Is a law practice partnership required to open a new trust account upon the resignation of a partner

Section 33 of the Legal Profession Regulation 2007 provides that a law practice may establish a general trust account at any time.

The term "law practice" is defined in Schedule 2 to the Legal Profession Act 2007 to mean:

1. an Australian legal practitioner who is a sole practitioner; or
2. a law firm; or
3. an incorporated legal practice; or
4. a multi-disciplinary partnership.

Except in the case of a law firm consisting of 2 partners, a law firm does not cease to be a law firm as the result of the resignation of a partner. The resignation of a partner simply changes the composition of the law firm. Similarly, the appointment of a new partner changes the composition of the law firm.

Accordingly, whilst it is open to a law firm to open a new trust account each time there is a change in the composition of the law firm, it is not a requirement of the legislation that the law firm do so unless the law firm changes from a law firm to a sole practitioner (as the result of the resignation of one or more partners).

Can MYOB or Quickbooks be used to record trust account transactions?

MYOB and Quickbooks do not satisfy the requirements of section 31 of the Legal Profession Regulation 2007 and therefore do not qualify as a computerised accounting system for the purposes of sections 29 - 32 of the regulation.

Notwithstanding that, MYOB and Quickbooks can be used to keep the trust accounting records provided that updated trust account cash books and trust ledger accounts are printed at the end of each day and retained as a record until they are replace by updated printouts.