The first design decision: will you hold client money?
By-Law 9 does not attach to your practice areas; it attaches to money. The moment a client pays for work you have not yet done, a block fee on a careless-driving charge, a retainer on a Landlord and Tenant Board file, funds for a filing fee you have not yet paid, that money belongs in a mixed trust account until you deliver a bill. A paralegal who only ever invoices after the work is finished, and is paid into the general account, may never need a trust account at all.
So we start there, before any software is chosen. A defence practice that collects block fees up front cannot avoid trust; a Small Claims practice that bills on completion often can. Either model works. Drifting between them does not, because your deposits, not your intentions, decide which set of record-keeping rules the Law Society of Ontario will hold you to.
If you do run trust, the rules arrive at full strength
There is no junior edition of By-Law 9 for paralegals. The same obligations that bind a fifty-lawyer firm bind a licensee working from a spare bedroom: client-by-client trust ledgers that never go negative, a monthly trust comparison finished within 25 days of month-end, interest on the mixed account passing to the Law Foundation of Ontario, and a Paralegal Annual Report due March 31 that asks pointed questions about all of it.
The solo structure is the real risk. A law firm has a clerk who keeps the trust records; a paralegal usually keeps them personally, at night, after a day of hearings. Falling behind is not a bookkeeping lapse but a licensing exposure, because trust records are the first thing an LSO spot audit opens, and a licensee cannot delegate the responsibility even when we do the work. Our job is to make those records the by-product of a short weekly routine rather than a quarterly reconstruction.
| Money that arrives | Where it belongs |
|---|---|
| Block fee paid before the matter starts | Trust, until the bill for that work is delivered |
| Payment of a bill already delivered | General account, recorded as fees plus 13% HST |
| Funds for a filing fee not yet paid | Trust, released when the disbursement is actually made |
| Settlement money owed onward to your client | Trust only, and out again promptly, never the general account |
Fees move only when the bill exists
The transfer from trust to general is the moment the Law Society scrutinizes most, so we treat it as a controlled event: work finished, invoice delivered, then the exact invoice amount moved and referenced to it. Nothing moves on account of fees you merely expect to earn. The quieter problem is what stays behind, the $40 left over when a filing fee came in higher than the fee actually paid, the retainer remnant on a matter that settled early. Small balances linger for years if nobody looks, so our month-end includes a stale-balance list with a decision attached to every line: refund it, bill it, or document why it waits.
Forty small files generate more entries than four big ones
A Small Claims and tribunal practice runs on volume: fixed fees from a few hundred dollars up, dozens of open matters, e-transfers landing with no file number attached. Bookkeeping effort scales with transaction count, not dollar size, which is why a busy paralegal's books can take more care per revenue dollar than a law firm's. The fix is habit, not heroics: every deposit matched to a matter the day it lands, receipts captured weekly through Dext, and practice-management software, uLaw and Clio both handle Ontario trust records well, feeding QuickBooks Online so trust activity can never leak into an income account.
Under End-to-End Accounting, the bookkeeping, the HST returns, payroll if you employ an assistant, and the year-end filings run as one engagement, built from the same reconciled numbers the trust comparison uses.
Month-end that actually ends on the 25th
The deliverable stays deliberately small: trust comparison completed inside its window, general account reconciled, and a one-page view of fees billed, cash collected and HST set aside. When the Annual Report opens, the answers are exports, not archaeology, and year-end flows straight into the corporate or personal tax filing without rework. For a solo licensee who mostly wants a CPA one message away between closes, CPA Quick Support at $99 a month covers unlimited questions and CRA letter review without an hourly meter. We keep books for paralegals across Mississauga and the GTA, and the discovery call that starts it costs fifteen minutes.
Source: Ontario — Law Society Act.
