A Guide to Legal Accounting Software

Welcome to Accountants Law Pod, where accounting professionals and law firms converge. Hosted by Lynda Artesani, Sarah Prevost, and Stephen Libhart.

Hello everybody, and welcome back to the Accountants Law Pod. We're so glad you're here today. And Sarah, how are you?

Oh, I'm doing well. It's a bit hot today in, in our neck of the woods, but overall good. How about you?

It's summertime and there's a full moon. We were talking about the full moon before we came on air here. All these weird things happening. And you know what? We miss Lynda today because Lynda's traveling. And, but Lynda, when you see this, just know that we miss you.

Exactly.

Because I know she would have lots of things to say about today's subject, which is law firm billing software. You know, what is legal accounting software and why does it matter? Ooh, that's a loaded one. That's a loaded one.

That's a loaded one. Why does it matter? Where do you— how do you pick? What do you— Yeah, it's so many. It's huge variety out there that we see.

It's totally a huge variety. And to your point, I sat down and made up a list. I went out online and of course I went to ChatGPT and I went all over and all the different years combined that we have together, probably 8 million years of serving law firms between the three of us. And you know, I came up with a list of 16. And so I'm going to read down that list and I'm going to read about, I'm going to read across things to consider in the software, and that's not the end-all list that we're going to give you today. So if we miss your software, please forgive us because this is just—

We don't know you. You might need to reach out to us and let us see the product and understand it because we'll give our approved list. And I think we might want to start doing that going forward because we would know the product. There are probably items on there and I could tell you why I'm not happy with them. But let's see what happens.

Yeah, let's, no, let's do that. Because, you know, this is just, we're just skimming the surface on this today. But, you know, let's talk about things to consider first.

Okay.

Okay.

You know, does the software do these following things? Does it do trust and IOLTA management? Does it handle the three-way reconciliation? Does it make it easy for you to reconcile between your accounting software, you know, does it interface with it? Does it do leads billing? Oh my gosh, that's a huge one. So many people overlook that and all of a sudden then they're doing some work for the government and the government says, I want the bill in leads. And they're like, oh, what's that? Evergreens and retainers.

Oh, what's that?

What's that? Yeah. QuickBooks and Xero integration. You know, in-app accounting. I think about some of the softwares where we see a commercial on TV and they're like, you know, you know, I'm going to make fun out of this because it's a full moon. But, you know, they'll show somebody parachuting out of an airplane holding their phone and saying, you can do your own accounting on this app. And it's like, oh, no, you can't.

Danny DeVito said you can do inventory in QuickBooks.

Exactly.

What? No.

Does it have a built-in payment platform? You know, can— once you bill your client and you send them, an email of the bill or PDF, whatever you want to call it, and they get it, can they click on a link and pay the bill right away? Oh my gosh, make it easy for them. Does it do that?

Or if it's not one that you like, do you have the ability to use something different?

And what is that something different?

And what is that something different?

And that's what we're here for. So to your point, you know, our preferred list, you know, working on that. So I'm going to read off 16 different vendors. Again, this is not all inclusive. There are— Lynda has said this many times. There are hundreds of different ones out there.

Yeah.

You know?

Yeah. And not everyone, and she said this before, you can't be all, you know, experts in all of them.

You can't.

You can be in a few of them, but there's reasons why certain ones bubble to the top and where they're going. And innovation, I feel like, this list is probably not in any succinct order. It's not. So it's not rating them. It's just a list. So I think that's clarifying. And it's also, you know, we could go through and highlight little differences of why, what we look for or what we are thinking about or any comment.

Absolutely.

Okay, cool. All right.

That's good. So of course there's Clio and it's the, you know, Clio has different portals and this is the Clio Manage portal that you would be using. MyCase, Practice Panther, Cosmolex, Carrot Legal spelled C-A-R-R-E-T, Rocket Matter. Smokeball, TimeSolve, LeanLaw, Tabs3, PC Law, Sage Timeslips, ActionStep, Lidify, Elite3E, and Adherent Expert. Now I tried to get a mix of some that you've heard of and some that you probably have never heard of just to make this list of 16 that I came up with. And one thing I want to throw out right away to your point that you just made is Sage Timeslips. Mm-hmm. And, you know, I started out on Sage Timeslips, and I, I don't use it with anybody now, but I want to say something about Sage. If you're one of those law firms that is still on a server/desktop environment, and there's lots of you out there, there's a lot of Sage users that are still out there, and it's, it's one that is interesting to take a look at if you're going to stick in that environment and or not going to stick in that environment, how do you— for those of you that use it, how do you migrate out of that into one of the other ones? So anyway, that's the list and those are the features that I kind of came up with.

One that came to mind that I've worked into is bill for time.

Bill for time.

Yeah, so that's one. So interesting, there's more obviously that we know of that we've touched, migrated from. I think the biggest, the biggest thing that happens is the recommendations come from a colleague, from an individual, maybe a staff member inside the firm that recommends it, and it may not be suitable for the firm. Or there's the other part, and Steve, I, you can totally agree or disagree or say something different, but there's also the part of, are you ready to adopt a software change and are you ready to adopt and understand what that movement looks like.

And that's more than a yes and no answer.

Yes.

You know what? You need to really sit down and think this through. To your point, Sarah, don't call your friend the attorney down the street.

Yeah.

And say, what are you using? And, and oh, that sounds great. Boom, that's what I want. Really need to investigate, you know, your— what type of law firm do you have? What is your practice area or areas? What do you want out of the software? So many people just buy them something and put it in and pray and say, well, you know, somebody on the staff will deal with this. And then they get all upset because they're not getting the type of reports that they need to run the business side of the law firm. And yeah, there's so many things that go into making that decision. And you need to talk to your staff, talk to your, your CPA/tax preparer, talk to your bookkeeping accounting firm and get all those pieces put together before you jump into a A platform.

I'll say tax CPA, no, they're not the ones. The people that are doing the heavy lift, which is people like ourselves.

I agree with that, yeah, yeah, yeah.

I mean, as long as it produces the proper financial reports based on your entity structure, there you go.

And to support what I was saying about the CPA, just to find out, make sure you're really immersed in what they do for you Yeah, yeah. On a high level, if you will. And that's going to answer some questions for you.

Okay, so Steve, here's what I see and I want to ask you. I'll just name this one because it's the one I find that's silly in my opinion. A lot of law firms use Harvest time tracking and trying to make it legal. Please no. Yeah, okay.

Please no. No, no, no, no.

It's not meant for legal in that way.

No, not at all. Not at all. It's just, it's a very very, very, very basic program. It serves its purpose for very, very, very basic types of businesses and it tries to appeal to so many different industries and it's, it's not legal.

Please don't do that. So here's my next question. What are, what are your thoughts on all-in-ones versus, uh, you know, a nice ecosystem of different platforms working together?

Define what you're calling all-in-ones then.

Well, CosmoLex is an all-in-one product. It's got accounting, it's got everything in it, CRM all the way through.

No.

Um, no, because I could tell you why. There are things about CosmoLex that I'm unhappy about and things I like. I mean, I will— I have things that I—

Every software is that way. I love it when I, when I jump into some law firm that we're just starting out with and they've got, oh, we've got this whatever it is, and you get in there and you're like, oh, there's that report, I like that. Okay, I like that. And then you get deeper into it and it's like, no, no, no, no, no. So there again, what do you want it to do?

Let's be honest, it's only as good as what you put into it too.

Exactly.

As good as you put the data into it and the way, I mean, we're going through a practice management change ourselves and it's the same thing. It's only as much as you put, it's only as good as what you're, it's the outcome. And you brought this up. Okay, so I was curious how your feelings are because The one thing I have found is, I'll just pick on this, is PC Law, which has become somewhat of a server-based, antiquated style system that a lot of people—

They'll write it—

And you know, 10 years ago it was the bomb.

Mm-hmm.

And it's moving off. And then now it was—

Yeah, you're moving off. Okay, no problem. But how you get the data out, how the data gets constructed in a new software, how all of that works, And how does your company work? How do you all communicate about your cases? What's happening? Where does, where does the baton get passed from person to person and back? Like a relay race. Sometimes you get it back and forth and back and forth. Um, so with legal software practice management side, what are the core pieces that need to happen? Do you actually just need time and billing? There's legal-specific time and billing, or do you need something that can house a lot more information in, you know—

All the way through the process.

All the way through, yes, exactly.

With the exception of accounting.

Yeah.

We both kind of laugh and look down.

Yeah, yeah, it's hard. I often hear this, it's hard to find accounting professionals that will service these all-in-ones very specifically.

Correct.

Adorant being one of them. The idea of it, to me, we're at a time that we do this with our everyday lives. Our bank, sure, we could do a lot of stuff inside our bank. It also integrates with other personal budget softwares that we can utilize. It, um, our emails, same thing. We get— there's tools now. We're in the AI world, so there are tools that could tell us what's in there and what needs our attention, what doesn't, what's just pure junk, and do we want to unsubscribe. There are learning modules happening out there. What works for you? If you're not in one, doing some due diligence and really like— also the cost of an accounting person doing the work with you, that's also— a lot of people want in-house, but that's not affordable when you're first starting out. And sometimes, do you honestly— the in-house person, depending on your size Who's overseeing that? Do you have the bandwidth to oversee that? Do you have the securities and protocols in place to really have it built and overseen to ensure that you're making the compliance pieces working for IOLTA or IOLA, depending on where you are? And there it goes, so on and so forth. So the adoption of software within your firm is a question. The ability to— I think, Steve, you brought it up. What's the other one? The ability to adopt, not just adopt it, the workflows and how you interact with the software. The output, I think, is what you were saying. Like, does it do it the way you want to do it? The time and billing?

Yeah, like as an example, does it have customizable reports? Are they just cookie-cutter kitchen reports? You know, cookie cutter. I really like a software, a legal software, billing software that that really gives you the ability to drill down and customize reporting to your needs. That's huge. That's— and that seems to be one of the big stumbling blocks for law firm administrators and partners of the firm when they're like, well, why can't you just get that out? I need this information this way and it's not there.

I think the rules and permissions, you just like, as you're talking, I'm like, the first thing I thought of is the rules and permissions. There are— so we have, um, a firm we work with, and we had to pull back certain pieces because people talk a little too much. The perception of what a firm brings in and what's owed to you as an employee, that's a little tricky wick, right? Oh my gosh, yeah. Stay like— so in that, it's what, what are the permissions? What are the rules? Does it integrate with things that are happening currently for yourself? Maybe you have a whole system built out. Is there a way that it can work with that? I think the one-all kind of one-shot deal, it's not sustainable because you cannot predict your growth exactly. What if you bring on— we've seen this, Steve— you bring on a firm that uses a totally different software. They're maybe their tenure compared to your firm and it's an acquisition where, you know, somebody's moving on and they want it. Now what do you do? I've seen that. I've seen an acquisition happen and get pulled apart. How does the data move out of that?

I'm shifting very slowly here. Yeah.

It didn't work out. It got to unwind. So I, the user interface is also really important. We've seen this. How many times, Steve, have you been brought into a conversation where we're moving to this platform, but the person in-house doesn't want to move to that platform, so they're quitting and I need someone to take over the accounting role?

Oh yeah. Yeah, yeah, yeah.

Yeah, yeah, yeah.

Yeah, yeah, yeah.

Or I think about a law firm that I worked in that used this one software that was just, horrendous. And I went to legal— I think it was Legal Week, I can't remember what, what the convention was— in Chicago one year. And they had a lot of vendors there. And this vendor was there and they're like, oh, you're Steve from so-and-so. And I had brought a list of questions. I'm like, I can't figure this out in your software, can you please tell me? And the guy kept brushing me off and helping other people. And I'm like, he can't answer these questions.

He doesn't know.

Yeah. The point being, you've really got to ask based on your operation and what you do. After all, it's, it's, it's the software that's going to give you the answers to everything so you can run the business side of the law firm.

Even better that you're able to do that. So I, I love that you brought this up. I do that.

And—

Oh, you're so good at this. You're this— that's why I brought it up, because I'm like, Sarah, if you want the, if you want the pit bull to 'with you, take Sarah.' What's the beauty is Cleo opens up with open arms.

I, I love that I can walk in and I'm identified immediately in the area. Not—

it's not just about support, it's like, 'Hey, they have Sarah Watch at these conventions, by the way.' So they have—

it's so awesome. I love that I can walk in and be recognized and supported and have great ideas, and it's not just my idea, it's Maybe this one client does it this way and I like the way this one works, but how do we improve the product to enhance it across the board? If it's not reasonable, great, that's okay. I'm okay with that. Just maybe there's a workaround. Maybe there's another way to approach it. So any event, I bring all that up because I like that you do that. There— I do see people that work inside firms that do that, but sometimes when you have scale like us, you're seeing it across multiple firms.

Exactly.

You might actually hit it a little differently. And it's of really big value. And I enjoy, I mean, I'll be honest with you, I'll go to the conference, but I'm really, I just want to put myself and park it at those desks and be like, hey, let's kind of work through it. I've had certain conferences and certain desks I've been asked to join, like asked to come in strategic appointments and other ones where I can tell they're not paying attention. So then when I bring it up to somebody else, I get rerouted and I can see, oh, okay, we better pay attention. This is not a dismissive behavior. So that's interesting. I, I'm curious, like, based on practice area though, I will say depending on— and we see this, I'm not going to bring up the practice area. I see this a lot in trends. Yeah. Where I'll see, oh, the masses are using X, Y, and Z. Yeah. Um, project management-based platform. And why? And I get why, but then they take it one step further to the point where I'm like, you're on the freight. You need an accounting software. I'm sorry, you can't do everything through this practice management software. If there's something that could meet you in the middle, do all of your workflow details in there and then have the accounting on the other side, great. But I do find I get concerned, and my biggest red flag, and I'm sure you're the same, is multiple state, multiple compliance jurisdictions. How is the IOLTA kept? How is the billing kept? How is AR kept? Does it match those bar rules?

Right.

And if you're gonna do the wave of the flag, which this happened, um, We had somebody from the East Coast thinking about a California firm, and it was part of sort of a broad thing. And I was like, oh, I don't need to do— mm-mm, sorry. There's enough going on in California. You got to look at that differently.

Right, right. Well, you know, I've taught at our local bar association for well over a decade, decade and a half almost. But back in the early days, and this is fair, I'm going to bring Clio's name up. Back in the early days, I was not a fan of Clio. I would be honest with people and brutal about it. Now I'm one of their biggest fans, you know?

Awesome, yeah.

And so it's learning about the different softwares and what they do. And, you know, they've been brilliant in how they've brought that product along. And I think they're the most widely used in the world now, aren't they?

They really have done a great, I mean, to some they're like a blessing and a curse. You see some firm owners.

Exactly, yeah. Yeah, yeah, yeah.

Okay, that's fine. It's the one I—

Same with LeanLaw.

Yeah, it's the one I first experienced. It's the one I have the most knowledge in. I've held the longest certification for myself. It's about 10 years, and I didn't know enough to know differently at the time, but it was, to me, user-friendly. It made sense. But all softwares start in that, and I guess it goes back to your point, Steve, is you might have seen it once, a different product? Like, it could have been LeanLot, could have been, uh, I don't want to call it LeapFrog, but Leap something. Could have been that. And then, are they innovating? Are they excelling? A lot of these people are getting purchased. A lot of them are getting—

I was just gonna say, they started out with the— and the goal is to get purchased. Make it, make it attractive, sell the thing, and move on. That happens.

And some are building it out of need. Because maybe a colleague or a friend is like, oh, and then you develop the software. But when you start talking to people like us who are thinking about the deeper side of it, and I get this a lot from, from, uh, you know, software companies, they'll be like, oh, well, that wasn't a forethought, it was to meet this need. I'm like, well, you're gonna start this, you're gonna do all of this, you're building a GL, you exist, you previously never had a GL.

Yeah.

There's a lot to think about. I hope you got the right person in that seat doing that work. So there's a lot of competition out there.

There is.

Mm-hmm. Yeah. So, um, and then, and really, what, what, who are you appealing to? What size firm do you fit best? Obviously, if you are a 100-person firm, multiple states, that's a different program.

That is huge now. Yeah.

Depends on what, what you're practicing too. Are you multi-practice area? There's a lot. So I think you have to think about the layers of what's key for you, how you work, and then what is available. And then look, look at them, demo them. If you want, you know, an accounting person to be along with you because they know it from the other side.

Please, please bring us along on the journey.

Yes.

Yeah, there's multiples of us out there. There's consultants that also can and kind of talk through it. There's a lot of product out there, to be honest with you. So I don't know. I don't know what's the best approach as the firm owner because I feel like it's—

It's a scary endeavor sometimes.

—observing a little bit. Yeah. Like, yeah.

Or the managing partner who, you know, is being pulled in 400 directions just says, you know, somebody find something. Just make it work. You know, really have a passion from the top.

How does just make it work work, Steve?

Exactly. You know, failing to plan is a plan for failure. That works so well with this type of subject. But, you know, being involved and really understanding, maybe you don't have to know all the nuts and bolts, but have a clear path for what you want. What you want to see in the end and who's going to implement it and how. And to your point, bringing us along on that journey, it's just so important.

Yeah, it's hard for people to know. I understand. Like, it's hard. Where do you start? What's the first thing do you look at? Like, is it the time management side of it? Is it the client experience side of it? Where does all the communication— like, what are you— starting? Is it how do you gain clients? Do you want to track that in addition to— there's a lot of programs that integrate with other programs to help you with that traction, to understand your marketing, because everyone wants to throw money towards marketing more than they should sometimes.

There is no magic pill for any of this. Anything that's worth having to make you successful is worth really digging deep and investigating as a— look at it as an investment in your business.

Yeah.

You know, the worst thing is to walk onto, let's say, a car lot and go, I like that red car over there, and you drive off with it. And then all of a sudden it doesn't have all the buttons that you want inside of it to do different things. Same thing with software.

Or the wheels fall off.

There's no one-size-fits-all. There's no magic pill.

Yeah.

And if it's one of the things that you really need to focus on, on the business side of the law firm, Mm-hmm. That you will be happy with later. There is no perfect software. There is no perfect software, but there are some that really outshine the others. And those, that's turn those rocks over and figure out which one's gonna fit and why. Why is it going to fit your practice? Because you need to then be able to sell it to the people on your team and you need to make it seamless for your customers, for your clients.

Employee retention is a big part of this too.

Yes.

Saying you don't move software for that reason, but you never know. I mean, and also attraction, employee attraction too.

Yes.

Younger— I will say it to me, the appeal, the younger associates that are going in are looking for that kind of thing because if you think about it, that's what they're raised in with their college and all. They're used to being on all these online platforms, a whole messaging style system. But also if you're sitting in court and you're not in that modern day moment and somebody else is and it's all within their phone, which—

It's that little razor thin advantage.

It is, or ease of use or all of that stuff. And we've had people come to us and say, I want to attract younger talent. I need to change my software.

I love hearing that.

I'm taking over my mother or father's firm. I need this to move in a progressive way that it makes sense for me. So there's, it's just what feels right and what due diligence and consulting on this is something we've done. I mean, it's just, it's all very interesting asking the right questions. So yeah.

How many softwares have you seen, legal softwares that like what we're talking about today, how many have you seen that have a trial period and that's, that's generous enough for someone to really dig in and see if it's really the right thing.

I don't know if it's the trial period that I would want to see. I mean, yeah, sure, to play around just to mess around for a little bit. The demo and the detail and knowing, that's the hard part.

Yeah.

You said it, what's the output? Where are the reports? What is the detail? How many things you have to cobble together to make it work?

The cobbling together, yes.

Yeah. Maybe you need to not do it solo on the demo. Maybe somebody else needs to look at it with you that has this knowledge, though. So, yeah.

Your billing person, your operations manager, whoever that person is, your accounting team. If it's us, definitely, like we said a while ago, include us in that piece.

We might identify someone on your team that we think is brilliant to be a part of it.

Absolutely.

Because it's document management. It's client. Like clients. How are clients going to interact with you? Obviously email is not always the best way when you have sensitive data, getting things signed, um, and then looking at the trust accounting, looking at the analytics, looking at how you're going to grow or sustain. Um, so yeah, there's, there's a lot behind these decisions.

There is.

It's not taking it lightly, I guess, is what we're leading with. And maybe what we're going to start doing is putting what we find as a certified list. If you're not on the list, maybe you need to make a demo scheduled appointment with us so we can look at your product and see it.

Please do. We're open, open arms. Come in and talk to us.

We'd love to see your product. Why would it be important? What practice area do you service? If it's multiple, how it works with multiple. And if you're a software developer out there and you're not on our list, Tiara, our assistant, can have you meet us. So— This was good.

Thanks, Steve. Thank you, Sarah. I really enjoyed this conversation.

Yeah, definitely.

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Okay, Steve, I know when she does the announcement, the thing that goes in my head is Jeopardy.

Yeah.

It's like a funny thing to me, like, or what's the show with all the boxes and all the celebrities go in and then you—

Oh, Hollywood Squares.

Yeah, yeah, yeah. That's what—

yeah, I'll be Paul Lynda Artesani.

I love it. Well, thanks again for today. This is good.

Thank you as well. You have a great one. Bye. Bye-bye.