MODULE 7

HANDLING FINANCIAL RECORDS IN LAW OFFICE

 A law is like any business enterprise. It operates to make a profit. Therefore it is essential that accurate
financial records be kept so that clients may be periodically and properly billed for the services that they
have received.
 The procedures for billing client records depend largely on the size of the law firm.
o In a small firm, the attorney or his secretary may keep most of these records, and the secretary
under instructions from the attorney may prepare and mail statements of money owed the firm by
clients.
o In medium-sized firm, the partners may coordinate the record keeping, determine fees and then
provide the secretaries with the information necessary to bill the clients. In some medium-sized
offices, there is an accounting clerk who assumes the responsibility for supervising, record keeping,
and billing.
o In large firms, they have accounting departments. If you work in a large office, you will have to
learn your role in record keeping and the channels through which you will have to route records that
involve charges to be made clients accounts.
 It is important that you understand the basic principles involved in keeping clients records, including
disbursements made on the clients behalf and transferring this information to statements of payments to be
made by the clients.

YOUR RESPONSIBILITIES IN HANDLING FINANCIAL RECORDS

If you will work in a law office, you will be directly involved in the following processes of handling financial
matters:

1. Billing the client

2. Preparing docket sheets for each client
3. Updating the disbursement record
4. Handing pretty cash fund
5. Preparing check disbursement
6. Preparing account sheets
7. Sending of statement of Account to clients

BILLING THE CLIENT

 Clients are usually billed monthly. The amount of the bill is base on the time the attorney has spent on a
particular matter and all disbursements made by the fir on behalf of the client.
 Therefore, all client financial records must include notation of time spent by the lawyer and all expenses
incurred by the firms connection with a legal proceeding.

FEES AND RETAINERS PAID TO LAWYER

 LEGAL FEES are the amount of money paid by clients for the services rendered by the lawyer represents
the income of the firm.
o Lawyers charge their clients fees, which are reimbursement for then time the lawyer devoted to a
legal matter.
o As a legal secretary, you should never discuss fees with a client, but refer all questions to the
lawyer, who determines the fee by discussing it with the client.
o Most people use the services of the lawyer only occasionally. They are billed when the service has
been concluded. If the legal proceeding continues over an extended period of time, as in a lawsuit,
the client may be billed monthly as the case continues.
 RETAINERS FEES are paid to lawyers when clients require the services of the lawyer regularly
throughout the year.
o They then agree to pay a set monthly retainer so that they may call upon the attorney or the firm whenever
they need legal advice or assistance.
 Like all clients, they are billed not only for the regular retainer but also for all the disbursements made on
their behalf during the month.
 In addition, if an lawyer renders unusual services during any given month, he may be bill the client for
these extra services above the normal amount of the retainer. For example, Atty. Fernandez and Associates
is on retainer for P15,000 a month from Basaya Corporation. For this amount, Atty. Fernandez must
provide services related to regular corporate matters - that is, those day-to-day matters that have to do with
the organization and operation of the corporation.
  If ¡Basaya Corporation requests legal assistance on special matters, such as merger with another company,
it is billed additionally for those special services.
PREPARING DOCKET SHEETS
 When an attorney agrees to represents a new client or an old client on a new matter, a control sheet must
be prepared on which either the lawyer or his secretary will record all actions taken in the matter and all
moneys paid out in connection with it.
 These records are known as client records, client dockets, case dockets, or, simply, dockets.
 A wide variety of forms may be used for this purpose.
 The office may purchase printed forms from its stationery, own forms. have forms specially
designed and printed, or duplicate its own forms.
 The docket sheets used by Pimentel Corporation for the merger of De Vera Corporation should contain the
number of hours put in by the attorney for this client is noted on the docket.
 The docket is a very simple form that is duplicated in the office, but it works well and is typical of the
forms used by many legal firms.
 The number of hours devoted to the proceeding by the lawyer and the expenses incurred are entered on the
DOCKET SHEET. You cannot enter the rate until the lawyer tells you what it is.
 If this matter had required court action, both the name of the court and the file number assigned to the case
would be entered on the docket sheet.
INFORMATION NEEDED IN THE DOCKET SHEET
Although docket sheets may vary in the type of information they contain, the following information are
essential:
1. Client's name
2. Names of other parties to the action, if any.
3. Type of action
4. Each activity performed by the attorney and the time he devoted to each.
5. All disbursements made by the form in connection with the proceeding.
POSTING INFORMATION TO THE DOCKET SHEET
 All information pertinent to legal action for a client should be regularly posted to the client's docket sheet.
 The manner in which the client docket sheets are handled depends on the size of the law firm. o In a large
firm, the information concering a client's docket would be dictated by the lawyer to his legal assistant or
legal secretary.
o The law office assistant will then type or computerize all the information and forward it to the Accounting
Department. The actual computation of the time charges might be handled by automation through a
computerized system or by someone on Accounting. Periodically, the head of the accounting department
reviews the records to make certain that the rates charged are both appropriate and accurate.
o In a medium-sized firm, the information would also be dictated by the lawyer to his secretary. Or the
lawyer might write the information on the form. One of the partners would probably hold the records in his
office, and each week the associates would send their docket s to lawyer in-charge. Rather than having the
partner's secretary handle all this, the information might be forwarded to an accounting clerk.
o Small firms operate in a manner similar to that of medium-sized firms. The lawyer might dictate the
information to the legal secretary, or the lawyer might fill the dockets herself or himself, or she or he might
give his or her legal secretary his notes and have her until it is time for them to be filled in.

 In all cases, after the client has been billed or after an action has been completed, the dockets are filled in
the client file.
CAREER PREPARATION PROJECT 7.1: PREPARE CLIENT DOCKETS
 Visit a legal office in your area. Try to get sample copy of DOCKET SHEETS.
 Your may request for sample form of blank DOCKET SHEET being used in law offices.
 The docket sheets should always be the top item in the folder.
 Duplicate this DOCKET SHEET form • Make about 10 copies and retain the original copy. Prepare a
docket for Parson General Motors as one of your clients.
THINGS TO DO:
 Use one blanK DOCKET SHEET form.
 Your lawyer-boss asks you to add the following activities to the Parson General Corporate Account docket:
2/1 Worked on arrangements for annual stockholders meeting, 2 hours.
2/6 PT & T (telephone calls to and from) Anton Reyes Re: Agenda, 1 ½ hour.
2/6 Prepared report for SEC re-acquisition, 1 hour.
2/8 Prepared ballot, oath of inspection, affidavit of mailing by secretary, draft of agenda, 3 hours.
2/11 Worked on general preparation for annual meeting, 1 hour.
2/13 Prepared final agenda, 112 hour. Attended annual meeting and organization meeting of new board, 6
hours
2/14 Annual meeting disbursements: travel to Manila offices, P250 taxi fares and meals P2,500
2/15 Dictated minutes of annual meeting and board meeting, 1 1/2 hours.
2/26 Met with General Manager Re: general matters, 2 hours.
 2/28 Other February disbursements: telephone bills-P3,500; messenger service-P750; photocopies-P350;
postage-895; miscellaneous- P285. 3/4 New minutes notebook, P50. 3/4 Messenger services, P500 3/5
Telephone bills, P3,800. 3/6 Photocopies of legal documents, P950.
DISBURSEMENT RECORDS
 The docket sheet and other client records must include information on all disbursements or
expenses made on behalf of the client. For example, if the action involves the courts, the fees
charged by the courts for filing documents must be included. Fees are paid for many other purposes
also - for license, filing with government agencies, and the like. All these must be noted on the
docket sheets and other records.
 The manner in which records of disbursements are maintained varies according to the size of the
office:
 In a large law firm, disbursements may be controlled by the accounting department, and alf
data may even be computerized.
 In a medium-sized firm, they may be kept in the office of the senior partner or possibly by
his or her legal office assistant
 In a small office, the lawyer's secretary will collect their records. Disbursements are made
by check in most instances. However, if the amount is small, they may be made in cash
using money from the petty cash fund.
HOW TO HANDLE THE PETTY CASH FUND
 Every office must keep a certain amount of cash on hand to pay for incidental expenses and the immediate
cash requirements of the lawyers. This is called the PETTY CASH FUND.
 These expenses might include anything from lunch with a client to buying office supplies.
 It is customary to write a check for cash at a specified amount to establish the petty cash fund.
 In a large office, this fund is maintained and strictly controlled by the Accounting Department.
 In a medium-sized office, the fund is maintained by an accounting clerk. Most firms have a policy
that any amount over the predetermined limit cannot be disbursed from the petty cash fund without
the special approval of one of the partners.
 In a small office, the legal office assistant keeps the petty cash box and kept in a safe location and
records all withdrawals. She will replenish it when the amount gets low by writing and requesting a
check for replenishment for the purpose of maintaining the amount in the petty cash fund.
THE PETTY CASH VOUCHER
Wherever the fund is maintained, each time money is taken from it, a slip - usually a printed petty cash voucher.
 It is filled out and signed indicating the date, the purpose for which the money was taken, and who took it.
 Periodically, these vouchers are posted to the appropriate client records
CAREER PREPARATION PROJECT 7.2: PREPARE A PETTY CASH VOUCHER Go and
visit a bookstore. Buy the forms for PETTY CASH FUND. If the