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Primary Factors that Lawyers should consider for their smooth accounting

accountant for lawyers

Lawyers have a lot to do in and out of a court. They may present a client or advertising their services round the clock. Their service type is such they are doing many jobs, simultaneously.

You may have seen lawyers engaged in improving their networking, managing multiple legal issues, and other state law updates. In such a busy schedule, they also try their book-keeping. This is where lawyers find themselves short on time and expertise to do accounting fluently.

So they source out their book-keeping to professional chartered accountants or accountancy firms. They expect the accountant for lawyers to take care of their money in every aspect from billing to the recovery of their fees and everything in between.

Lawyer’s daily practice involves a great deal of dealing with Federal and State laws. So their financial obligations, receivables, and pay-outs involve many segments. Like Government departments, clients, cash flow, bank reconciliation and finally dealing with the tax department.

Before everything else, there are four (4) primary factors of accounting for lawyers which they need to look into prior to outsourcing.

Let’s try to figure out what are those four factors that a law firm should look into prior to improving their accounting functions.


Integrated Software, for a better billing system: Lawyers Accounting


Most law firms operate on general-purpose accounting systems. The output reports may need to be customized every time. Mostly their systems are not automated; neither integrated to keep records of the multiple accounts. For example, they may receive settlement money, which they cannot use unless it’s earned. Such entry needs to be tracked through manual systems.

Likewise, there are chances for fraud and errors by entering data twice. They may identify this during an audit, which is usually at the year-end.

Upgrading the software where automation and integration are the primary focus, can remove this issue. The accountant for lawyers can use upgraded software to show the client’s checks and trust expenses in the same system. The firm will have a ready and updated financial status, every day.

Must know Source of Revenues

Law firms deal in different areas of litigation and have different attorneys for certain areas. This brings decent revenue, but it may become hard to find which aspect of their firm generated more revenues. With a general-purpose accounting system, it becomes a hard task to track it on case type. This is another factor where law firms are struggling to keep a record.

Therefore, an automated and integrated system in place will track all such information. Engaging an accountant for lawyers can resolve this issue, as they can suggest its customization for better results. This will enable the firm to use its resources more efficiently.

accountant for lawyers

Engaging Bookkeeper or Outsourcing


This is another factor that law firms should consider. Professional accountants come at high prices; usually law firm is not much interested in them.

So, mostly they hire a tax attorney at the end of the year. This is to meet deadlines for taxation, tax returns, and payment. Some law firms engage a part-time accountant to keep their records updated. Both situations serve no good for a law firm, in the long run.

That’s where an accountant for lawyers becomes very useful. Hiring a full-time accountant may be expensive than outsourcing their accounts. The outsourced accounting firm will put their best professional chartered accountants for the job. This will offset many accounting pain points for a law firm.

The workload fiasco


Most law firms don’t have full-time accountants, for the very simple reason; initially, they don’t have a budget allocation for such appointments. Initially, law firms are interested in reducing the costs. Instead, they will appoint a person out of their managerial or administrative staff to look after the accounts.

This puts an extra burden on the allocated person for accounts. Sooner, the person juggling between his original tasks and accounting will start giving reduced productivity. The worst situation will come when deadlines miss and stress creeps in, for management and the employee.

This can further compound the situation when transactions give an error. This is a miserable pain point as there’s no professional around to cross-check the mistake and rectify it.


This factor encourages the need for hiring an accountant for lawyers.


These four primary factors pose major challenges to lawyers but they can opt for a permanent accountant or outsource a firm for book-keeping. In either case, the aim is to reduce the pains of a law firm regardless the firm is new or a few years old.

Therefore, in order to avoid all such issues, a law firm should opt for outsourcing their accountancy jobs. The contracted company will line up their best professionals for serving a law firm. That’s what you may call an accountant for lawyers who will endeavor everything to keep things simple for the lawyer’s office.