Regardless of your law firm’s size, proper trust accounting is a critical responsibility. In Hawaii, lawyers have an ethical obligation to safeguard client funds held in trust and adhere to strict rules governing trust accounts. In fact, trust account problems remain one of the top reasons attorneys are disciplined in the United States. This guide breaks down Hawaii’s specific trust accounting and IOLTA (Interest on Lawyers’ Trust Accounts) requirements, highlights common pitfalls to avoid, and outlines best practices to help your firm stay compliant.
Key Takeaways
- Hawaii’s strict trust accounting rules require law firms to keep client funds separate in a properly designated “Client Trust Account,” with no commingling of client money and firm money. All client funds must be deposited in trust and only withdrawn when earned or for authorized disbursements.
- Rigorous recordkeeping and reconciliation are mandatory. Hawaii attorneys must maintain detailed trust account records (ledgers, journals, bank statements, etc.) for at least six years, reconcile trust accounts monthly, and review client ledger balances quarterly to ensure the total matches the bank balance.
- Best practices and tools can prevent costly mistakes. Avoid common pitfalls like commingling or sloppy bookkeeping by instituting proper procedures and leveraging technology. Modern law firm accounting software (e.g. LeanLaw) can automate trust accounting tasks, helping Hawaii firms stay compliant with state bar rules.
Understanding IOLTA and Trust Accounts in Hawaii
In Hawaii, as in most states, client funds that a lawyer holds must be kept in a special bank account separate from the law firm’s own funds. This is often an IOLTA account – short for “Interest on Lawyers’ Trust Accounts.” IOLTA is essentially a pooled client trust account for holding short-term or nominal client funds. According to the Hawaii Justice Foundation, your IOLTA account is commonly just your “trust account,” where client money remains until fees or costs are earned and billed, at which point those amounts can be transferred to your firm’s business account.
Hawaii’s Supreme Court Rules make the IOLTA program mandatory for lawyers who handle client money. All client funds must be deposited in either an IOLTA trust account or a separate interest-bearing client trust account (if the amount or duration is substantial enough to warrant interest for that individual client). For most routine retainers and small sums, an IOLTA account is used. The interest from IOLTA accounts does not go to the law firm or client; instead, banks send the interest to the Hawaiʻi Justice Foundation to fund legal aid programs statewide. (Each month, participating banks remit the net interest from all IOLTA accounts to HJF for grants supporting civil legal services.) There are a limited number of banks approved for IOLTA in Hawaii (currently nine participating banks), and attorneys are free to choose from these institutions when opening a trust account. The Hawaii State Bar Association (HSBA) provides guidance on how to set up an IOLTA account and even requires lawyers to submit a form (Notice to Financial Institution) to the bank when establishing a new trust account.
Importantly, Hawaii lawyers must certify their IOLTA and trust account compliance every year. Each year during the annual HSBA registration renewal, attorneys have to file a certificate affirming they are complying with trust accounting rules (or that they do not hold client funds). This annual certification process underscores that trust accounting is not optional – it’s a professional obligation that the Bar and the Office of Disciplinary Counsel (ODC) actively monitor.
Hawaii’s Trust Accounting Rules and Requirements
Hawaii has very explicit rules detailing how client trust funds must be handled. These are found in the Hawaiʻi Rules of Professional Conduct (HRPC) Rule 1.15 and the Rules Governing Trust Accounting (promulgated by the Hawaii Supreme Court). Here are some of the key requirements:
- Separate “Client Trust Account”: Client funds can never be commingled with the law firm’s own funds. This means any money received on behalf of a client (e.g. retainers, settlement proceeds, advance fee deposits) must be deposited intact into a designated trust account, not your operating account. The trust account should be clearly labeled as such – Hawaii rules actually specify the account title should be “Client Trust Account” (not “Clients’ Trust Account” or other variation). It’s good practice to ensure checks and deposit slips bear this legend as well, so it’s obvious the funds are trust funds.
- No Personal Use or Commingling: Lawyers cannot deposit or keep their own money in the client trust account, except for two narrow exceptions: (1) a small amount of firm funds needed to cover bank service charges, and (2) funds that are partly owned by the client and partly due to the lawyer (such as a settlement where a contingent fee will be taken) – but even in the latter case, the lawyer’s portion must be withdrawn promptly once it’s earned or due. All fees paid in advance by clients are considered client property until you earn them by doing the work, so they stay in trust and are “refundable until earned”. Once you do earn fees, you must promptly remove them from the trust account and transfer them to your business account to avoid commingling. Failing to withdraw earned fees (leaving them mixed with client money) is actually a form of commingling – a common mistake attorneys make inadvertently.
- Authorized Signatories and Withdrawals: Only a licensed Hawaii attorney is allowed to be a signatory on a client trust account. You cannot authorize a paralegal, office manager, or other non-lawyer to sign trust account checks or initiate disbursements – this is explicitly prohibited by HRPC 1.15. All withdrawals from a trust account should be made by check or electronic transfer payable to a specific payee (never to cash). Additionally, you must never pay personal or firm expenses directly out of the trust account – it’s not a petty cash box for bills. For instance, you can’t pay your office rent or buy office supplies from client trust money, even if you intend to “replace” it later. The trust account is only for client-related transactions.
- Detailed Recordkeeping: Hawaii requires meticulous recordkeeping for all trust accounts. The rules list out the minimum records you must maintain, including:
- A receipt and disbursement journal for the trust account, recording every deposit and withdrawal with dates, amounts, source/descriptions, and purpose of each transaction.
- A separate ledger for each client or matter, showing all funds held for that client and all transactions (so you know each client’s exact balance at any given time).
- Copies of retainer agreements or engagement letters for clients whose funds you hold in trust.
- Copies of accountings to clients or third parties showing any disbursement of trust funds to them or on their behalf (for example, settlement statements).
- Copies of bills to clients for legal fees and expenses, if those fees/expenses were paid from the trust account.
- Copies of records of disbursements on each client’s behalf (e.g. copies of issued trust checks or wire transfer confirmations).
- The physical or electronic check registers, bank statements, canceled checks (or digital images provided by the bank), and deposit slips for the trust account – all of which should clearly indicate they are for a “client trust account”.
- Monthly reconciliation reports and at least quarterly listings of all clients’ trust balances, as described below.
- Records of electronic funds transfers from the trust account (including the authorizer, date, amount, recipient, and the trust account involved).
- Any other records necessary to understand the trust transactions (e.g. portions of client files related to trust fund transactions).
- A receipt and disbursement journal for the trust account, recording every deposit and withdrawal with dates, amounts, source/descriptions, and purpose of each transaction.
- These records can be maintained electronically or in paper form, but they must otherwise comply with the rules (contain all required details) and be readily printable or accessible. If kept digitally, they should be backed up regularly. Every law firm must retain all these trust account records for at least 6 years after completion of the representation or the last transaction in the account, whichever is later. The records must be maintained in Hawaii (either at a principal office or in a readily accessible location, or available online in the state) and be available for inspection by a representative of the ODC if ever required. In short, you need to create and keep a paper trail of every client penny in and out of the trust account.
- Regular Reconciliation: Hawaii law firms must reconcile their trust accounts regularly. The rules mandate doing a monthly reconciliation of the trust account – typically this means comparing the bank statement balance to your own records (your trust checkbook register and client ledgers) each month to ensure they agree. Additionally, at least quarterly, you must prepare a listing of each client’s trust balance and verify that the total of all client sub-account balances equals the overall trust account balance on the bank statement. In practice, many firms do this “three-way reconciliation” monthly: checking that (1) the bank statement balance, (2) your running trust ledger balance, and (3) the sum of all individual client ledger balances all match. If there’s any discrepancy, you are expected to investigate and resolve it immediately. Failing to reconcile is a recipe for trust accounting trouble – issues like bank errors or accidental overpayments can go unnoticed and snowball if you’re not reconciling on a routine basis.
- Overdraft Alerts: It’s worth noting that Hawaii’s program has an overdraft notification rule. Every financial institution that holds a Hawaii trust account or IOLTA must agree to notify the ODC if a trust check is declined for insufficient funds or if the account is overdrawn. This means if you inadvertently overspend the trust account (even by a few dollars) or if a client’s deposit check bounces and creates a shortfall, ODC will hear about it automatically. The ensuing inquiry could range from a letter requesting an explanation to a full audit of your trust records. As a best practice, always keep a close eye on trust balances and never disburse funds unless you’re certain the deposit has cleared. If a deposit hasn’t cleared yet (e.g., a client’s check is still pending), disbursing funds against it could lead to a deficit and trigger an overdraft report. In a zero-tolerance jurisdiction, even an unintentional trust overdraft can lead to disciplinary action.
By following these rules, Hawaii attorneys ensure that client funds are safeguarded and handled with fidelity. The HSBA and ODC have made it clear that trust compliance is taken very seriously. In fact, the ODC (through the Disciplinary Board) offers a Client Trust Account School, a four-hour training program to educate lawyers on proper trust accounting methods. Taking advantage of such training or reviewing the Bar’s published guidelines can be extremely helpful – especially for small firm attorneys or solos who manage trust accounts without an in-house accounting team.
Common Trust Accounting Pitfalls (and How to Avoid Them)
Even with clear rules, mistakes in trust accounting happen far too often. Here are some common pitfalls that Hawaii small and mid-sized firms should be vigilant to avoid, and tips on how to avoid them:
- Commingling Funds: This is the cardinal sin of trust accounting – mixing client money with the firm’s money. Commingling can be as blatant as using client trust funds to pay firm bills, or as subtle as leaving earned fees in the trust account for too long. Avoidance Tip: Always deposit client payments (retainers, settlements, etc.) into the trust account, never your operating account. Conversely, don’t pay any personal or business expense from the trust account. As soon as fees are earned and invoiced to the client, promptly transfer that amount out of trust to your firm account. If you need to cover bank fees, deposit a small amount of firm funds (permitted by the rules) just enough to cover those charges – typically no more than a few hundred dollars. Monitor that any such firm funds in trust are used only for bank fees. By strictly separating funds and swiftly removing earned fees, you’ll steer clear of commingling.
- Poor Recordkeeping or Accounting Errors: Another common pitfall is failing to keep the detailed records the rules require. Small firms might be tempted to rely on a simple checkbook balance or memory, but that’s a mistake. Without individual client ledgers and proper journals, you might not realize when one client’s funds were accidentally used for another’s disbursement. Sloppy bookkeeping (like not recording transactions promptly, or losing track of whose funds are whose) can lead to serious problems – including client complaints, audits, and even disciplinary action. Avoidance Tip: Maintain a ledger for each client matter that has trust money, and update it every time money goes in or out for that client. Keep all supporting documents (receipts, copies of checks, deposit slips) organized and readily accessible. Reconcile the account every month against the bank statement. If numbers don’t tie out, investigate immediately rather than carrying an unexplained discrepancy. Diligent recordkeeping isn’t just bureaucratic – it’s essential to prove you haven’t misused any client funds. Remember that in a disciplinary investigation, lack of intent or ignorance is not a defense – not having proper records or controls is itself a violation. Don’t let basic accounting errors put your license at risk.
- Not Reconciling Monthly: Failing to perform timely reconciliations is a recipe for disaster. If you’re not reconciling the trust account each month, small errors can compound into big problems. For example, you might mistakenly withdraw trust funds for Client A’s invoice but actually dip into Client B’s funds because Client A’s check hadn’t cleared – leaving Client B’s balance in the red without you realizing it. Regular reconciliations (and the quarterly client balance comparisons required in Hawaii) catch such issues early. Avoidance Tip: Set a strict schedule to reconcile every month as soon as the bank statement is available (many firms do it within a week of month-end). Perform a three-way reconciliation: compare the bank statement balance, your trust check register balance, and the total of all client ledger balances. They should all match. If not, find out why (common causes are math errors, timing differences, or recording mistakes) and correct it immediately. Document each reconciliation and consider having a second person review it if possible. By reconciling diligently, you’ll meet Hawaii’s requirements and greatly reduce the chance of a catastrophic oversight.
- Disbursing Funds at the Wrong Time: Timing is critical in trust accounting. One common mistake is disbursing funds too early – for instance, writing a trust check on the same day you deposit a client’s payment, assuming the deposit is as good as cash. If that deposit turns out to be a bad check or is delayed, your disbursement will come out of other clients’ money, causing a deficit. Another timing pitfall is the opposite: not disbursing when you should – such as holding onto a client’s settlement money longer than necessary, or not promptly refunding unused trust funds at the conclusion of a case. Avoidance Tip: Always wait until deposits fully clear the bank before drawing against them. Remember, “available” funds are not the same as “cleared” funds – a check can take several days (or more if out-of-state) to truly clear. If you disburse on uncleared funds and the check bounces, you’ve effectively paid one client with another’s money, which is misappropriation. On the flip side, when a matter is over or fees have been earned, don’t delay transferring the earned amount to your operating account or returning any remaining balance to the client. Prolonged delays can be seen as improper or could inadvertently commingle funds. Make it a practice to review each client’s trust balance regularly and tidy up any funds that should be disbursed.
- Lack of Oversight / Unauthorized Access: In some firms, especially as they grow, attorneys might delegate trust accounting tasks entirely to a bookkeeper or staff member without proper oversight. This is dangerous – not only because only lawyers can sign on the account (by rule), but also because it increases the risk of internal errors or even fraud going undetected. Small firms are not immune from embezzlement or simple mistakes if one person controls the trust checkbook without supervision. Avoidance Tip: Segregate duties if possible – e.g., one person prepares deposits and another (the attorney) verifies and signs checks. Even if you have staff assisting, the responsible attorney should review trust activity regularly. Consider requiring two signatures for large trust disbursements as an extra safeguard. And never let a non-lawyer have signing authority; if you authorize online banking, ensure that only attorneys have the ability to execute transfers. Ultimately, the lawyer is the fiduciary for the client funds and will be held accountable for any mismanagement, so you cannot completely hand off this duty. Maintain oversight and control at all times.
By being aware of these common pitfalls, your firm can take proactive steps to prevent them. Many trust account violations stem not from malicious intent, but from oversight, sloppy habits, or lack of knowledge. As the ODC frequently reminds lawyers, good faith alone is not a defense – you must have proper procedures in place and actually follow them.
Best Practices for Trust Account Management in Hawaii
To stay on the right side of Hawaii’s trust accounting rules, implement these best practices in your daily operations:
- Know the Rules and Train Your Team: Ensure that all attorneys and staff who handle client funds are familiar with Hawaii’s trust accounting rules (HRPC 1.15 and the Hawaiʻi Rules Governing Trust Accounting). The HSBA and ODC publish guidance – take advantage of resources like HSBA’s IOLTA information page and the ODC’s Client Trust Account School. Regularly review these rules as a firm, especially when onboarding new lawyers or bookkeepers. Everyone should understand that mismanaging trust funds can lead to serious consequences, including suspension or disbarment. Investing time in education up front can save you from problems later.
- Use a Dedicated Trust Accounting System: Maintain a separate accounting system or software for the trust account that tracks every transaction by client matter. A comprehensive legal trust accounting software (such as LeanLaw’s trust accounting solution) can automate much of this process, like generating client ledgers, performing three-way reconciliations, and flagging errors. Technology can significantly reduce human error. For example, LeanLaw’s software automatically syncs with QuickBooks Online and keeps trust balances in continuous alignment with your general ledger, helping you meet Hawaii’s recordkeeping and reconciliation standards with less hassle. While software doesn’t replace vigilance, it provides a safety net and helpful reminders (e.g., prompting you to reconcile or preventing you from overdrawing a client’s balance). In short, the right software tools can make trust compliance much easier and more foolproof for a small firm.
- Establish Clear Procedures for Handling Funds: Develop a written workflow for how your firm handles client funds from start to finish. For example:
- When you receive a check for a retainer or settlement, immediately endorse it “For Deposit Only” into the trust account and log it in your receipts journal and the client’s ledger that same day.
- Require that every trust disbursement (check or electronic transfer) have proper backup documentation: an invoice, settlement statement, or written client authorization that justifies the payment. Keep these documents on file and cross-reference them with the disbursement records.
- Never “borrow” from one client’s funds to pay another client’s obligation. If one client’s trust balance is insufficient to cover a disbursement, do not pay it until that client replenishes their funds. It is far better to delay a payment than to risk a violation by robbing Peter to pay Paul (even temporarily).
- Reconcile and review balances on a set schedule. For instance, have a policy that within 1-2 days of receiving the monthly bank statement, a reconciliation is completed (and documented) for the trust account. Many firms find it helpful to use a checklist to ensure all three balances match (bank, trust ledger, client listings) each time.
- Establish a procedure for closing matters: within, say, 30 days of a case ending, review the client’s trust ledger, refund any remaining balance to the client (with a final accounting), and then mark that ledger closed. This prevents old funds from lingering unintentionally.
- When you receive a check for a retainer or settlement, immediately endorse it “For Deposit Only” into the trust account and log it in your receipts journal and the client’s ledger that same day.
- Monitor Client Balances (Avoid Negative Balances): Keep a close eye on each client’s trust balance, especially before issuing any check or payment. A negative balance for any client is a huge red flag – it means you’ve over-disbursed that client’s funds (likely using other clients’ money). To prevent this, always verify a client’s balance before authorizing a disbursement. Many modern software tools will warn you if a transaction would overdraft a client’s sub-account, but even so, double-check critical transactions yourself. If you ever do discover a negative client balance, you must immediately correct it (often by replenishing the shortage with firm funds, since it’s the firm’s responsibility to make the trust account whole) and then determine how it happened. In Hawaii, such an incident could trigger an overdraft report to ODC, so you’d also need to be prepared to explain the error and demonstrate corrective measures. The goal, of course, is to never let this happen by staying vigilant with each client’s ledger.
- Communicate with Clients About Their Funds: Transparency with clients is also a best practice. Your engagement letters or fee agreements should clearly explain how you handle client funds (for example, “any advance retainers will be deposited into a client trust account and we will bill against those funds; unearned amounts will be returned to you”). If you are holding a significant amount of money for a client or for a long period, consider sending periodic account statements to the client. Not only is this good client service, it also keeps you attentive to that client’s funds. If a client disputes a fee or a cost, remember that the disputed amount must remain in the trust account until the dispute is resolved – you cannot unilaterally take it if the client challenges it. Keeping open communication can help avoid misunderstandings that lead to complaints, and it reinforces that you are being a good steward of their funds.
- Stay Current and Seek Help When Needed: Laws and regulations can change, and common pitfalls evolve. Stay updated by reading any HSBA or Disciplinary Board announcements regarding trust accounting. If your firm undergoes changes (like taking on larger cases with substantial client funds, or bringing in new partners), revisit your trust procedures to scale appropriately. Don’t hesitate to consult an expert if you’re unsure about something – this could be a CPA familiar with law firm accounting or an ethics attorney. Sometimes a quick question to the Bar’s Practice Management Advisor or even an informal call to ODC can clarify an issue and save a lot of trouble. Also, consider having an outside auditor or accountant review your trust records annually as an extra precaution. Fresh eyes might catch issues that you overlooked. Ultimately, staying proactive and detail-oriented is key; trust accounting is not a “set and forget” part of your practice.
By implementing these best practices, you create a culture of compliance in your firm. Yes, it requires diligence and organization, but the payoff is huge: you protect your clients’ money, your firm’s reputation, and your license to practice. As one legal risk manager put it, client funds belong to the client, period – treating those funds with the utmost care is non-negotiable.
How LeanLaw Helps with Trust Accounting Compliance (Light Touch)
Managing all the moving parts of trust accounting can be challenging, especially for smaller firms without a dedicated accounting department. This is where technology like LeanLaw can provide peace of mind. LeanLaw’s legal accounting software is designed with trust compliance in mind – it automatically separates client funds from operating funds within QuickBooks and prevents common mistakes. For example, LeanLaw helps you track individual client ledgers, so you’ll get alerts if a ledger would go negative. It also supports the required three-way reconciliations, making it easier to perform your monthly and quarterly reconciliation duties. Because LeanLaw integrates directly with your bank feeds and accounting system, every trust transaction is logged with proper client matter attribution, and generating reports (like a list of client balances or a reconciliation report) is straightforward. While you as the attorney must still review and supervise your trust account, using such software can significantly reduce the manual workload and risk of error. In short, LeanLaw acts as an extra layer of protection to help ensure that your Hawaii trust accounting processes are airtight and in line with bar requirements – letting you focus on practicing law while confidently managing client funds.
(For more on trust accounting principles and tools, see our guides on trust accounting and law firm accounting software.)
FAQ: Hawaii Trust Accounting and IOLTA
Q: What funds need to be kept in a trust account?
A: Any money that you receive in the course of legal representation that belongs to a client (or a third party on a client’s behalf) must go into a client trust account. This includes retainers or advance fee deposits, settlement proceeds, escrow funds, and any other client funds you’re holding. In Hawaii, such funds should be deposited in an IOLTA trust account unless they are large enough or will be held for long enough to warrant setting up a separate interest-bearing trust account for the client. You should never deposit personal funds or firm funds into the client trust account, except a de minimis amount for bank fees as allowed by rule. And conversely, client funds should never be deposited into your firm’s general operating account. Keeping client money strictly segregated in trust is both an ethical and legal requirement.
Q: How often do I need to reconcile my trust account in Hawaii?
A: At minimum, you must reconcile the trust account monthly and also produce a quarterly report that lists each client’s balance and shows that the total of all client balances equals the trust account balance. In practice, best practice is to reconcile every month as soon as you receive your bank statement. The reconciliation should verify that your internal records (trust ledger and client ledgers) align with the bank’s records. Hawaii’s rules explicitly require keeping copies of all monthly reconciliations and the quarterly listings of client balances, so make sure you document these and retain them for the required six-year period. Regular reconciliation is crucial not just for compliance but for catching errors or irregularities (like a bank mistake or a bounced check) before they become bigger problems.
Q: Can I pay for firm expenses or withdraw my fees directly from the trust account?
A: You may withdraw your earned fees from the trust account, but only after those fees are earned (e.g., after you’ve performed the work and billed the client) and you must properly record the withdrawal. Typically, you would cut a check from the trust account to your firm’s operating account (or do an electronic transfer) for the amount of earned fees – never write a trust check to “Cash”. You cannot pay general firm expenses (rent, payroll, supplies, etc.) directly from the trust account – that is strictly forbidden. All disbursements from trust must be for the benefit of a client (or a refund to the client, or a transfer to your firm for earned fees). So, for example, you can use trust funds to pay a client’s filing fee to a court or to pay a settlement to a client – that’s using the money for the client’s purpose. But you may not use client A’s trust funds to cover client B’s costs, and you certainly cannot use client funds to cover any of your own expenses. In summary: withdraw funds for your fees only when earned (and in the exact amount earned), and otherwise use trust funds only to satisfy obligations related to that specific client.
Q: What happens if I make a mistake with the trust account (for example, a check bounces or I accidentally use the wrong client’s funds)?
A: If a trust account mistake occurs, it’s important to act quickly and transparently. First, if you discover the error yourself (e.g., you realize you over-disbursed from the account or a client’s deposit check was returned NSF after you issued payments), immediately take corrective action. This typically means restoring any shortage with firm funds to cover the shortfall – you must ensure clients’ money is made whole. Then, notify any affected client if appropriate (for instance, if a client’s settlement distribution will be delayed). Keep in mind, banks in Hawaii are required to report trust account overdrafts or bounced trust checks to the ODC. So if your mistake causes an overdraft, the regulators will likely learn of it quickly. It’s often prudent to self-report serious errors to the ODC before they hear it from the bank – self-reporting can be viewed favorably as a sign of candor and rehabilitation. Depending on the situation, ODC may simply advise you on how to fix it, or they might perform a compliance audit. The key is to not hide the mistake or delay addressing it. Preventing mistakes in the first place (through rigorous reconciliations and oversight) is best, but if one happens, fix it promptly and learn from it. You may also need to examine what went wrong in your procedures and tighten up your process to prevent a repeat. If necessary, seek guidance from a practice management advisor or ethics counsel on how to handle the aftermath of a trust error.
Q: Are there any resources to help ensure I’m handling trust accounts correctly?
A: Yes, several. The Hawaii State Bar Association provides information on IOLTA and trust accounting requirements (for example, they note that under HRPC 1.15 the trust account must be clearly labeled “Client Trust Account”). The Office of Disciplinary Counsel (via the Disciplinary Board) has published articles and offers the Client Trust Account School to teach best practices. These resources give valuable guidance straight from the regulators. Additionally, many legal technology companies publish guides and checklists (e.g., practice management software blogs often cover trust accounting tips). You might check out general guides like “Trust Accounting 101 for Law Firms” or the ABA’s resources on trust accounting. Lastly, using specialized software can be a big help – for example, practice management or accounting software built for law firms will have features to assist with trust accounting compliance (think of automatic three-way reconciliations, alerts for low balances, and built-in reports). While software isn’t a substitute for understanding the rules, it can act as a safety net. In short, take advantage of the knowledge already out there: the HSBA, ODC, Hawaii Justice Foundation, and various legal tech providers all have materials that can help you navigate trust accounting successfully.
By staying informed about Hawaii’s trust accounting rules and implementing disciplined practices, small and mid-sized law firms can avoid the common pitfalls that lead to trouble. Trust accounting may seem detailed or tedious, but it is fundamentally about protecting your clients and your practice. With careful attention to detail – and possibly a little help from technology – you can manage your IOLTA account confidently, knowing that you’re in full compliance with Hawaii’s requirements and providing the highest standard of care for client funds.
