10 exam-style questions with answers and explanations, straight from our 1,030-question bank. Tap an answer to check yourself. When you're ready, take the scored version in the free practice test.
The CLM exam has 125 questions and runs 4 hours.
These 10 free CLM questions are organized by exam domain, so you can see how each part of the Certified Legal Manager (CLM) blueprint is tested. Reveal the answer and explanation under each question.
A new client pays a law firm a $5,000 advance to cover legal work that has not yet been performed. Under trust accounting rules and the duty to safeguard client funds, where must the firm deposit this money?
Correct answer: B - The client trust account, kept separate from the firm's own funds
A firm administrator wants one metric that shows how much of the dollar value of the time attorneys actually worked is ultimately collected in cash. Which metric best captures this?
Correct answer: A - Realization rate
The managing partner asks for a report showing whether the firm operated at a profit or a loss over the previous quarter. Which financial statement provides this?
Correct answer: C - The income statement
A firm budgeted $40,000 for its annual technology spending but actually spent $47,000. In variance analysis, how is this $7,000 difference classified?
Correct answer: B - An unfavorable variance
Many law firms record revenue only when a client's payment is actually received, rather than when the invoice is issued. This accounting method is known as:
Correct answer: D - Cash-basis accounting
Under a pure contingency fee arrangement, a firm is paid only if the client's matter succeeds. Compared with hourly billing, this arrangement shifts the greatest financial risk onto whom?
Correct answer: C - The law firm, which absorbs its costs if the matter loses
When deciding whether an employee is exempt from overtime under the Fair Labor Standards Act (FLSA), the employer must primarily evaluate:
Correct answer: B - Whether the employee is salaried and performs qualifying exempt duties
Under the federal Family and Medical Leave Act (FMLA), an eligible employee of a covered employer is entitled to how much leave for a qualifying reason within a 12-month period?
Correct answer: A - Up to 12 weeks of unpaid leave
An employee is voluntarily leaving her job and wants to keep her group health insurance temporarily by paying for it herself. Which federal law gives her the right to continue that coverage?
Correct answer: C - The Consolidated Omnibus Budget Reconciliation Act (COBRA)
Under the Americans with Disabilities Act (ADA), when may an employer lawfully require a job applicant to undergo a medical examination?
Correct answer: B - Only after a conditional job offer, if required of everyone entering that role
The CLM exam also covers these domains. Drill them in the full free practice test:
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