Client Account
A client account is a separately designated bank account, regulated under the SRA Accounts Rules 2019, in which a law firm holds money received from or for a client. Client account funds must be kept distinct from the firm's office funds, must be paid out only for the purpose for which they were received, and must be reconciled at least every five weeks. Misuse of client account funds is an SRA disciplinary offence and a frequent vector for money laundering through legal practice.
AML risk in the client account comes from receiving funds without a clearly identified underlying legal service, holding funds for unusually long periods, or routing funds through the firm to a third party. The SRA expects firms to refuse client-account use as a 'banking service' and to question any payment instruction that doesn't fit the matter.
Other terms that go with Client Account
Mixed funds arise when client money and office money are held together in a single bank account in breach of the SRA Accounts Rules 2019. Mixed funds are an AML concern because they can mask the source of payments leaving the firm and create reconciliation gaps — both of which can support a money laundering case if proceeds of crime are involved.
Money laundering is the process of disguising the proceeds of crime so they appear to come from a legitimate source. Under the Proceeds of Crime Act 2002 (POCA), the principal money laundering offences are concealing criminal property (s.327), entering into arrangements that facilitate it (s.328), and acquiring, using, or possessing criminal property (s.329). All three carry maximum penalties of 14 years' imprisonment.
The Solicitors Regulation Authority is the independent regulator of solicitors and law firms in England and Wales. It is the supervisory authority under MLR 2017 for SRA-regulated firms — issuing AML guidance, conducting thematic and on-site reviews, and imposing fines, conditions, or strike-offs for failures. SRA fines for individual AML breaches can reach £25,000; firm-level fines can exceed £250m for traditional firms (lower caps apply to alternative business structures).
Put Client Account into practice with Certivus
Knowing the term is the first step. Certivus gives you the workflows — client intake, CDD, EDD, PEP and sanctions screening, audit-ready records — to apply it across every client.
Back to the full glossary