Trust Account Management

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Trust account management is the process of tracking client funds given in trust separately from your law firm's operating funds. If your firm accepts client trust funds, there are industry rules that you need to follow when managing these funds in order to remain compliant. Clio can help you do everything from creating and retaining trust funds to using trust funds to pay client invoices and refunding or disbursing funds in accordance with industry rules.

Note: You cannot charge interest or offer early payment discount on trust funds. Additionally, payments made on trust requests are always deposited into a Clio trust account in full, in compliance with IOLTA rules.

Tip: When applying payments to trust requests, you can either manually record payments on transactions or accept credit card, debit card, Apple Pay, or Google Pay payments that deposit funds directly into trust accounts using Clio Payments. Learn more about signing up for Clio Payments here.

Create trust accounts

Before creating a trust request and accepting payment, you will need to create a trust account in Clio Manage that the paid trust funds will be stored in. To create a trust account:

  1. Got to Accounts.
  2. Click New account.
  3. Name the account and select Trust Account for the Account type.
  4. Enter the remaining details for the trust account.
  5. Click Create New Bank Account.
  6. Optional: If you have Clio Payments enabled, click Connect to payments to accept credit card and eCheck payments.
    • Enter the Account number and Routing number for this bank account and then click Connect bank account. Contact your financial institution for these numbers.

 

Create trust requests

In Clio Manage, you can create trust requests to collect initial trust deposits or retainers from your clients, or to add more trust funds to a matter if the trust funds reach a minimum threshold. Trust requests do not include any time or expense activities. You can create a trust request from the contact's Dashboard, matter's Dashboard, the main Billing tab, or the global Create new menu.

Note: Trust funds can be stored at the client or matter level. You can select where to store these funds when creating the trust request. You can also move funds from the client level to the matter level by transferring them. Learn more about transferring funds below.

Contacts page Matters page Billing tab Create new menu
  1. Click New trust request.
  2. Complete the trust request details
  3. Optional: Check the box for Skip the trust approval process. If you check this box, you can send the trust request directly to a client without requiring approval from another firm member.
  4. Click Save trust request.
Important: If you skip the trust approval process, you cannot edit the trust request once it has been generated.

 

Sort and filter trust requests

Once a trust request is created, you can find it in the Billing tab or the Bills subtab within a matter or contact. The trust request is differentiated from normal bills when viewing the bill Id. The bill Id will have the word “Trust” written in parenthesis next to the bill Id number. To view only trust requests:

  1. Go to Billing.
  2. Select the All subtab.
  3. Click Filters.
  4. Optional: select the matter or contact.
  5. Under Type select Trust.
  6. Click Apply filters.

 

Edit trust requests

You can only edit a trust request if it is in draft and the trust approval process has not been skipped. Generated trust requests in draft have limited edit functionality compared to generated bills in draft. To edit a generated trust request:

  1. Go to Billing or the Bills tab in a contact or matter.
  2. Click the Draft subtab.
  3. Click Edit.
  4. Make your changes.
  5. Click Save trust request.

 

Approve trust requests

When a trust request is created and you do not check the box to skip the trust approval process, the trust request can be found in the Draft subtab in Billing. While in draft, you can edit the trust request and send it for approval and approve the trust request. Once approved, you can accept payment for the trust request.

Tip: You can also approve a draft trust request rather than submit it for approval. In the edit dropdown, click Approve trust request instead of Submit for approval.
Send the trust request for approval Approve a trust request
  1. Go to Billing or the Bills tab in a contact or matter.
  2. Click the Draft subtab.
  3. Click the down arrow next to Edit and select Submit for approval.
  4. Select the firm member(s) who need to approval the trust request.
  5. Click Submit for approval.

 

Send trust requests

Once a trust request is approved, you can send it to the client. You can also send the trust request to other related contacts.

Tip: If you are using Clio Payments, your client can pay the trust request amount directly from their bill email via credit card. Learn more about Clio Payments here.
  1. Go to Billing or the Bills tab in a contact or matter.
  2. Click the Unpaid subtab.
  3. Click Send.
  4. Select the trust bill template, make any changes, and select the send method. Learn more about sending bills and options in this article.
  5. Click Send trust request.

 

Delete trust requests

If a trust request is still in draft, you can still delete the request. A trust request that has been approved but does not have a recorded payment can only be voided.

Important: You cannot void a trust request once payment has been recorded.
  1. Go to Billing or the Bills tab in a contact or matter.
  2. Click the Draft subtab.
  3. Click the down arrow next to Edit and select Delete trust request. You can also view the trust request, click the More actions dropdown and select Delete.
  4. When the warning prompt appears, click Delete trust request.

 

Void trust requests

Follow these steps to void an approved and unpaid trust request:

  1. Go to Billing or the Bills tab in a contact or matter.
  2. Click the Pending approval subtab.
  3. Click the down arrow next to Edit and select Void trust request. You can also view the trust request, click the More actions dropdown and select Void.
  4. When the warning prompt appears, click Void trust request.

 

Record payments on trust requests

If you do not have Clio Payments enabled, or if your client does not want to pay by credit card online, you can record the payment as a direct payment in Clio. Follow the steps below to record a trust request payment.

Important: You can only record payment for a multi-matter bill using contact-level trust funds. If the trust funds are associated with a matter, transfer the funds from the matter to the contact before recording payment on the bill.

  1. Go to Billing or the Bills tab in a contact or matter.
  2. Optional: Select the Unpaid subtab.
  3. Click the down arrow next to Send and click Record payment. You can also click Record payment in the upper right corner.
  4. Select the payment source and select the client’s trust account as the deposit account.
  5. Complete the remaining details.
  6. Click Record payment.

 

Record new transactions

If you need to record a new trust transaction without creating a trust request, you can do so from within the contact or matter's Transactions subtabs or from the main Accounts tab.

Contact's Transactions Matter's Transactions Accounts
  1. Go the the contact and click the Transactions subtab.
  2. Under Transactions, select the appropriate trust account that the funds are being deposited into.
  3. Complete the remaining necessary fields.
  4. Click Record transaction.

 

Transfer funds

If you store trust funds at the client level, the funds can be applied as payment on bills for any of the client’s matters. When these funds are recorded, a transaction is added to the client’s ledger, which can be found in the Transactions subtab of the contact card.

If you store trust funds at the matter level, the funds can ONLY be applied as payment on bills to that specific matter. When these funds are recorded, a transaction is added to both the client and matter ledgers, which can be found in the Transactions subtab of the contact card or matter screen.

You can also transfer funds from the client level to the matter level. Follow these steps to transfer funds:

  1. Go to the contact’s Transactions subtab.
  2. Click Transfer funds.
  3. Select Between matters. Select Client Balance as the Source and the relevant matter for the Destination.
  4. Complete the remaining fund transfer details.
  5. Click Record transfer.

 

Refund trust funds

If you are an administrator or your account's primary subscriber, or if you have both accounts and billing permissions, and you need to return any remaining trust funds back to your client or adjust mistakenly applied trust funds, you can return these funds directly from Clio Payments back to your client's original payment method. You can refund all trust payments paid by eCheck (US only) within 180 days. There is no limit for trust payments paid by credit card.

When issuing a refund, you cannot refund more than the amount that was initially charged for the trust request for each matter. Once the refund is successfully processed, both you and your client will receive a confirmation email.

Note: If you deleted the matter before returning any remaining trust funds, you will need to recover the matter from the Recovery bin first. Learn more here.

Important: If you are on the monthly fee schedule, you will need to verify your trust accounts with micro-deposits before issuing your first refund. Verification ensures that the account the funds are being transferred from belong to the account holder. Learn more about how to verify your accounts via micro-deposits here. Once you have started the verification process, your first refund transaction will take a minimum of seven days. This includes the time to verify your account's micro-deposits and to process your refund.

Online payments tab Trust request preview window
  1. Go to Online payments.
  2. Click Refund next to the trust payment transaction.
  3. Under Refund amount, enter the amount that you want to return to the client.
    • This modal will show the amount available to refund to the client, the account that the refund is coming out of, and which client the refund is going to. 
    • Simple payments without any linked contact or matter will not show the contact or matter and the refunded transaction will appear only in the Online payments tab.
    • Payments linked to a contact or matters will show the contact or matter, including payments for multi-matter trust requests, and the refunded transaction will appear in the contact and matter's Transactions subtab and the main Online payments tab.
    • For multi-matter trust requests, the refund will be applied from the newest created matter to the oldest created matter. Additionally, the refundable amount available for each matter depends on the original trust request payment amount for that matter.  
  4. Click Refund payment.
    • Once refunded, the transaction will remain in the Paid quick filter in the bills table. You can also view all transactions for the trust account in the contact or matter's Transactions subtab or the trust account in the main Accounts tab.

 

Disburse trust funds

If you are holding settled funds in your client's trust account and need to pay other entities, such as medical providers or insurance companies, you can record a transaction and issue funds out of the trust account using the disburse funds functionality. 

Tip: Clio Payments customers who need to return trust funds back to a client can do so using the refund trust funds feature. Returning funds allows you to refund the trust funds back to your client's credit card (US and Canada) or eCheck account (US only) without having to manually issue a check. Learn more about refunding trust funds here.

  1. Go to the contact or matter, depending on where the trust funds are stored, and select the Transactions subtab.
  2. Under Transactions, click the down arrow and select the client's trust account.
  3. Click Disburse funds
  4. Enter the amount that you are disbursing to the vendor and complete the remaining fields.
  5. Click Record transaction.
    • The contact or matter's trust balance will adjust according to the amount disbursed. 

 

Set up evergreen management

Evergreen management is the process of retaining and replenishing client trust funds to pay for the work done on a client's case and ensuring consistent cash flow for continued work. In Clio Manage, you can send a client a trust request to start their retainer, receive automatic notifications when the retainer reaches a minimum threshold, and then send the client a new trust request to replenish their retainer.

Tip: Learn more about the benefits of evergreen retainers here.

Step 1: Send trust request to start retainer:

See Create a trust request to learn how to send your client a trust request.

 

Step 2: Set up trust balance notification:

The first step to managing an evergreen retainer is setting up a minimum trust fund threshold for the matter and specifying which firm users should receive a notification if the trust funds drop below the minimum threshold. Once this is set up, the minimum threshold, current matter trust funds, and indication of when the matter trust funds drop below the threshold will be visible in the Financial section of the matter's Dashboard.

  1. Go to the matter for which you want to specify a minimum trust fund threshold.
  2. Click Edit matter.
  3. Scroll down to the Billing preference section.
  4. Under Trust balance notification, check the box for Notify firm users when matter trust funds are low.
  5. Under Notify when trust funds are below... enter the minimum trust balance threshold for this matter.
  6. Under Notification recipients, search for and select the firm users who will receive a notification for when the matter's trust balance drops below the minimum threshold.
  7. Click Save matter.

 

Step 3: Generate trust management report:

The trust management report gives firms a view of unbilled activities, trust account balances, and minimum trust thresholds. You can use this report to perform a cashflow analysis regarding your billable work and trust fund holdings. Learn more about generating reports in Clio Manage here.

 

Step 4: Replenish matter trust funds:

When your client's trust balance drops below the minimum threshold that you specified for the matter, you can generate a new trust request to replenish the matter trust funds and continue billing for the matter. 

 

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