Be Proactive: State Bar recommendations for trust account compliance

Preparing for a State Bar compliance review is not just about meeting regulatory requirements--it's about building a culture of accountability, transparency and trust within your law practice. Whether you're a solo practitioner or part of a larger firm, the steps you take today can save you time, money and unnecessary stress. In September 2025, the State Bar's mandatory Client Trust Account Protection Program (CTAPP) compliance reviews kicked off with 100 attorneys and firms selected to participate. While the first group of mandatory compliance reviews is nearly complete, the compliance review program is expanding in 2026. This State Bar article outlines five practical recommendations for attorneys to proactively prepare for a compliance review and improve trust account recordkeeping practices.

1. Collaborate with your bookkeeper or accounting professional

Schedule a dedicated session with your bookkeeper--whether that person is an outside CPA, in-house accountant, CFO or another financial professional responsible for daily record maintenance. Many issues identified during the compliance review process stem from a lack of communication between the attorney and the trust account recordkeeper. This isn't surprising, considering both the lawyer and the accountant may not understand what the other does not know. As a licensee with a nondelegable duty to supervise, and as the designated licensee under Rules of the State Bar, rules 2.4(F) and 2.5(E), you are responsible for reviewing the accountant's work, including completed monthly three-way reconciliations, and ensuring compliance with applicable Rules of Professional Conduct and Rules of the State Bar.

Recommendation:
Review together Rules of Professional Conduct, rule 1.15 in its entirety--paragraph by paragraph. This document is pivotal in clarifying responsibilities that will be essential during the compliance review process. The first part of rule 1.15 focuses on compliance duties more easily understood by the attorney, while the second part details the standards for bookkeeping--what records must be kept, what information must be included, and how transactions should be documented. These standards are unique to the legal profession, and even a highly trained bookkeeper would not necessarily be aware of them. This collaborative review helps clarify responsibilities, identify any gaps or limitations in your current practices, and ensure both parties are aligned before a compliance review begins.

2. Know what accounts you hold and who's responsible for them

Do you know what trust accounts you or your firm hold and who is responsible for them? Established firms may have older, seldom-used trust accounts that are still open. If your firm holds multiple trust accounts--whether IOLTA or non-IOLTA trust accounts--the accounting records may not be held in a central location and therefore may not be readily available to provide to the State Bar when selected for a compliance review. Rule 2.5 of the Rules of the State Bar requires California licensees to register (or have their firm register on their behalf) every trust account for which they have safekeeping responsibilities under Rules of Professional Conduct, rule 1.15, including accounts infrequently used, held in other states, with low activity, or opened years ago. Keeping track of all trust accounts held by the law firm and determining who is responsible for them is part of the compliance review process, and a surprising number of law firms of all sizes struggled with this during the first 100 compliance reviews.

Recommendation:
Inquire internally, and potentially with your banker, to determine and document all trust accounts held by the law firm. Determine the designated licensee for each trust account, as defined and required by Rules of the State Bar, rules 2.4(D) and 2.5(E), and document with the list of trust accounts. Providing an incomplete or inaccurate list of trust accounts or not knowing who is responsible for the account(s) delays the compliance review process and may indicate lack of supervisory oversight by the law firm.

3. Know what records you must maintain and what information must be recorded in each one

When selected for a compliance review, the State Bar will request specific records. One of the most critical records is the account journal for each trust account holding California client funds--whether you have one trust account or many.

What is an account journal?

The account journal is like a checkbook (or general ledger) for your trust account. It is a comprehensive view of your trust account activity, recording every transaction that takes place in chronological order--from the day the account is opened until it is closed. Importantly, each transaction must identify the associated client. If your trust account journal lacks this information, your recordkeeping is incomplete, and the State Bar may request additional information to determine who is associated with each transaction.

Recommendation:
Educate yourself about how to maintain complete, accurate trust account journals that are compliant with rule 1.15. Don't wait until a review is underway to try to create the record or populate missing data. You have 30 days to respond to the initial records request, which includes providing the trust account journals for all California trust accounts. Scrambling to gather information can lead to errors or potential noncompliance. The best practice is to establish a monthly routine in which you personally review trust account journals and reconciliations. Even a brief review can help detect issues early and demonstrate active supervision.

4. Utilize State Bar resources

The State Bar offers self-assessment tools--specifically an attorney self-assessment and a law firm self-assessment--that can be invaluable during your preparation. The law firm self-assessment is designed to help you prepare for the compliance review process by walking you through the areas that will be evaluated.

Recommendation:
Complete the assessments proactively. Use these self-assessments as a checklist to identify and correct any compliance issues. Review the resources listed in the self-assessments, follow up on unclear items, and make necessary adjustments to your procedures now--before you are selected for a compliance review.

5. When selected, respond early to the initial records request

Once selected for a compliance review, you'll receive both an email and a phone call from the State Bar. A dedicated State Bar staff member will be assigned to you to guide you through the process and provide access to resources, such as the CTAPP Compliance Review webpage and overview video.

The first step is to provide certain trust account information within 30 days, as required by Rules of the State Bar, rule 2.6(A). This request should not be burdensome. Some attorneys have submitted records within a day. We suggest providing the records ahead of the deadline, which allows State Bar staff to review them and provide feedback so that you may update the initial production. This will allow the CPA firm to have the records it needs prior to the compliance review engagement.

Recommendation:
During the first 100 compliance reviews, over 80% of law firms submitted incomplete or incorrect initial records--often at the deadline. If your initial records remain incomplete after the deadline, CPA firms must spend extra time addressing these issues, which delays the compliance review and can increase costs. To save time and money, respond to the initial records request early, not on the last day. Early submission allows the State Bar staff to review and provide feedback before records reach the CPA firm, ensuring completeness and a prompt start to the compliance review process.

Final thoughts: Be proactive, not reactive

Don't wait until you're selected for a compliance review to start preparing. Comprehensively preparing for a compliance review is a proactive investment in your legal practice. By strengthening your recordkeeping practices, understanding your obligations, and leveraging State Bar resources, you not only protect your clients and firm but also enhance client trust and satisfaction. This thorough preparation ultimately reduces the likelihood of client complaints and fosters a culture of compliance within your organization. Investing time and effort now will save you time and resources in the long run.