100+ Free ALA CLM Practice Questions

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Question 1

Score: 0/0

When a partner reports a possible misappropriation from the trust account by a long-term staff member, the administrator should:

Immediately confront the employee in front of others

Activate a documented internal investigation plan, preserve records, restrict trust-account access, consult outside counsel and the carrier, and notify the state bar and clients as required by Rule 1.15 and state breach/discipline rules

Ignore unless the partner files a formal complaint

Pay the missing amount from the operating account and continue normal operations

to track

2026 Statistics

Key Facts: ALA CLM Exam

125 items

Total Questions (100 scored + 25 pilot)

ALA Certification page

4 hours

Time Limit

ALA Application Packet

$550 / $675

Member / Non-Member Fee

ALA Application Requirements

3 years

Experience Requirement

ALA Application Requirements

36 hours / 3 yrs

Recertification CE

ALA Recertification Guidelines

31 percent

Largest Domain (HR / Talent)

ALA CLM Body of Knowledge 2026

29 percent

Financial Management Weight

ALA CLM Body of Knowledge 2026

2x / year

Testing Windows (May, Nov)

ALA Certification page

The ALA CLM is a 4-hour, 125-item computer-based exam delivered at Pearson VUE (coordinated by HumRRO). Of the 125 items, 100 are scored and 25 are unscored pilot questions. The blueprint weights are Financial Management 29 percent, Human Resources/Talent Management 31 percent, Operations Management 23 percent, and Legal Industry/Business Management 17 percent, with deep coverage of trust accounting under ABA Model Rule 1.15, federal employment law (FLSA, Title VII, ADA, FMLA, ADEA, PWFA, USERRA), cybersecurity (ABA Op 477R/483), e-discovery (FRCP 37(e), EDRM, TAR), ethics (Model Rules 1.1, 1.5-1.10, 1.15-1.17, 5.1-5.5, 7.1-7.5), and generative AI in law (ABA Op 512). The exam fee is $550 for ALA members and $675 for non-members; retakes are $275. Candidates must have three full-time years of legal-management experience plus 10 hours of recent management coursework with at least 2 hours in each of the 5 Management Skill Categories. The CLM is maintained by completing 36 hours of qualifying continuing education every 3 years, including required hours of ethics and substance-abuse content. Testing windows for 2026 are May 4-29 and November 2-27.

Sample ALA CLM Practice Questions

Try these sample questions to test your ALA CLM exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under ABA Model Rule 1.15, a law firm receiving a $25,000 settlement check payable to the firm in trust for a client must do which of the following FIRST?

A.Endorse and immediately deposit the entire check into the firm's operating account, then issue a partial disbursement to the client

B.Deposit the entire check into the IOLTA or client trust account and issue disbursements only after the deposit clears

C.Hold the check uncashed until the client signs a release authorizing disbursement

D.Cash the check and pay the client and firm fees in cash to avoid bank float

Explanation: ABA Model Rule 1.15(a)-(c) and every state analog require that funds belonging in whole or in part to clients or third parties be deposited into a clearly identified trust account separate from firm operating funds. Earned fees and client share are disbursed only after the deposit has cleared the bank. Commingling settlement proceeds with operating funds is a textbook trust-account violation and a leading cause of bar discipline.

2A firm has standard fees of $1,000,000 billed and collects $820,000. Worked time at standard rates was $1,250,000. What is the firm's collection realization rate?

A.65.6 percent

B.80.0 percent

C.82.0 percent

D.152.4 percent

Explanation: Collection (or cash) realization is cash collected divided by standard fees billed: 820,000 / 1,000,000 = 82.0 percent. Billing realization compares billed to worked time (1,000,000 / 1,250,000 = 80 percent), and overall realization is collected over worked (820,000 / 1,250,000 = 65.6 percent). CLMs must distinguish billing realization, collection realization, and overall realization when reporting to partners.

3Which compensation system distributes partner profits primarily based on each partner's individual origination, billing, and collection metrics?

A.Pure lockstep based on seniority

B.Modified Hale and Dorr formula weighting team contribution

C.Eat-what-you-kill formula based on individual production

D.Equal partnership shares regardless of performance

Explanation: Eat-what-you-kill (EWYK) compensation directly ties partner draws and bonuses to individual originations, working attorney receipts, and collections. Pure lockstep rewards seniority, the Hale and Dorr / Cravath modified systems balance objective metrics with subjective committee judgment, and equal-share systems ignore production. The CLM Body of Knowledge expects familiarity with all four prototypes when advising the compensation committee.

4In a three-way reconciliation of an IOLTA account, which three balances must agree at each reconciliation date?

A.Bank statement balance, firm general ledger trust balance, and aggregate client subsidiary ledger balances

B.Bank statement balance, operating account balance, and unbilled WIP balance

C.Trust balance, accounts receivable balance, and accounts payable balance

D.Bank statement balance, partner capital balance, and IOLTA interest remitted to the state bar

Explanation: State trust-accounting rules require monthly three-way reconciliation: the adjusted bank statement balance, the firm's general ledger trust control account, and the sum of all client subsidiary ledgers must equal one another. A discrepancy on any leg signals commingling, posting error, or misappropriation, and most state bars require remediation and documentation before the next reporting period.

5A litigation partner negotiates a flat fee of $250,000 for a defined matter regardless of hours worked. This pricing approach is BEST classified as which alternative fee arrangement?

A.Hourly billing with a soft cap

B.Fixed (flat) fee

C.Contingency fee

D.Hold-back retainer

Explanation: A fixed or flat-fee arrangement charges a defined total for a defined scope, transferring time-overrun risk from client to firm. Hourly with a cap still bills time. Contingency depends on outcome (typical in plaintiff personal injury). A hold-back retainer is a credit balance to secure future fees. Fixed fees require disciplined scope definition and matter-level profitability tracking for the firm to avoid losses.

6Profit Per Equity Partner (PPEP) at AmLaw-style firms is most directly calculated as:

A.Gross revenue divided by total lawyers

B.Net operating income divided by the number of equity partners

C.Total billable hours divided by the number of equity partners

D.Gross revenue minus salaries, divided by associate count

Explanation: PPEP equals net operating income (revenue less operating expenses, before partner compensation) divided by the number of equity partners. Industry trackers such as The American Lawyer use this exact formula. Revenue Per Lawyer (RPL) divides gross revenue by total lawyers; the two metrics together describe firm size and leverage.

7Zero-based budgeting differs from incremental budgeting because it:

A.Starts each cycle from the prior year and adds an inflation factor

B.Requires every expense to be justified from a zero baseline each cycle

C.Caps total expenses at the prior year's actuals

D.Eliminates capital expenditures from the operating budget

Explanation: Zero-based budgeting (ZBB) forces every cost center to justify its budget from zero, exposing legacy spend and forcing prioritization. Incremental budgeting starts with prior actuals and adjusts up or down by a small percentage. ZBB is harder to administer but more effective when a firm needs to compress overhead or fund new investments such as legal technology.

8A general partner in a U.S. law firm partnership receives which federal tax document reporting that partner's share of partnership income?

A.Form W-2

B.Form 1099-MISC

C.Schedule K-1 (Form 1065)

D.Form 1098

Explanation: U.S. law firm partnerships (including LLPs) file Form 1065 and issue each partner a Schedule K-1 reporting that partner's distributive share of income, deductions, and credits. K-1 income flows to the partner's individual Form 1040. Partners are not employees, so they do not receive a W-2 for their partnership earnings, and guaranteed payments are reported on the K-1 rather than 1099-MISC.

9A 75-attorney firm finds that 18 percent of work-in-process is more than 120 days old. The MOST direct internal control improvement for an administrator is to:

A.Switch all clients to flat-fee billing

B.Implement enforced monthly billing cycles with partner WIP aging reviews

C.Move from cash to accrual accounting for tax purposes

D.Eliminate the trust account to reduce reconciliation work

Explanation: Aged WIP usually reflects delayed billing rather than client unwillingness to pay. Enforced monthly billing cycles, billing partner accountability, and aging dashboards turn stale WIP into invoices and then into cash. Changing fee structure or accounting method does not directly remediate billing discipline, and trust-account elimination would create severe ethical exposure.

10Cost accounting in a law firm is BEST described as:

A.Allocating overhead and indirect expenses to timekeepers, practice groups, or matters to measure profitability

B.Recording cash receipts and disbursements only when received

C.Issuing K-1s to partners at year-end

D.Capitalizing all software purchases as fixed assets

Explanation: Cost accounting allocates indirect overhead (rent, occupancy, IT, library, support staff) to lawyers, practice groups, clients, or matters so the firm can compute true profitability and inform pricing on alternative fee arrangements. Cash recording is a method choice, K-1 issuance is partnership tax, and software capitalization is a fixed-asset question, not the definition of cost accounting.

About the ALA CLM Exam

The ALA Certified Legal Manager (CLM) credential is the leading certification for legal management professionals running law firms and corporate legal departments. The computer-based Pearson VUE exam tests 125 items across Financial Management, Human Resources/Talent Management, Operations Management, and Legal Industry/Business Management within a 4-hour window. Candidates must already meet ALA's 3-year experience and management-coursework eligibility before sitting.

Questions

125 scored questions

Time Limit

4 hours

Passing Score

Angoff-method criterion-referenced cut score (not publicly fixed)

Exam Fee

$550 ALA member / $675 non-member (Pearson VUE for the Association of Legal Administrators (coordinated with HumRRO))

ALA CLM Exam Content Outline

29 percent

Financial Management

General accounting, trust accounting (IOLTA, three-way reconciliation), realization rates, budgeting, alternative fee arrangements, partner compensation, profitability metrics.

31 percent

Human Resources / Talent Management

Employee selection and promotion, performance management and compensation, federal employment law, harassment training, organizational development.

23 percent

Operations Management

Facilities, technology, cybersecurity, information governance, e-discovery, records retention, procurement, workplace safety.

17 percent

Legal Industry / Business Management

ABA Model Rules, marketing and business development, strategic planning, mergers and laterals, legal project management, generative AI in law.

How to Pass the ALA CLM Exam

What You Need to Know

Passing score: Angoff-method criterion-referenced cut score (not publicly fixed)
Exam length: 125 questions
Time limit: 4 hours
Exam fee: $550 ALA member / $675 non-member

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

ALA CLM Study Tips from Top Performers

1Map your study schedule to the official Body of Knowledge weights: 31 percent HR/Talent, 29 percent Financial, 23 percent Operations, 17 percent Legal Industry/Business Management.

2Master ABA Model Rule 1.15 trust accounting, IOLTA pooled-interest rules, and three-way reconciliation cold - these are heavily tested.

3Memorize key federal employment law thresholds: FMLA 50/75-mile rule, ADEA age 40, WARN 60-day notice, FLSA attorney exemption under 29 CFR 541.304, PWFA accommodation duty.

4Read ABA Formal Opinions 477R (cybersecurity), 483 (data-breach response), and 512 (GenAI) before sitting; CLM questions cite these directly.

5Practice realization-rate math by hand: billing realization, collection realization, and overall realization (collected over worked). Know which is which.

6Build a vocabulary list of legal-industry acronyms (PPEP, RPL, OCG, RFP, ALSP, LPM, CLOC, EDRM, TAR, BEC, MFA, SOC 2, IOLTA, K-1) before timed practice.

7Run at least three 100-question timed sets back to back to simulate the 4-hour endurance demand.

8If a question references a Model Rule by number, anchor your answer to the rule's exact language; CLM distractors often shift words slightly to trap test-takers.

Frequently Asked Questions

What is the ALA CLM credential?

The Certified Legal Manager (CLM) credential is the leading certification for legal management professionals, awarded by the Association of Legal Administrators. It signals mastery of financial, HR, operations, legal industry, and ethics topics required to run a law firm or legal department.

How long is the CLM exam?

The CLM exam runs 4 hours and contains 125 items: 100 scored questions plus 25 unscored pilot items that ALA uses to evaluate future content. It is delivered at Pearson VUE test centers under HumRRO coordination.

How is the CLM scored?

ALA uses a modified Angoff criterion-referenced standard-setting process to determine the passing score. The Association does not publish a fixed percentage; candidates receive a pass or fail result with diagnostic feedback on weaker domains.

What does the CLM exam cost in 2026?

The CLM exam fee is $550 for ALA members and $675 for non-members. Retakes are $275. Additional costs include eligibility coursework and study materials.

Who is eligible to sit for the CLM?

Candidates must have three full-time years of exempt legal-management experience as a principal administrator, branch office manager, or functional specialist, plus 10 hours of recent management coursework with at least 2 hours in each of the 5 Management Skill Categories. Functional specialists need an extra 15 hours outside their primary specialization.

What are the CLM Body of Knowledge weights for 2026?

The current ALA blueprint is Financial Management 29 percent, Human Resources/Talent Management 31 percent, Operations Management 23 percent, and Legal Industry/Business Management 17 percent. Sub-weights cover general accounting (14 percent), financial information and analysis (15 percent), performance management and compensation (13 percent), organizational development (13 percent), and others.

When are the CLM testing windows?

ALA offers two testing windows each year. In 2026 the windows are May 4-29 and November 2-27. Candidates schedule their seat at a Pearson VUE test center within the open window after ALA approves the application.

How do CLMs recertify?

CLMs recertify every three years by completing 36 hours of qualifying continuing professional education during the prior cycle, including required minimum hours in specified subject categories and at least 1 hour each of ethics and substance abuse content.

How long should I study for the CLM?

Most candidates study 120 to 200 hours over 4 to 6 months. Focus weights on Human Resources/Talent (31 percent), Financial Management (29 percent), and Operations (23 percent) before Legal Industry/Business Management (17 percent), and use timed practice sets to build endurance for the 4-hour exam.

Does the CLM cover generative AI?

Yes. Recent CLM content reflects ABA Formal Opinion 512 (2024) on generative AI ethics, the duty of technology competence under Model Rule 1.1 Comment 8, and high-profile cases such as Mata v. Avianca, which establish lawyer responsibility for verifying AI outputs and protecting client confidentiality.