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If licensees were not instructed to follow these systematic procedures, a growing firm could not keep track of how much money is owed to them for a specific matter versus how much has previously been collected or what has already been disbursed. This is particularly relevant when handling numerous real estate transactions.
These mandates help firms circumvent an otherwise inevitable disaster. The paper trail of an e-transfer is insufficient to deduce pertinent information such as which matter the transfer relates to or the specific reason for the dollar amount being transferred.
As a result, an Electronic Trust Transfer Requisition — called a Form 9A, is required to be completed when trust monies have been electronically debited from its account and credited to another. This requisition form makes it necessary to record when and where the money was transmitted, by whom, and for what reason. If this documentation was not a requisite, having to source this information retroactively could prove to be time consuming and costly, especially if being audited.
By observing this rule the firm effectively obtains an annual snapshot of the company allowing for assessment of position-to-date at least once a year. Additionally, if compliance requirements are not met or if they are completed inappropriately, there may be adverse tax consequences.
By ensuring compliance and fulfilling the checks and balances established by the LSUC, the result is a set of organized comprehensive books kept in a timely fashion — this minimizes the chance of incompliance issues.
Moreover, good recordkeeping is equally important for maintaining profit and for maximizing billable hours. A clean set of books makes the docketing and collecting process operate at its crest. Ultimately, demands and reprimands imposed by a governing body are typically perceived as more of a nuisance than value by those who are subject to them; even in the case of the most just governances.
However, when observed properly these same regulations and penalties can serve to benefit those who abide by them more than the body by which they are enforced. As it relates to the Law Society of Upper Canada bookkeeping By-Laws, a significant value exists with its licensees in particular and throughout the legal community in general.
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At Convocation on May 27, critics turned what should have been a routine debate on new bylaws into a protracted affair. Several benchers highlighted what they see as loopholes and deficiencies in the provisions for grandfathered life benchers. Thomas Heintzman, chairman of the governance task force, came under criticism for rushing the changes through. Heintzman admitted many of the concerns raised warranted a closer look but insisted his proposed changes should go ahead regardless because they reflect the policies passed by Convocation in December. Term limits will take effect in stages, with current benchers who have served fewer than 16 years entitled to stand again at the next election in
LSUC passes ‘defective’ bylaw