We like our banks to deliver what we need when we want it in the way of financial support for our business – just like the bedside piggy-bank we had as children, somewhere to neatly and easily deposit and recover our money where we know we can find it again, but perhaps with a bit more security than the sibling raidable and breakable depository we enjoyed before the advent of Midland Bank’s Griffin Savers. I got a lot of use out of that bag and geometry set.
So it was with some annoyance that our bank rejected our application for a client deposit account after nearly five months of repeated requests which went nowhere.
The reason? Because we are not regulated by the Law Society. Apparently the SRA don’t count.
The word is that these misunderstandings and refusals over client deposit accounts are common place and that practice managers are getting rebuffed by bank officials with nonsensical justifications over decisions to refuse client deposit account applications. It might be that money laundering concerns are at the root of this, or it could be simply a lack of knowledge by banks about client deposit accounts, how they are used and why they are needed.
If its money laundering they are concerned about, I’m fairly sure that the bottom line so far as responsibility goes is with us as law firms – we need to make sure that we follow all procedures under the Money Laundering Regulations and be alert to the potential that the client deposit account could be misused, and inform the our Money Laundering Officer if any transaction appears suspicious or if we have a good reasons to believe any money deposited by a client could be the proceeds of a crime.
If its a lack of commercial knowledge – well there’s no justification for that. With solicitors making an contribution to our economy of over £20 billion a a year (and no doubt with a combined bank balance that is well in excess of that figure) that’s got to be reason enough for banks to get to know a few quirks of the trade.
At the moment our relationship with banks feels a bit like trying to trap a Heffalump – do I use honey or haycorns? How big should I dig my hole? And what is a bank heffalump anyway and where do they hide? As Pooh Bear and Piglet put it:
And have you got any string?”
“No. Why do you want string?”
“To lead them home with.”
“Oh! . . . I think Heffalumps come if you whistle.”
“Some do and some don’t. You never can tell with Heffalumps. Well, good night!”