Why Does Client Account Reconciliation Still Take Two Days In Most UK Law Firms?
Short answer: Because most firms still run reconciliation as a monthly spreadsheet exercise, with a cashier matching bank lines, ledger entries and matter balances by hand. Done daily, automated and inside the firm's own server, the same job takes minutes, the COFA gets a signed pack ready for the SRA, the audit log writes itself, and compliance moves from a periodic anxiety to everyday work.
Today we are announcing CARE™, our purpose built client account reconciliation engine for UK law firms. CARE was built by someone who has lived this problem from the inside. As a former head of finance, I have been in the position of trusting a reconciliation process that quietly drifted, finding the issue too late to handle quickly, and ending up having to report to the SRA. The lesson I took away was direct, because if the same work had been done every day rather than at month end, the issue would have surfaced the day it happened rather than weeks later, and the report we had to make would have been a brief note about a corrected matter rather than the harder conversation it became. CARE exists so that no other COFA, no other head of finance and no other firm has to learn that lesson the same way. We have also filed for UK trademark protection on the CARE name, because we intend it to be the standard for UK law firm reconciliation rather than a passing tool. If you want to jump straight to the product, the CARE page is here.
Why is reconciliation still slow in most law firms today?
Walk into any small or mid sized UK law firm and the client account reconciliation process looks roughly the same. A cashier exports the bank statement, opens the ledger and opens a spreadsheet that has lived on a shared drive for several years, matching transactions line by line, flagging breaks, investigating them, sending emails, updating a separate matter balance schedule and comparing totals until the day ends. They come back the next morning, finish the comparison, hand the file to the COFA, the COFA reviews and signs, and the firm moves on. Total time runs to one or two working days, every month.
Multiply that across the year and a single cashier in a small firm gives up roughly twenty working days on reconciliation alone, and the number scales with the size of the firm, the number of client accounts and the number of cashiers involved. None of it is interesting work, and all of it carries personal regulatory risk for the person who signs.
The reason it stays this way is rarely incompetence, because the cashier is doing the job carefully and the COFA is signing in good faith, but the work is slow because the tools are wrong. A spreadsheet is the wrong shape for three way reconciliation across thousands of transactions, and it was the right tool for the firm of fifteen years ago, but the tooling never moved on.
What do the SRA Account Rules actually require?
The current SRA Accounts Rules, in force since 2019, set out the obligations in fewer pages than the old detailed rules, but the substance is unchanged.
Rule 7 governs withdrawals from client account, including the authorisation framework and the record keeping that has to sit behind every movement, while Rule 8 governs the operation of client account, with two parts that matter for reconciliation. The client account must be separate from office account, and reconciliation must be carried out at least every five weeks, with any differences investigated and resolved promptly.
What the Rules do not require, but the spirit of the Rules does, is timeliness. If a breach has occurred, the firm is expected to identify it without unreasonable delay, and reconciling once every five weeks means a breach can sit on the books for over a month before anyone notices, which is technically compliant but operationally fragile. Several SRA enforcement decisions over the past few years have featured firms whose reconciliation cycle was technically in.
