Law Society of Ontario (LSO) Paralegal Practice Exam 2025 - Free Paralegal Practice Questions and Study Guide

Paralegals are required to follow strict rules regarding the handling, accounting for, and reporting of client funds held in trust. This is crucial because client funds are not the property of the paralegal; they are held in trust for the benefit of the client. The Law Society of Ontario has established specific regulations to ensure that such funds are managed properly, which includes maintaining accurate records, ensuring proper security measures, and providing transparency to clients regarding their funds.

Trust accounting rules mandate that paralegals keep detailed records of all transactions involving client funds, including deposits and withdrawals. This is to ensure that clients can clearly see how their funds are being used and to maintain public trust in the legal profession. Any deviations from these strict accounting practices can lead to disciplinary actions, so adherence to these guidelines is essential for maintaining professional standards and protecting client interests.

The other options present actions that are inconsistent with ethical practices. For instance, using client funds at one's discretion or keeping them in a personal account undermines the fiduciary responsibility that paralegals have towards their clients and can lead to serious legal consequences.