Client expense deposits: handling them so clients trust every claim

Most firms ask clients to advance money for the costs of a matter: court and filing fees, certified translations, experts, travel, couriers. Clients rarely object to the principle. Friction starts later, when an expense claim arrives and the client cannot tell how it relates to the deposit they paid three months ago.

A good deposit routine answers that question before the client asks it.

Keep deposits separate from fees

Money advanced for expenses is not payment for legal work. Record it separately, allocate it to the matter it was given for, and never let it quietly absorb an unpaid fee invoice. Mixing the two is the fastest way to lose a client's trust.

Draw on the deposit as expenses are approved

When an expense is approved, record at that moment how much of it the deposit covers. Leaving the deduction until the claim is prepared makes it easy to double-count or forget, especially on busy matters with several people spending.

Show the deduction on the claim

A claim should not just list what was spent. It should say, in plain lines:

• the total expenses for the period,
• the part already paid from the client's deposit,
• the amount left to collect.

That one extra line removes most of the questions clients ask about expense claims.

Attach the receipts

A receipt behind every line turns a claim from a request into evidence. Clients who can see the court receipt or the translator's invoice rarely dispute the amount.

Tell the client when the deposit runs low

A short note when the balance falls below the next expected cost is far better than a surprise claim. It also gives the client time to arrange the next advance before work has to pause.

Reconcile before you close the matter

At the end of a matter, the deposit account should reach zero: either every unit has been spent on documented expenses, or the remainder goes back to the client. A final statement that shows this is the last impression the client keeps of your firm.

In practice

In Lexivo, deposits are allocated per matter, drawn down automatically when expenses are accepted, and shown on every claim as a deduction with the amount left to collect — with the receipts attached.