Bar’s goal is client protection, and that’s valid. But the rising complexity of compliance requirements can unintentionally limit access to justice, squeezing out smaller firms that can’t afford full-time accounting staff.

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That’s where support matters.

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At Chief Bookkeeping Officer, we help California attorneys and law firms perform accurate, auditable IOLTA three-way reconciliations, maintain compliant trust ledgers, and implement repeatable monthly close procedures that satisfy Rule 1.15 and CTAPP without sacrificing billable hours or peace of mind.

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The Takeaway

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The rule has been around since 1993. The program started in 2023. And between them lies the gap where most attorneys now find themselves: trying to bridge ethics, compliance, and operations in an increasingly complex environment.

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If you’ve been treating IOLTA reconciliation as optional, now’s the time to close that gap. Not out of fear, but out of foresight. Because protecting your clients’ funds shouldn’t cost you your focus on serving them.

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Need help staying compliant with CTAPP?

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Chief Bookkeeping Officer provides California attorneys with specialized trust-account bookkeeping and monthly IOLTA three-way reconciliations.