2026 Client Trust Account Compliance Reviews for 400 Attorneys Launched

The State Bar's Client Trust Account Protection Program (CTAPP) team has begun notifying 400 California attorneys, randomly selected from a cross-section of the attorney population, that they will undergo a mandatory compliance review of their 2025 trust account recordkeeping.

The goal of the program is to protect client funds by detecting and deterring client trust accounting misconduct by ensuring attorneys comply with the Rules of Professional Conduct, identify gaps in knowledge by attorneys and their record keepers (attorneys or nonattorney staff), and offer best practices and implement corrective actions to ensure proper oversight of client trust accounting practices, which are ultimately the duty of each attorney responsible for the safekeeping of entrusted funds. Compliance reviews will be completed by accountants at State Bar-approved certified public accountant (CPA) firms and by CPA staff at the State Bar.  

The State Bar piloted the program as a voluntary effort involving 21 law firms in 2024, then launched the mandatory program with 100 randomly selected attorneys in 2025. Through the first two years of the reviews, the State Bar has often found attorneys, whether at large firms, medium-size firms, or solo practitioners, are not complying with important recordkeeping requirements which, if were in place, would prevent negligent trust fund management errors.

"Since its inception in 2023, the Client Trust Account Protection Program has helped attorneys better understand where they may need additional guidance in fulfilling their fiduciary responsibilities," said Steven Moawad, Special Counsel, State Bar Office of Regulation. "These reviews are designed to support attorneys and their staff in building strong, reliable recordkeeping practices that protect clients and reinforce confidence in the legal profession. By continuing these compliance reviews, we aim to provide clarity, promote accountability, and ensure that every attorney is equipped to meet their ethical obligations."

Rules of the State Bar, rule 2.6 outlines the requirements for a licensee to complete a compliance review. If selected, attorneys will receive instructions from the State Bar about the process and next steps. All records and information remain statutorily confidential, including when attorneys provide any information, records, or communication requested as part of the compliance review. See Business and Professions Code section 6091.4.

California attorneys manage over $14 billion in trust funds for clients, and the CTAPP compliance reviews aim to further enhance the protection of these entrusted funds.

According to the Office of Chief Trial Counsel (OCTC), bank reportable actions related to insufficient funds transactions in client trust accounts dropped 27 percent from 1,017 in Fiscal Year (FY) 2024 to 738 in FY 2025, continuing a downward trend from the FY 2023 peak of 1,402. This decrease likely resulted from educational and preventive efforts by OCTC and CTAPP, which was launched in FY 2023, including practical recordkeeping training and enhanced reporting requirements, which have increased attorneys' attention to trust-account management.

Resources available:

• CTAPP compliance review webpage
• Overview video explaining the compliance process
• Step-by-step chart of the review process
• Client trust accounting resources and training
• Guidelines on working with accounting firms and exemptions

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The State Bar of California's mission is to protect the public and includes the primary functions of licensing, regulation and discipline of attorneys; the advancement of the ethical and competent practice of law; and support of efforts for greater access to, and inclusion in, the legal system.