Trust Account Management

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.

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. Go 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.

Protect client trust funds

Managing trust funds comes with numerous industry rules. Your firm may need to have strict control over trust funds for various reasons, such as covering counsel fees, undertakings, expenses, or future invoices. In Clio Manage, you can protect specific client fund amounts for future use. Protected funds will be reduced from the overall matter funds balance and only available for future fees and expenses.

Step 1: Enable the protected funds setting

Before getting started with protected trust funds, an administrator on the firm account needs to enable the setting. 

1. Go to Settings > Billing.
2. Select Protected funds.
3. In the Protected matter funds section, turn the toggle to the on position.

Step 2: Add and manage protected funds

• If you have Accounts permissions, you can add, edit, or delete protected funds, or apply protected funds to invoices.
• If you do not have Accounts permissions, you can view protected funds, increase the amount of existing protected funds, and send a request to a user with Accounts permissions to release protected funds back to the client or to pay an invoice.

Users with Accounts permissions

If you have Accounts permissions, you can add, edit, or delete protected funds from a matter's Dashboard.Once added, you can apply protected funds to an invoice from the main Billing tab or the Bills subtab in a contact or matter. Any changes made to protected funds will be recorded in the matter's Timeline. The record will show which user made the change with a date and time stamp.

Note: You can only protect funds if your client has available trust funds to protect. You can add trust funds by creating a trust request and recording a payment. 

Add protected funds to a matter

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section and go to the Matter trust funds box.
3. If this is the first time you are protecting funds for this matter, click Add next to Protected funds. If you already added protected funds to this matter, click the protected funds total and then click Add funds.
4. Enter the amount that you want to protect and the reason for protecting the funds. If the client has multiple trust accounts, select the relevant account.
5. Click Add.
   • The amount of the trust funds that you protected will be subtracted from the total amount of available trust funds on the matter. You can view the protected funds by clicking the amount of the protected funds in the Matter trust funds box.

Edit protected funds

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click the pencil icon representing Edit to edit a protected fund.
5. Make any changes to the amount or reason and then click Save changes.

Delete protected funds

Important: Deleting protected funds will not delete them from the matter. Deleting removes the protected fund from the list of protected funds. The amount that was deleted or unprotected will then return back to the available matter trust balance.

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click the trash can icon representing Delete to unprotect a fund.
5. Click Delete to confirm.

Apply protected funds to invoices

1. Go to the main Billing tab or the Bills subtab in a contact or matter.
2. Find the invoice that you want to apply the protected funds to. You can use the quick filters to find invoices that have not been paid yet or the keyword search box.
3. Click the down arrow next to Send and then select Apply protected funds.
4. Select the account that the protect funds will go into and the protected fund that you want to use to pay the invoice.
   • If the client only has one protected fund, the selection will be locked in and cannot be changed since there are no other protected funds.
5. Click Apply funds.

Users without Accounts permissions

If you do not have Accounts permissions, you cannot add protected funds, but you can view all protected funds for a matter, and you can edit the reason for currently protected funds and increase the amount of the protected fund. Any changes made to protected funds will be recorded in the matter's Timeline. The record will show which user made the change with a date and time stamp.

You can also send a request to users who do have Accounts permissions to release protected funds back to the client or request that protected funds be used to pay an invoice. Once you send the request, all users with Accounts permissions will receive an email of your request.

View protected funds

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds to view all protected funds for the matter.

Edit protected funds amount and reason

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click the pencil icon representing Edit to edit a protected fund.
5. Increase the amount or change the reason and then click Save changes.

Send request to release protected funds

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click Request fund release.
5. Select the protected fund and the reason for requesting the release. 
   • For the reason, you can choose either Release back to the client or Pay an invoice. If you selected Pay an invoice, you will also need to select the invoice that should be paid.
6. Optional: Enter a memo to add more details about the release request.
7. Click Request fund release.

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.

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.

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.

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.

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.

Record trust account interest earned or bank charge

In Clio Manage, follow these steps to record interest earned on funds held in trust or bank charges for a trust account.

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.

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. 

1. Go to the contact or matter, depending on where the trust funds are stored, and select the Transactions subtab.
2. In the Transactions table window, use the down arrow to 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.
   • Destination: Use this field to enter non-person information about the transaction (e.g. information about a bank account).
   • Payee: Use this field to specify who is receiving the funds.
   • Payment method: Use this field to enter information about how the transaction is completed (e.g. cash payment or bank transfer).
5. Click Record transaction.
   • The contact or matter's trust balance will adjust according to the amount disbursed.