iolta trust reconciliation

The problem

Trust accounting errors leading to bar discipline often stem from recordkeeping failures rather than missing funds. Lawyers risk suspension or disbarment when their client ledgers, journals, and bank statements fail to reconcile to the penny every month.

What it does

• Performs three-way reconciliations by tying adjusted bank balances to book journals and individual client ledgers.
• Identifies critical compliance defects like negative client ledgers, commingled funds, and unearned fees left in trust.
• Detects "technical misappropriation" where one client's funds are inadvertently used to cover another's costs.
• Generates audit-ready findings reports ordered by regulatory severity for attorney review.
• Provides lawful correction workflows for variances using firm funds instead of improper "plug" entries.

Why this beats prompting it yourself

General LLMs often hallucinate uniform "Rule 1.15" requirements or suggest fraudulent "balancing entries" to fix variances. This skill enforces state-specific rule verification and prohibits netting totals across clients, preventing the specific recordkeeping traps that trigger bar audits.

Use cases

• Conducting monthly IOLTA or client trust account reconciliations.
• Preparing for an imminent state bar audit or responding to a trust overdraft notice.
• Onboarding a law firm's books to verify historical trust accounting integrity.
• Determining if specific funds can be lawfully moved from trust to operating accounts.

Known limitations

Does not provide legal ethics opinions or substitute for a qualified trust-accounting professional. Requires per-client ledgers to perform a true three-way reconciliation.