Law Firms

Accounting for Law Firms

A law practice is both a business and a professional obligation. You need healthy finances and, at the same time, careful treatment of money that does not belong to the firm. We work with solo practitioners and small firms to keep both in order.

Client trust accounts

Funds held for clients, often in an IOLTA or other trust account, must be kept apart from the firm's operating money. Good records generally show each client's balance, every deposit and disbursement, and regular reconciliation of the bank statement to the books and to the individual client ledgers.

We can help set up bookkeeping for trust activity that is clear, consistent and easy to review. The rules for trust accounts come from the State Bar and your professional obligations, so we work alongside you and follow what those rules require. We do not replace your own judgment or guidance from the Bar on legal ethics.

Running the firm

• Bookkeeping. Recording fees, costs advanced for clients, and overhead. See our bookkeeping services.
• Partner and owner compensation. Planning draws, distributions and salaries sensibly.
• Payroll. Staff, associates and paralegals through our payroll service.
• Financial statements. Reports that show profitability by period and, where useful, by type of work.
• Tax planning. Estimated payments, retirement contributions and entity structure. Visit tax planning.

Contingency and uneven income

Fees that arrive in large, unpredictable amounts make cash planning harder. We can help you forecast, set aside money for taxes and smooth out the lean stretches.

QuickBooks for legal practices

If your firm uses QuickBooks, a tune-up can confirm that operating and trust activity are recorded separately and that reconciliations are current.

Starting or growing a practice

Opening a new practice or adding a partner raises questions about structure, compensation and recordkeeping. See new business formation and we can talk through your plans.