Top 5 Legal Accounting Software for Modern Law Firms

Winning new clients is easy with professional-looking proposals, estimates, and e-signatures. Grow your law firm with a platform that simplifies document management and your law practice’s accounting. Still unsure as to which of the above software offerings is right for you? It’s no secret that law firm accounting is more difficult and nuanced than the typical money management of other types of businesses.

LexWorkplace is secure cloud storage with sophisticated tools needed by law firms. LexWorkplace allows you to store and manage documents, email and notes by client and matter. These are online document storage systems that are simple, both in terms of ease of use and in terms of features. If your law firm is looking for secure cloud storage, but needs a very light feature set, one of these products might be a good fit within your law firm software toolbox.

Client management

If they have to dig through your personal account to find the odd business transaction, you’re giving them extra unnecessary work and will be charged for it. Do your due diligence and make sure every dollar going into the trust account is supposed to be there. You should only ever charge your clients fees directly related to their account. law firm bookkeeping Just be sure to verify your exact responsibilities with the State Bar Association and/or a professional accountant. You should also consider a savings account, despite interest rates often being low. Having cash in your savings account can improve your chances of being approved for loans and other lines of credit in the future.

• As with any other general ledger package, if you choose to use FreshBooks for your small law office accounting software, you will need to pay close attention to your IOLTA records and reconcile them often.
• Using online legal accounting software will ensure important financial data is processed and tracked correctly, so it’s easier to keep accurate financial records for your firm’s bookkeeping and accounting.
• So whether you own your own law firm or work at one, knowing the basics of accounting is paramount to ensure you follow all ethics and regulatory requirements surrounding money handling and management.
• ORBA’s Law Firm Group has extensive experience in setting up these types of structures and can guide attorneys on how it works.
• Responsible trust account reconciliation is part of keeping accurate financial records, even if the trust account has no balance.
• For that reason, we maintain this comprehensive list of law firm software, the definitive lineup of small law firm legal software.
• Here are five common law firm accounting obstacles and mistakes you should be aware of so you can avoid them.

If you mismanage this account, you could face severe consequences, including disbarment. Law firms are expected to have a separate but essential trust account, typically called an IOLTA. Your business operates as its own entity with its own credit rating. After selecting your bank, you want to open the necessary accounts.

Synced from bank to books

That being said, accounting software for lawyers can accurately keep billing for different matters straight, but it needs to be backed up by a clear billing process. Thankfully, these days, endless files and folders are less common because of advancements in legal technology, including law firm accounting software. Complex bookkeeping and accounting can be handled digitally, freeing up time and saving money by having more efficient processes for handling finances. Boosts Productivity
Relying on spreadsheets and manual data entry tasks are tedious and prone to human error.

• In addition, amounts paid out as compensation, while deductible to the corporation, are subject to federal income tax and payroll taxes.
• CosmoLex includes client management, time, billing, business accounting and trust accounting, eliminating the need for QuickBooks or other accounting software.
• You should also consider a savings account, despite interest rates often being low.
• Then, review your general ledger to better understand your law firm’s financial transactions.

How useful that data will be depends a lot on what capabilities your accounting software supports, how it integrates with your other legal software, and what reporting features it has. Generally speaking, a combined billing, case management and accounting solution will give you the most flexibility since it can utilize a wider variety of data for reporting purposes. Relying on memory is never a good way to keep track of your billable hours.

Client trust accounting

Your checking account is self-explanatory — its primary purpose is managing business revenue. It’s crucial to collect and organize your financial data regularly, not just at the end of the year. In our opinion, this is an oversight, as mismanaging these accounts can lead to serious consequences, even disbarment. With that said, knowing how to manage your money is also a reputation builder. Clients (and employees) talk, and if your finances are in shambles due to negligence, that could spell disaster for your credibility.

And, believe it or not, most lawyers didn’t go to school to learn about bookkeeping and accounting, they went to learn about the law. Incorporating a new legal accounting solution does not necessarily mean you have to throw out what’s already working for you. Great legal accounting software should enhance your existing operations with minimal disruption. Beyond that, integrations give your firm more flexibility to make changes or embrace new technologies without having to tear things down and start from scratch. So when evaluating different options, make sure to find a legal accounting provider that supports integration with your existing software.