In this January 1, 2024 video, the speaker outlines the major trends shaping accounting practice within law firms for the coming year. He reflects on the rapid shift from legacy desktop tools (QuickBooks Desktop, fax, mailed invoices) to cloud‑based solutions, noting Intuit’s decision to stop selling new QuickBooks Desktop licenses and the push toward QuickBooks Online. He predicts that cloud adoption will become universal, despite occasional excuses about internet connectivity. The speaker highlights the growing role of artificial intelligence, showcasing Digits – an AI‑powered reporting platform that can answer natural‑language queries, generate charts, and produce client‑ready presentations. He also discusses improvements in bank‑feed detail, the move toward electronic payment platforms such as Gravity/Confido, and the desire to eliminate handwritten checks. Staffing and payroll challenges are identified, with a call for creative compensation and benefits strategies. Finally, he argues that the legal industry will gradually abandon hourly billing in favor of flat‑fee packages, making practice management more efficient. Throughout, he invites viewers to explore the Accountants Law Lab, a related podcast with Rob Hamilton, and to try Digits (free accounts available).
Chapters
This week we're going to talk about the future of accounting in the legal industry, really the trends, and really talk about embracing the future for 2024. So today, January 1st, happy New Year, it's 2024. Hard to believe we're here already. And I think some of you may know I've written a book called "Modernize Your Law Firm." It's really a book directed to lawyers, so I'm not really specific to this audience, and maybe a book that you might want to give to a client. It should be out very shortly in the beginning of this year. And it actually allowed me to look at— part of the book was the history of where we've come from with accounting. And I won't give you the spoiler alert, but I mean, it will take you through where we started from and how we've gotten to where we are today. Sometimes it feels like technology has gone at lightning speed. It wasn't that many years ago that we were working in QuickBooks Desktop and we had fax machines in our office and That's how we would share documents. And it's really not that long ago. And I started to think about that in respect to the fact that Intuit just recently announced, which I mentioned in the article earlier, announced that they're stopping all sales, new sales of QuickBooks Desktop 2024. They didn't say it was the last year that they're going to make QuickBooks Desktop, but that writing's been on the wall for a bit of time because they really haven't made a lot of changes to the product. And you can see where their investment is really truly in QuickBooks Online. So with today's cloud-based technology and software, it's really the way to move forward with your clients to automate a lot of the workflow that we do today. And it's an excellent opportunity for us to transition our clients there. We have an industry when you work with attorneys, it's an industry that is ripe for change. We still have law firms that mail out their invoices, their monthly billing. Hard to believe. And it really wasn't that long ago that we would print everything out, fold it up in an envelope, envelope, and put a stamp on it and mail it out with the US Postal Service. And really today, I think I have a couple of clients that still do that in their office. Why? I don't know. Why not just email it? But they have had this process forever and they're still back in the old days when they probably still have fax machines. They probably still use them in their office. So those are very backwards. Looking firms, and you'll find that a lot of times those firms may have a shift in partnership at some point where somebody younger will come in and become a junior partner and will want to investigate moving the firm forward with some change to some more modern-day technology. And it's where we can come in. So if you start to think of it that way, you'll probably look at it as the future trend is really everything moving to the cloud, and we're gonna abandon all the desktop software, which I say hallelujah. I'm tired of hearing the excuses of my internet doesn't work very well and I really can't be in the cloud. And I'm sure that's the case for some people in the United States, but I think that's really less people than, you know, today in today's world. Most of us— I think it's funny when I see somebody go online and post that when they're obviously online and Facebook posting that, that's that topic. It's like, well, you're online now. So if you're online able to post into Facebook, you should be able to get onto the internet. You are on the internet when you're making the post. So it's kind of ironic. But if I had a crystal ball, I would say that when it comes to AI and artificial intelligence, we're going to see that it will increasingly be a feature in our everyday tools. So you're going to see it start to pop up in a lot of the tools if you haven't already seen it. My best example is Digits, the software for Reporting and how that software is really cool and how it actually has the ability— you can ask it questions and really talk to it, and the client can talk to it, and we can communicate with it. And it's got a beautiful interface. It's just gorgeous. Looks very futuristic. It's a, it's a software you don't mind hanging out in. And I'll take you there in a second into my own files. You can, you can see how the AI is starting to be developed and worked. I think they're probably one one of the leaders. Intuit is also a leader with AI. I know they've purchased a few companies and they're trying to really incorporate it in their software. It's been there for a while. You can see that with bank feeds. So those bank feeds, if you remember how exciting it was to get into the bank feeds in online, and they've only gotten better because sometimes a little bit of disappointment, disappointment, like I'll say, what is, is the, is the system thinking? It wants to remember the last transaction, and if it says check, it'll come up with some crazy things. And I always have to tell the client, when you're looking at that, understand that it's remembering the last, last thing that was put in there because it just can read check and it doesn't know what to call the check because there's really no details behind it. I'm hoping to see with bank feeds that we're going to see more banks connecting in a way like TD Bank does, where you'll actually have all those details right at your fingertips in the bank feed. You'll be able to pull up a check right out of the bank feed and see what was written. Hopefully your clients aren't handwriting checks. I'd like to see that go away in the future. You'll be able to pull up a deposit and see the checks that were deposited. If, if that's how your client works, hopefully they're doing things like Gravity and Confido, actually Confido Legal, which is the old Gravity Legal. And that's a way to pay electronically. It's so much more secure than writing a check and paying with a check. So that's some of the things I'd like to see, or I think we're gonna see down, down in maybe even into '24. You'll see a lot more of that. In our, in our tools. I think you're going to see some really cool developments in QuickBooks Online, that you're gonna see some advancements there with the technology getting better and better. I know there's new reports, there's a lot of drama around the new reporting that it's not working very well, but remember it's new and they kind of force it on you and beta test you while you're in there. I've been flipping back to, from the modern view to the old standard view because I like the cleaner look to it. But there's a lot of benefit inside Modern View. And I think I will do a post maybe in a, maybe in a month or so when it's gotten a little bit better and they've gotten some of the bugs out of it. Right now I don't really even trust the data when it comes being pulled into the system. And it's hard to read. So that was the other problem. I think another area you're gonna see with our clients is some of the challenges that they have with staffing. And I think even staffing our own accounting firms, it's hard to find good people. So I think you're going to see some creative ways around payroll benefits that will really highlight a better way of paying client— paying your employees and staff, and also a better way of— really a better way of caring about your, your team. And I think that's what you're going to see more of, and a little bit more detail in the article about that as well. I think you're gonna see a, a bit of people, especially attorneys. I think accountants have been pretty much forward-thinking here with not hourly billing anymore. We've really moved the needle on that. But attorneys still do a lot of that. Maybe you'll see a little bit less of that, and I think the more forward-thinking attorneys are gonna maybe bundle up packages that is a flat— that are flat fees. I think that is a wave of the future that I'd love to see. I think it's a lot easier to manage and not have to track all those details, which is very time-consuming, tracking all the, all the hours that are worked and then writing them down and all of that. So I think that's some of the things you're gonna see down the pike in 2024, maybe even later in the year. You're gonna see more, more fanciness to some of these things and a little bit more integration with AI that will help us save time and really move the needle. So let me dive into Digit so I can show you what that looks like, because it's such a fascinating product. And if you haven't looked at it, you get 5 free accounts. Accounts with one email. So you really should try it because it is free right now. Let me share my screen and I'll give you a little peek under the hood. So as you can see here, you can ask Digit any question that you want to ask it, and you can see it gives you charts. You can see that it even gives you some questions you could actually ask it, like, what did we pay Breeze Airlines over the last 6 months? What's my current ratio? What's the difference between my credit and my debt? So I can come over here and just click the button. It's gonna answer that question. That's current assets versus current liabilities. And it's only gonna show me this last month, and it gives me a, a, a figure. So you can ask it a lot of questions. There's categories here. You can actually look at the categories, expenses by categories. Like I said, it's really pretty interface. You know, one of my vendor transactions, I had a lot of vendor expenses. You can see that some of these things went up, you know, where my bills are, and it even gives you like They've even got the logos for some of these companies. So it's pretty interesting software where you can really look at things. You can look at the transactions and see what the transactions are. So as you can see, it's a pretty cool interface. It gives you a look to— and I won't click revenue, so I can't really show that, but you can see the look and how pretty it is. And if I wanted to know like what was my expense here? Well, that was UnitedHealthcare and Intuit QuickBooks was expensive for me and US Bank is expensive for me and analytics is expensive. So you can see the different color tones in here and the overview. And then you can ask any question you want in here and you're actually talking to the AI that's inside of Digits, which what's really cool about the AI is that it truly is really fast, really forward. It actually does the math properly, which ChatGPT doesn't. You can do some analysis, analysis, analysis of the records. You can show— Yeah. Your expenses over time. You can show categories highlights. Trying to see— then it does make some pretty reports, so I can create a report here, and it makes a beautiful presentation for your clients. So in a nutshell, it's very cool software, and it really is something that's futuristic looking, especially since that's just the accountant side. The side that the client has is even prettier than the side I just showed you. As you know, as the client can see what they can see, if you invite them into the software, you can ask them questions. And because the software is so slick looking, they don't mind being in it, and it's an opportunity for them to play with the, with the artificial intelligence as well, ask it questions. You don't have to answer all those questions, and I think it just gives you a great way to communicate with your client and give them a beautiful presentation and a tool that they can use going forward. And it's really the way the future's gonna be where they're able to hop into the software. We keep them outta QuickBooks, so win-win for us, and it really makes it special for the client. I hope that's helpful. If you wanna learn more about this stuff, join us at the Accountants Law Lab. We also had a podcast with Rob Hamilton and Digit, so I'll, I have a link to that in the article as well. So if you wanna read on more, read the article that comes with this video, and I'll see you all next week. Don't forget to hit the subscribe button. Bye now.
