Accountancy

Accountancy refers to an act of recording, classifying and summarizing the business transactions,
balancing of accounts, drawing conclusions and integrating the results thereof.

Bar council Rules relating to accounting towards client-

Under Chapter II Standards of Professional Conduct and Etiquette of Part VI Rules Governing
Advocates of Bar Council of India Rules, 1975 provides for the maintenance of the accounts of
the clients by the Advocate. The said Rules run as follows
Rule 25: An advocate should keep the accounts of the client’s money entrusted to him. The
accounts should show the amounts received from the client, the expenses incurred for him and
the debits made on the account of Advocate fees with the respective dates and all other necessary
particulars.
Rule 26 : Where moneys are received from the client, it should be entered whether the amount
have been received for the advocates fees or expenses. Amount received for the expenses shall
not be diverted towards Advocates fees without the consent of the client in writing.
Rule 27: Where any amount is received on behalf of his client the fact of such receipt must be
intimated to the client as early as possible.
Rule 29: Where the fee has been left unsettled, the advocate shall take the fees which he is
legally entitled from the moneys of the client remaining in his hands, after the completion of the
proceeding. The balance shall be returned to the client.
Rule 30: A copy of the client account shall be furnished to him after getting the necessary
copying charges from him.
Rule 31: An advocate shall not make any agreements whereby client’s funds in his hands are
converted into loans to the advocate.
Rule 32: An Advocate shall not lend money to his client for the purpose of conducting the case.

For all reasonable reasons, an advocate must maintain accounts to keep a track of the incomes
earned and expenses incurred towards earning the income.  Applying this concept to the legal
profession, an advocate needs to necessarily account for fees due and receivable against every
client and also to record expenditure incurred purely towards his efforts on individual
matters. Proper auditing by Chartered Accountants may also be fruitful in case of large legal
concerns.