How Long Must Law Firms Keep Client Account Records?

Introduction

Law firms in the UK are required to handle client money with great care, ensuring transparency, accountability, and compliance with regulatory standards. One of the key responsibilities under the Solicitors Regulation Authority (SRA) Accounts Rules is maintaining accurate and complete records of all client account transactions.

But how long must law firms keep these records, and what are the specific requirements for retention and accessibility? This article explains the SRA’s rules on client account record keeping, why proper retention is so important, and how firms can manage records efficiently and securely.

The SRA Accounts Rules and Record Keeping

The SRA Accounts Rules govern how solicitors must handle client money, ensuring it is kept separate from the firm’s own funds and used only for its intended purpose. Rule 13 of the SRA Accounts Rules 2019 outlines the requirements for maintaining and retaining accounting records.

These records must:

• Provide a clear and accurate picture of all client money held.

• Identify each client’s balance and transaction history.

• Be kept up to date and capable of being audited.

Law firms are responsible for ensuring that these records are accurate and available for inspection by the SRA or reporting accountants when required.

The Minimum Retention Period

According to the SRA Accounts Rules, law firms must keep client account records for a minimum of six years from the date of the last entry in the records.

This applies to all documents and data relating to client money, including:

• Bank statements and reconciliations for client accounts.

• Ledgers showing receipts and payments for each client.

• Cash books, journals, and transfer records.

• Bills, invoices, and payment authorisations.

• Any correspondence related to client account transactions.

The six-year retention period applies regardless of whether the file is closed, the client relationship has ended, or the firm has ceased to act.

Why the Six-Year Rule Exists

The six-year requirement is designed to:

• Allow clients and regulators to review transactions if a dispute or investigation arises.

• Provide sufficient time for HMRC or other authorities to inspect financial records.

• Support transparency and accountability for solicitors who manage client money.

In some cases, firms may choose to retain records for longer, especially where there is a risk of ongoing litigation, long-term trust administration, or regulatory investigation.

Digital vs Paper Records

The SRA does not require firms to retain paper copies of client account records as long as the electronic versions are clear, accessible, and backed up securely.

Law firms may keep records in digital form if:

• The records are complete and unaltered.

• They can be printed or shared with the SRA upon request.

• Appropriate data protection and cybersecurity measures are in place.

Electronic record keeping is now standard practice for most firms, especially those using cloud-based legal accounting systems that integrate with case management software.

Record Keeping When a Firm Closes

If a law firm closes, the partners or managers remain responsible for ensuring client account records are retained for six years. This duty continues even if the firm no longer operates.

When a firm merges or is acquired, the successor practice must ensure access to the previous firm’s client account records for the required period. The SRA may also require firms to store these records with an approved archiving provider if the firm is wound up without a successor.

In all cases, the SRA expects firms to have a plan for the secure storage and retrieval of records in the event of closure.

What Happens If Records Are Not Kept

Failure to maintain or retain proper client account records can lead to serious regulatory consequences, including:

• Breach of the SRA Accounts Rules.

• Disciplinary action or fines.

• Reputational damage.

• Difficulty defending against client complaints or claims.

Without adequate records, a firm may be unable to demonstrate that client money was handled correctly, which can also affect insurance coverage in the event of negligence claims.

Managing Records Efficiently

To stay compliant and organised, law firms should:

• Use a legal accounting system that automatically records all client transactions.

• Reconcile client accounts at least every five weeks, as required by the SRA.

• Maintain separate ledgers for each client matter.

• Store records securely, with restricted access for authorised staff only.

• Create a clear policy for record retention and destruction after the six-year period.

Firms using digital systems should also ensure data is regularly backed up and encrypted to protect against loss or cyberattacks.

Example Scenario

A law firm completes a property transaction for a client in January 2024. The last entry in the client ledger is made on 15 January 2024. Under the SRA’s six-year rule, the firm must keep all related client account records until at least 15 January 2030.

If the firm closes in 2026, it must still ensure that these records are securely stored and accessible until 2030 in case of any future audit or client enquiry.

The Accountant’s Role in Record Compliance

An accountant can help law firms meet their record-keeping obligations by:

• Performing SRA client account audits and reconciliations.

• Reviewing internal controls to ensure compliance.

• Advising on efficient digital record-keeping systems.

• Preparing reports for the SRA if breaches are identified.

Accountants familiar with SRA compliance can also help firms prepare for regulatory inspections and implement stronger financial governance procedures.

Data Protection Considerations

Client account records often contain sensitive personal and financial information, so firms must also comply with the UK General Data Protection Regulation (GDPR) and Data Protection Act 2018.

Firms must ensure that:

• Data is securely stored and access is restricted.

• Records are only retained for as long as required.

• Clients are informed of retention policies in privacy notices.

• Records are destroyed securely once the retention period ends.

Balancing the SRA’s retention requirements with GDPR obligations is essential to avoid breaches of either regulation.

Conclusion

Law firms must keep client account records for at least six years from the date of the last entry, as required by the SRA Accounts Rules. These records must be accurate, complete, and accessible, whether kept digitally or in paper form.

Proper record keeping protects the firm, its clients, and its reputation, ensuring compliance with regulatory and legal standards. With the help of accountants and robust accounting systems, law firms can maintain clear, compliant, and secure financial records for every client matter.