Why Choose Us

Specialized Law Firm Bookkeeping 

✔ Familiar with State Bar trust accounting requirements

Our familiarity with Rule 1.15 governing client trust accounts and related jurisdictional requirements allows us to structure your books in a way that helps avoid common accounting errors and supports proper compliance. 

✔ Performs monthly three-way trust reconciliations

We perform detailed monthly three-way IOLTA reconciliations by matching the bank statement balance, the trust ledger balance, and the total of all individual client ledgers to ensure client funds remain properly separated. 

✔ Properly tracks advanced client costs as assets

Advanced client costs, including filing fees and expert witness expenses, are recorded as firm assets until they are reimbursed or settled. This helps ensure your financial records reflect the firm’s true profitability and assets. 

✔ Records retainers and fee advances correctly

We properly classify and monitor client retainers and fee advances as client liabilities on the balance sheet until the fees are earned and transferred. This approach helps ensure proper trust accounting and supports compliance with Rule 1.15. 

✔ Supports contingency fee accounting structures

We specialize in establishing the appropriate accounting structure for contingency fee practices, ensuring that large settlements and firm expense recoveries are properly recorded and allocated to help avoid unexpected tax consequences.  

Traditional Bookkeeping 

• Focuses primarily on basic income and expense tracking for general businesses 

General bookkeeping services are often designed for standard business accounting and may not include the specialized trust accounting procedures required by law firms. Legal practices have additional financial recordkeeping considerations, including client trust accounts, individual client ledgers, and settlement-related transactions. 

• Often performs only simple bank reconciliations

Traditional bookkeeping relies on a basic reconciliation. However, most State Bar requirements call for a more thorough three-way reconciliation of bank balance, the book balance, and individual client ledgers to ensure all client funds are accurately accounted for. 

• May treat advanced client costs as expenses

In many standard bookkeeping approaches, advanced client costs may be treated as operating expenses, which can affect the accuracy of the firm’s profit and loss statement which can distort financial reports by lowering the firm’s reported income.  

• Retainers may be recorded as income too early

Standard bookkeeping practices, settlement deposits and client retainers may be recorded as income on the profit and loss statement, potentially resulting in revenue being recognized too early. 

• Limited experience with legal trust accounting 

Under a typical bookkeeping setup, QuickBooks Online may not be configured to accurately manage the receipt of settlement funds and the subsequent disbursement transactions associated with those settlements.