Initially, attorneys selected for compliance review will represent a cross-section of the legal community. In the future, the State Bar may select attorneys using a risk-based and random selection criteria. Factors may include prior trust account activity, self-reported information through CTAPP registration, or other factors driven by State Bar data and oversight priorities. Being selected for a compliance review is not, by itself, an indication of misconduct.

When the State Bar selects an attorney for a compliance review, the review is conducted on the firm’s trust accounting practices. The cost of a compliance review will generally range between $5,000 and $10,000. However, poor recordkeeping, slow response times in turning over requested documents, and unclear communications will generally require the CPA to spend more time completing the compliance review, potentially increasing the cost. On the other hand, records that are well-maintained and comply with the rules outlined in the scope of the compliance review procedures published for public comment will likely result in lower costs to attorneys.

To qualify for an exemption, supporting documentation must show gross revenue (gross receipts) before expenses are deducted of $150,000 or less. The supporting documentation is generally Schedule C of the attorney’s tax return. There is no appeal process because the criteria is objective.

After you select a CPA firm and the State Bar has assigned the compliance review engagement to the CPA firm, you will be contacted directly by the CPA firm, who may request additional records, ask clarifying questions, and coordinate with you for the remainder of the compliance review process. The State Bar will remain available to assist if needed.