What happens if a law firm has to return funds when more than $7,500 cash had been received for fees and disbursements?
If you are returning more than $1,000 on a cash receipt of more than $7,500, the refund has to be returned to the client by way of cash. This puts the client in the same position vis a vis cash holdings as when he or she came to the law firm. The law firm should write a cheque payable to the financial institution to obtain the necessary amount of cash to make the refund. The person/client receiving the cash refund must sign a receipt acknowledging that the cash was paid by the law firm.
