NCJ Number
106303
Journal
ABA Journal Dated: (August 1, 1987) Pages: 78-82
Date Published
1987
Length
5 pages
Annotation
This article describes methods that have been used by employees to embezzle funds from law firms and suggests means to prevent this.
Abstract
One case involved a bookkeeper with complete authority over office finances. She wrote and signed checks for unlimited amounts of money without her employer's approval. Another law firm employee took cash from clients, entered a lower amount in the books, and pocketed the difference. A third case involved a law-firm employee's stamping the backs of checks made out to the firm, forging a partner's signature, and depositing the checks in her own account. Such embezzlement schemes can be countered by requiring check requests, including payment date and check number, for all checks, with a lawyer's approval for each one. A person without check-signing authority should prepare the checks, and one partner should sign all general expense and payroll checks. Independent annual audits should also be conducted. Law firms should require clients to make checks payable to the firm and not to an individual lawyer or staff member, and managing partners should spot check the mail to ensure checks are made out to the firm. Daily cash receipts should be entered in one book, and client payments should be entered in individual files.