Law Practice Essentials

Another anti-money laundering measure brought in by the Law Society in 2005 was to prohibit the receipt of more than $7,500 in cash.

The Rules of the Law Society of Alberta, Rule 119.57(1) states: “A lawyer must not receive or accept cash in an aggregate amount greater than $7,500 Canadian dollars in respect of any one client matter.”

This Rule applies when lawyers engage on behalf of a client, or give instructions on behalf of a client, in respect of:

• Receiving or paying funds;
• Purchasing or selling securities, real properties, or business assets or entities;
• Transferring funds by any means (Rule 119.57(3)).

However, the Rule does not apply when the lawyer receives cash:

• From a financial institution or public body;
• From a peace officer, law enforcement agency or other agent of the Crown acting in his or her official capacity;
• To pay a fine, penalty, or bail; or
• For professional fees, disbursements, or expenses, 

provided that any refund out of such receipts over $7,500 is also made in cash. (Rule 119.57(4)).

You should make your staff aware of these Rules. It is easier to explain to a client at the outset that you cannot accept cash amounts greater than $7,500 than to figure out what to do once you have received cash in excess of this limit.

Remember as well that the only funds you may deposit into your trust account are those directly related to legal services you or your firm are providing (Rule 119.19(1)).

How to Refund Unused Cash Retainer

It is recommended that lawyers return funds in the same manner they were received: if the client pays by cash, refunds are in cash; if the client pays by cheque, refunds are by cheque; if the client pays by credit card, they are refunded by credit card; and if the client pays by debit card, they are refunded by credit to their debit card.

Generally, a lawyer cannot issue cheques payable to cash or bearer. However, the exception is in circumstances where the lawyer is required to refund cash for professional fees, disbursements, or expenses. See Rules 119.30(2)(b) and 119.57(4)(d).