FLK2 Practice Assessments Mock Exam No.1 – Session 2: Questions 13 and 49
August 2026
The SRA has issued guidance on the use of third party managed accounts.
Q13 of 90
Two solicitors are setting up a law firm in partnership. They intend to specialise in property law.
Which of the following best describes the type of banking arrangements the solicitors should use?
A.The solicitors may choose to set up a joint bank account into which they pay both client money and business money.
B.The solicitors cannot choose to use a third-party managed account.
C. The solicitors must use a third-party managed account.
D. The solicitors do not need to operate a client account as the only client money they will receive is for their own fees and unpaid disbursements prior to delivery of a bill.
E. The solicitors will need to operate a client account and/or use a third-party managed account.
A13 of 90 Area of law assessed: Solicitors accounts
The correct answer was E. This is because the partners will be specialising in property law, and, therefore, they will be handling client money as part of the legal services they provide, for example, mortgage advance funds, proceeds of sale, purchase monies etc. They will therefore need to operate a client account and/or use a third-party managed account(s). If the money is held in a third-party managed account(s), it is no longer ‘client money’. Option A is incorrect because it is a breach of the SRA Accounts Rules to keep business money and client money in the same account (there are very limited exceptions to this principle, for example, where the firm specialises in criminal defence work and only acts for legal aid-funded clients). Options B and C are both incorrect because the partners can choose to use a third-party managed account should they wish to do so. There is no prohibition on them making this choice (option B) or requirement to do so (option C). Option D is incorrect because property law transactions require the firm to hold client money as an integral part of the legal services provided.
Q49 of 90
A probate solicitor acts as the firm’s Compliance Officer for Finance and Administration. The solicitor is reviewing the types of bank accounts in which client money may be held.
Which of the following statements accurately describes the types of accounts in which client money can be held?
A. Client money must be held in a client bank account. This can either be the firm’s general client account or a separate designated deposit client account.
B. Firms cannot use a third-party managed account as well as their own client accounts.
C. A solicitor can never act as signatory on any bank account other than those operated by the firm.
D. A solicitor can operate a joint bank account, with someone outside the firm, to hold client money in certain circumstances.
E. Client money can only be held in the firm’s general client bank account.
A49 of 90 Area of law assessed: Solicitors’ Accounts
The correct answer was D. This is because the SRA Accounts Rules permit a solicitor to operate a joint account in certain circumstances. For example, this will be appropriate where the solicitor is appointed as an executor of a will alongside one or more other executors who are not employed by the firm. Options A and E are incorrect because client money can be held in a range of accounts beyond just the general client account (option E) or including separate designated deposit client accounts (option A). For example, a solicitor may act as a signatory on a client’s own account or operate a joint account in certain circumstances (so option C is also incorrect). A firm can also outsource the management of client money to a third-party managed account. Option B is incorrect because firms can have their own client accounts as well as using a third-party managed account(s) at the same time. Money held in a third-party managed account is not deemed to be ‘client money’.
