Third Party Managed Accounts
What is a Third Party Managed Account (TPMA)?
A TPMA is essentially an outsourced client account. Rather than holding client money in a law firm’s own bank account, a fully regulated third party holds it to the firm’s order. The SRA Accounts Rules do not apply to money held in a TPMA.
As part of the more flexible Standards and Regulations, the SRA has officially made TPMAs an option for law firms.
De-risking a law firm
Holding client money comes with huge responsibility, administration costs and compliance burdens.
The Solicitor Disciplinary Tribunal deals with a conveyor belt of cases involving Accounts Rules breaches, handing out reprimands and fines to strike offs. If you transfer money to a scammer, that’s on you and your insurer. Client accounts need proper controls and systems in place to keep client money safe. You will probably need a dedicated cashier. And you will spend valuable time grappling with the SRA Accounts Rules. Client accounts also need to be audited annually.
That’s a lot of headache for very little gain.
By outsourcing this function to a third party, a law firm can concentrate on getting the transaction done for the client.
How to outsource a solicitor’s client account
Quite simply instruct a TPMA provider. They will seamlessly onboard you onto their platform so that you are ready to provide details to your client.
Is a TPMA suitable for all types of law?
Yes. TPMAs can be used for all types of transactions (including conveyancing).
How much does a TPMA cost?
The cost varies depending on the platform, but it will be significantly less than a legal cashier salary.
And of course what you are really buying is the peace of mind knowing that you do not need to worry about client money.