Law Practice Essentials

It is good practice to develop a file closing procedure and checklist to capture all of the steps you need to take to close a file. Many of these also include Code obligations and Rules under the Rules of the Law Society of Alberta so consistent compliance is necessary. Before a file is closed, you should ensure that you have provided a closing letter to your client advising them that you are closing their file and returning client documents. You must also ensure that there is a zero-trust balance and you must print the client trust ledger and accounts receivable ledger for the closed file (Rule 119.34(4)(b)). You should close the file in your practice management/trust accounting software, remove it from your Master File List and add it on your closed file list. Another consideration is whether you need to file and serve a Notice of Withdrawal. It is important to take this step where necessary so that you do not face unexpected obligations in the future.

Please refer to the File Retention and Disposal module of this course for a more comprehensive discussion of file closing considerations including retention, management and destruction. This module outlines what you need to keep on a closed file, why you need to keep it and for how long. A sample closing file checklist can be found at the end.

Your procedure and checklist should include the following steps, at a minimum:

• confirm that all trust conditions and/or undertakings are complete or not applicable;
• send closing letter to client advising of file closure and returning any client documents;
• ensure zero trust balance and print off client trust ledger and accounts receivable ledger for the closed file (Rule 119.34(4)(b)(ii));
• retain copies of trust ledger card and accounts receivable ledger in a central file maintained for closed ledgers (Rule 119.34(4)(b)(i));
• retain client identification and verification documents for a period of at least six years following completion of work for which lawyer was retained (Rule 119.51(3)(b));   
• close file in practice management/trust accounting software;
• remove file from Master File List;
• add file to closed file list;
• indicate a date for destruction on closed file list (this should be a minimum of 10 years considering the obligations surrounding prescribed financial records (Rule 119.35) and the Limitations Act); and
• consider whether a formal Notice of Withdrawal is required.