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Clio Trust Requests for Retainers or Advance Fees

Join us in learning about the best way to request advance retainers using Clio.
Clio Trust Requests for Retainers or Advance Fees
Written by
Paul W Carlson, CPA
Published on
Dec 2, 2023

This video walks us through best practices in sending advance retainer fee requests to clients. Stay until the end to find out a big mistake that can happen with entering manual checks!

Clio Trust Requests for Retainers or Advance Fees


Paul W Carlson:

Hi, this is Paul Carlson, CPA with Law Firm Velocity. This video we're going to talk about Clio Trust Requests. Most firms refer to this as requesting retainers. If you call your state bar and call it a retainer, you might get an earful, so just be careful in the language. Essentially, we're asking for money from clients in advance. And then once we have those funds, we bill against the advanced money with hourly invoices. This video's going to talk about requesting the funds and how to record the payments we receive into Clio.

The first process, the manual process, is to manually contact the clients and say, "We need more money to keep working on this matter." You can either call them or email them and say, "Hey, you need to mail us a check, and then when that money comes in, we will post it." Another process is to have a LawPay account and you can send clients a link to this account and say, "You need to send us an additional $5,000." The client adds the $5,000 deposit to this page. And once you hit click here, the credit card processes and the firm gets the advance fee money. I don't know who this firm is. I just did a Google search for LawPay, pay invoice, and they were nice enough to donate a page for this video.

So far in the process, we have requested money from a client, and the client has somehow paid. Either they sent us money through LawPay, or through a credit card, or they mailed a check into the firm. Once we have those funds, we want to go ahead and record that payment into Clio. So we go to the accounts, you go accounts, select the trust account, and we select add. And so this is going to the IOLTA account. Say they sent us $5,000, the date is the date that the firm received the money. If you're posting a credit card payment, always post as of the credit card swipe date, not the date that the money appeared in the firm checking account.

Source is the name of the person who paid. And so oftentimes, we'll see where Bob Smith will pay Jane Doe's bill, and so we want to keep track of who the funds came from. For description, you can do retainer or advance fee deposit, and if you have a check number, you can enter that here. And so then here we want to post that money into a specific client. We're going to do client A and we're going to post that money into a specific matter. So we'll put it in client A. For most firms, they have one matter for each client. And so within Clio, you can keep money at the client level or at the matter level. For most firms, you want to specify both the client and the matter so the trust funds are kept at the matter level. If the trust funds are kept at the client level, things get a lot more complicated.

With this, we record the transaction and we can see that we have recorded the advanced fee deposit into Clio. That all is quite a bit of work. Clio has been nice enough to add a automated process they refer to as "trust requests." To do this, we go into bills, new trust request. We type in the name of the client. And we want the funds again to go into the matter and we want to put it into client A or into the matter number nine. And we want to request $5,000. And we're going to issue the request today. We'll skip the approval process because we're going to do it right here on the screen. With this, we create the trust request.

Now be careful, at this point we've only created the request within Clio. The client doesn't know we've done anything yet. What we need to do next is we need to share the trust request with the client. Here, we are going to email the trust request to the client. We'll go ahead and hit share. And so the trust request has been emailed to the client. At this point, the client will get an email, they can open the email, and Clio has been integrated with LawPay. So when the client pays the trust request through LawPay, that payment automatically posts into Clio and we will just come in and look at the history and we'll see the payment. Part of this is, if you're the office manager in charge of this process, you want to make sure that you have a reports only login to LawPay so you can monitor the trust deposits coming in. And you want to make sure that you get copies of all checks that go into trust.

Let's look at one dangerous piece with the trust request process. So we're going to create a new trust request. A, put the money into the matter, $5,000. Okay, so we're going to skip the approval process. Let's assume that we've shared this and we have this outstanding trust request, that it is down here. If the client mails us a check, a manual check, we can come in and say, "Oh yeah, we got this payment today and it is going to... So this is all we need to do is we just record the payment into trust." That's how we do a manual payment. Now let's take a look at the problem. We go look at the Alto account.

Let's say we discovered that actually, that client didn't send in $5,000, that actually it was a different client or we just weren't paying attention and we happy-clicked our way in; That once a manual direct trust request payment has been entered to Clio, you can't delete it. See where all these other payments have a place to hit delete that we can delete those? There's no button here to delete this.

Even if we go into the client, actually click into the matter, transactions, trust. So here's a direct payment. Again, even from the matter, there's no way to delete this. What has to happen is we have to create an offsetting entry within the trust account to offset this amount. And we like to keep a copy or include an IOLTA statement at the bottom of every client invoice. And so that in and out will appear on all client invoices for as long as the client is with the firm. So be very, very careful posting manual IOLTA deposit, or be very careful posting manual trust request deposits.

And with that, we've talked about Clio trust requests and a couple of ways to accept payments. With that, if you have any questions on law firm accounting, please give us a shout over at Law Firm Velocity.