The standards of rule 1.15 of the California Rules of Professional Conduct require attorneys to maintain the following trust account records for each client matter:

• Account journal for each trust account, organized in chronological order with the daily running balance for the overall trust account
• Client ledgers showing all receipts and disbursements for individual clients, organized in chronological order with the daily running balance
• Bank statements with copies of checks
• Monthly three-way reconciliations balancing the account journal, client ledgers, and bank statements, including support documentation required to complete monthly reconciliations, such as monthly client ledger summaries, lists of outstanding deposits, and lists of outstanding disbursements

In addition, records supporting Rules of Professional Conduct, rule 1.15, and other related statutes governing trust account recordkeeping practices include:

• Records of notices to clients or other persons of the receipt of funds within 14 days
• Records supporting all deposits and disbursements to establish compliance
• Engagement letters, fee agreements, settlement agreements, invoices or billings, and client communications regarding fees, accounting, and disputes

We recommend completing the Firm Self-Assessment with Practice Aid for a complete list of records and recordkeeping practices to evaluate compliance with the Rules of Professional Conduct and applicable law regarding the safekeeping of funds entrusted by clients or others and any related obligations.

The scope of a compliance review will encompass at least one year of trust account activity, which will generally be January 1 to December 31 of the prior year. If a compliance review identifies findings that require a licensee to participate in an investigative audit performed by the State Bar, the scope of the audit will encompass at least three (3) years of trust account activity but will not go beyond five (5) years; see Rules of the State Bar, rule 2.6(B) and Rules of Professional Conduct, rule 1.15(d)(5).

If certain records are unavailable, you must notify the CPA or State Bar reviewer as soon as possible. You may be asked to explain the reason for the missing documents and provide any alternative documentation or context available.

A client ledger is a record of all trust account transactions for a specific client or matter. The account journal is a running record of all transactions affecting the entire trust account. The client ledger tracks individual client balances, while the journal shows the total activity in the account.

All documents must be uploaded through the State Bar’s secure online portal. This system ensures encrypted, confidential transmission and complies with data privacy and privilege protections.

All records submitted for the compliance review are retained securely by the State Bar and/or CPA firm within the State Bar Audit Platform for the duration required to complete the review and fulfill regulatory obligations. The CPA firms agree that the State Bar will retain all files. Confidentiality and privilege protections remain in place. After the review is concluded, records are handled in accordance with the State Bar’s retention policies and applicable confidentiality rules.

You will be given a due date by which you must respond to each request from the State Bar/CPA reviewer. It is important to communicate proactively if you need more time, as deadlines are designed to keep the review on track.

You may contact the assigned State Bar accountant or CPA firm’s accountant directly via the contact information they provide when the review begins. You may also reach out to the State Bar’s CTAPP team for questions. The contact information for the State Bar team was included in the initial notice of selection for audit.

Poor recordkeeping, delayed responses, or lack of cooperation may prolong the compliance review and may be considered noncompliance with CTAPP requirements. Consequences can include: 

• Additional time and cost, as the CPA may need to spend more hours completing the review due to incomplete or unclear documentation 
• Serious or unresolved findings that may result in escalation to an investigative audit by the State Bar or possible referral to the Office of Chief Trial Counsel for potential disciplinary action 

Timely communication and good faith cooperation are essential. If you anticipate any delays, you are encouraged to notify the CPA or the State Bar as early as possible. Reasonable extensions may be granted when appropriate.