AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A law firm's client money checks confirm three things: client funds are held apart from the firm's own money, every naira in the client account is matched to a named client and matter, and nothing leaves for fees or expenses without a bill and an approval. Rule 23(2) of the 2007 Rules of Professional Conduct required lawyers to account promptly for client money and never mix it with their own; the 2023 Rules, in force since 1 January 2024, now govern.
The rule behind the checks
Rule 23(2) of the Rules of Professional Conduct for Legal Practitioners 2007 required a lawyer who collects or holds money or property for a client to report and account for it promptly, and not to mix it with the lawyer's own funds or use it as the lawyer's own. Those Rules were replaced by the Rules of Professional Conduct for Legal Practitioners 2023 (S.I. 32 of 2023), made by the General Council of the Bar, which commenced on 1 January 2024. Read the current text of the 2023 Rules for the exact wording now in force; the separation principle is the starting point for every check below.
In practice, separation means a dedicated client account at a bank, a ledger for each client and matter, and a firm account that client money never touches except when a fee is properly earned and billed.
The checks that matter
1. The reconciliation
At least monthly, and daily for busy conveyancing or recovery practices, three numbers must agree: the client account bank balance, the client cash book, and the total of all individual client ledger balances. If they do not, something is wrong, and the difference must be found, not carried forward.
2. No negative client ledgers
If one client's ledger goes below zero, another client's money has been used to pay for them. This is the most common breach in small practices: a filing fee paid for Client A from the client account before Client A's deposit arrived.
3. Fees only after a bill
Money moves from client account to office account only when a bill or written notice of costs has been given and the client has agreed or the agreement allows it. The record should show the bill reference next to every transfer.
4. Bank charges and interest
Bank charges debited to the client account are the firm's cost, not a client's. Replace them from the office account promptly. Decide in your engagement letter how any interest earned on client funds is treated.
5. Dormant balances
Small balances left after a matter closes are still client money. List any balance with no movement for six months and write to the client to return it.
Worked example: a reconciliation that does not balance
Example only. At month end:
| Item | Amount |
|---|---|
| Client account bank balance | ₦18,450,000 |
| Matter A (property purchase deposit) | ₦12,000,000 |
| Matter B (debt recovery proceeds) | ₦4,200,000 |
| Matter C (settlement funds held) | ₦2,500,000 |
| Total of client ledgers | ₦18,700,000 |
| Difference | ₦250,000 short in the bank |
The ledgers say the firm holds ₦18,700,000 for clients, but the bank holds ₦18,450,000. The check finds two causes: a ₦200,000 fee was moved to the office account for Matter B before the bill was sent, and ₦50,000 of bank charges were taken from the client account. Both are reversed from the office account: ₦200,000 plus ₦50,000 is ₦250,000, and the account then balances. Each correction, and who approved it, is recorded.
Who should do the checks
In a small chambers the same person often receives money, posts it and pays it out. That is where errors and worse go unnoticed. Split the roles even if the firm is only three people: the accounts officer posts receipts and prepares payments, a partner approves payments out, and a different partner or an outside accountant reviews and signs the monthly reconciliation. Keep each signed reconciliation, its bank statement and the list of ledger balances together in one file per month, so that anyone reviewing the practice later can follow the trail without reconstructing it.
When a difference appears, record what was found, what was done and who approved the correction on the same page. A reconciliation that balances only because someone typed a balancing figure is worse than one that shows an honest, explained difference.
Alerts worth setting
- Any client ledger below zero.
- Any transfer from client account to office account without a bill reference.
- Reconciliation difference of any amount, however small.
- Client account payments to a new beneficiary.
- Large cash received for a client. The MLPPA 2022, section 2, as quoted in 2022 reporting, bars cash payments above ₦5,000,000 for individuals and ₦10,000,000 for bodies corporate except through a financial institution.
- Balances with no movement for six months.
What to check first
- The client account is in the firm's name and clearly titled as a client account at the bank.
- Every receipt is posted to a named client and matter the same day.
- The partner who approves payments out is not the person who prepares them.
- Reconciliations are signed and dated, and differences are explained in writing.
For the wider rules, see client money rules for Nigerian law firms and billing legal fees, WHT and retainers.
Where Pryme fits
A Pryme Business Account can keep client and office money in separate accounts through multi-account. The Compliance agent can prepare the reconciliation and raise the alerts above; a partner approves any payment above the ceiling you set, and every action is recorded, which helps when the trail is reviewed later (see audit trails for AI agents). Whether a particular account meets your professional obligations is a matter for the Rules and your own legal judgement.
Questions people ask
Can a Nigerian lawyer keep client money in the firm's account?
The 2007 Rules (rule 23(2)) barred mixing client money with the lawyer's own funds. The 2023 Rules now apply from 1 January 2024; check their exact text, but separation remains the principle.
How often should a law firm reconcile its client account?
No interval is quoted here from the Rules. Monthly is a sensible minimum, and daily for practices handling property or recovery money.
What is a negative client ledger?
A client's ledger balance below zero, meaning money held for other clients has been used for that client. It should be corrected from office money at once.
Can I take my fee from the client account?
Only once the fee is properly billed and the client has agreed or the engagement terms allow it, with the bill reference recorded against the transfer.
Sources
- Rules of Professional Conduct for Legal Practitioners 2007 (Edo State Judiciary copy) · accessed Oct 2026
- Rules of Professional Conduct for Legal Practitioners 2023 (S.I. 32 of 2023), judy.legal · accessed Oct 2026
- TheCable: Falana on cash withdrawal policy, quoting MLPPA 2022 s.2 (12 Dec 2022) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.