Last year, we saw law firms telling the SRA: We want to keep our client accounts.
Whilst not surprising, it does highlight a predictable resistance to change—a natural reaction when entrenched practices are questioned. But as someone deeply involved in the practicalities of managing client money, I’d argue it’s time to look beyond tradition and focus on what’s best for the future of legal services, client protection, and the profession’s reputation.
Let’s address the concerns raised by the survey head-on and explore why Third-Party Managed Accounts (TPMAs) are not just viable but critical to modernising how we manage client money.
Solicitors Have Always Done It This Way—So Why Change?
We’ve seen and heard comments about solicitors successfully holding client money for generations and it’s a fair reflection of the industry’s history. But history doesn’t always justify the status quo. The legal sector has changed dramatically in recent years, with increased regulatory scrutiny, growing cyber risks, and high-profile failures such as Axiom Ince exposing vulnerabilities in the current model.
The SRA’s longer-term ambition to move away from law firms holding client money isn’t about undermining trust in the profession—it’s about addressing modern challenges with modern solutions.
TPMAs Will Hurt Client Experience and Delay Transactions
The idea that TPMAs will reduce the quality of client experience or slow down transactions is a misconception that often stems from unfamiliarity with the solution.
At Shieldpay, our TPMA solution is built to enhance—not hinder—client experience. By automating key processes like payee verification, reconciliation, and fund disbursement, TPMAs eliminate inefficiencies inherent in traditional client account management.
For example:
- Payments are processed in real-time or same day through Faster Payments or CHAPS, ensuring speed and precision.
- Multi-party transactions are simplified, reducing administrative delays that frustrate clients.
Far from being a step back, TPMAs represent a leap forward for firms looking to deliver efficiency and transparency.
TPMAs Add Costs & Risk for Firms
Yes, adopting TPMAs requires a shift in approach, but it’s a misconception to assume they add unnecessary costs or risks. In fact, TPMAs eliminate many hidden costs and risks associated with holding client money:
- Reduced Administrative Burden: Manual reconciliation and compliance checks are resource intensive. TPMAs automate these processes, freeing up valuable time for fee earners.
- Enhanced Fraud Prevention: With transaction monitoring and FCA-regulated safeguarding, TPMAs provide a critical line of defence against fraud and theft —an increasing threat in today’s digital landscape.
- Auditing Costs Saved: it potentially saves on auditing costs and PI insurance premiums.
- Support Scaling Up: By using an efficient TPMA, this can support firms looking to scale up their businesses.
The result? Lower operational costs and stronger client trust.
TPMAs Are Impractical & Unviable
The claim that TPMAs aren’t practical or viable ignores the progress the legal sector has already made in adopting technology. Many forward-thinking firms are already using TPMAs to handle payments and support client transactions.
Take litigation, for example. Shieldpay has—a tangible benefit that directly addresses client frustrations about delays. The idea that TPMAs slow things down simply doesn’t hold water.
Reframing the Debate: What’s Really at Stake?
It’s easy to see why the idea of relinquishing control over client money feels uncomfortable for law firms. It challenges deeply held assumptions with how the industry has operated—we understand this is a major culture change for the sector and cultural change is hard.
But this isn’t about taking control away from law firms—it’s about providing a safer, smarter framework that benefits everyone:
- Clients gain greater transparency, security, and efficiency.
- Firms can reduce their regulatory and operational burden, focusing on what they do best: delivering legal expertise.
- The Profession enhances its reputation by adopting practices aligned with modern expectations and standards.
The Path Forward
The legal sector has a responsibility to innovate in the face of evolving risks and client demands. Holding on to the past may feel comforting, but it doesn’t address the challenges we face today—or those we’ll face tomorrow.
Rather than resist TPMAs, we should embrace their potential to strengthen client protection, improve efficiency, and elevate the profession’s standing. Change may be daunting, but it’s also an opportunity to lead.
The future of client money management isn’t about taking a sledgehammer to crack a nut—it’s about building a safer, smarter, and more efficient system that works for everyone.
Talk to a Client Money expert today to understand if it could save you time or enhance the services you offer to your clients.
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