Accountants serving law firms need to tailor their approach by practice area. Corporate law demands monthly precision; family law requires confidentiality and profit tracking by client; criminal defense runs on credit cards with tight budgets; IP work involves multi-state royalties; real estate needs escrow management and closing-cost tracking. Using practice-management software like Clio or LeanLaw automates the details.
Chapters
Welcome back. This week, we're gonna go off the train of trust accounting, and really, we're gonna talk a little bit about how you can help your clients with their finances. And really, I wanna tail this to some of the, a few specific practice areas because they're all different. They have different workflows. We've known, noticed for working for many years with different practice areas that we've kind of developed and designed some workflows that work really well. So I think it's best to be able to support your clients by different practice areas. And I know some of the people we work with at the Law Lab, they've actually niched down even more to just a law. They actually niche down to a specific area of law. Corporate attorneys, for example, are very easy to work with, but they have to be very precision and detail-oriented. You'll see with corporate law, the cases and matters will be things like mergers, acquisitions, compliance. And business governance. So it's kind of a dry practice area, but it's a, it's a one that's going to involve the client, the attorney that has to work in very meticulous detail. So knowing that about your attorney, if they're in this practice area, that's probably something that you're going to need to pay attention to when you provide your services to them. So it's really important. Obviously we talked about trust enough lately. You have to make sure that you maintain accurate financial records, make sure that they're in compliance. Make sure that they're ready. You're probably going to need to show them financial documents maybe more frequently, not quarterly, but maybe more monthly. You're probably going to have times when you meet with these attorneys and talk to them about where their direction of the financial documents, what they say and where they're going. Really to help them navigate and facilitate a more productive conversation with them, And to, to really let them know that you're their financial partner. And I think that letting them know that they can deal with, work on what they have to work on, and that they've got this trusted partner in you that will help them with their work and their firm and their financial growth. So the next, the next one I'm gonna talk about is not a favorite of mine as clients. It's pretty difficult practice area and it's very difficult to really nail the attorney down. The attorneys tend to be so busy, and this is family law. Now, family lawyers tend to be very compassionate people. There's a lot of confidentiality in the work that they do. You're gonna see that if you start to work in the files, that you're gonna see a lot of things like you'll see child custody and things like that, the names of the matters. Family lawyers work at a very high emotional level. Their cases are emotionally charged. You're looking at maybe divorce cases, child custody cases, adoption. There's a lot of different variety to family law, and their financial needs often involve maybe asset division. Sometimes you'll be asked to help them with some of those things in the cases themselves that really aren't working with the client themselves, but with the client's client. You might be asked to do some alimony calculations and, and then obviously trust management. So how do you support them? You're gonna prioritize the confidentiality. Any bookkeeper on your team Should know that whatever they read or see, they are not allowed to talk about, because you can see a lot of things, especially in, in with Clio, because you, you have eyes on the matters. You can see a lot of the detail there. Know that you're gonna be handling that financial data with sensitivity. That's really important. You should do that with all clients, but we use Lycio to protect our clients when we have a lot of the communications, very sensitive. It's a very closed loop system that allows us to have that ability to be forward and open with the client, but it's not in the internet. It's not, it's in the internet, but it's not in the emails, right? So it's very safe. And then you need to ensure that if there's any records available that they, they may want their law firm records broken down by practice area, or they might want to divide it down even more detail besides family law. It might be down to how many divorces were they profitable, how many child custody cases, was that profitable? So you're gonna maybe be asked to kind of fine-tune under that level of the income. So know that that's available, that you can do it, and with the right practice management tool, it's, it's available to you. You just have to make sure you use Classes and you track that. But it's important to be able to do that so that you're able to see, you're able to get that for your clients and ensure that all the monetary matters are properly accounted for and that they have that detail. So that can help them grow and determine what, what part of their practice really is the profitable part. Next area I'm gonna talk about, which is another one that's kind of difficult to work with. The attorneys are always so busy, hard to nail them down. It's criminal defense attorneys. It's a fast-paced practice area for sure. You have to be, they're very cost conscious. They have high pressure. They're in court a lot. Nobody wants to go in court. It means they're sitting around a lot, but they're also advocating for their clients. So it's, it's just a different practice area that you're going to see a lot of smaller transactions. You're probably going to be dealing with credit card payments because most of these people come to their attorneys in crisis. Just like family law, you're going to see a lot of credit card transactions there. You might see a lot of similar names in family law that you won't necessarily see, but you're going to see some interesting cases. Confidentiality is super important here as well. Um, timeliness is critical because these cases might come up really quickly, so you can't let their client— this client have their documents lag behind. Um, you wanna make sure that all the case expenses are tracked because those are usually billed back to the client. Uh, make sure that they're meticulously tracked. Um, obviously financial reports are delivered promptly. Uh, if they have a budget, if they produce a budget for their client, you wanna make sure they stay within that budget. If they end up going above it, maybe they need to get an investigator or something like that. You gotta let the client know that you did not mention that to the law firm's client and that they need to maybe address it with with their clients just to keep the billing happy. A lot of collections and things like that you will see in this, this type of practice area. The next one I'm gonna talk about is intellectual property attorneys. Those lawyers deal with patents, trademarks, copyrights. A lot of times they work multiple states. You might have to track that as well, where the income is flowing in from, tracking any royalty payments, any licensing agreements, financial fees that may be paid. Uh, you want to make sure that all of the costs involved are billed back to the client if that's how they're set up. And you want to make sure that you position yourself with a good workflow that tracks that. I like LeanLaw because we can pull those in, advance client costs, book them to the client. It's easily, easily tracked. So that's another place that you're able to really keep track and stay on top of that for the lawyers. It's a, a busy practice for the attorneys, but you can definitely find time to meet with them and go over the practice. Um, look over their financials with them. They don't tend to be the ones that stand you up at meetings. Uh, real estate attorneys— again, talk about a fast pace. So things kind of dribble in, and all of a sudden the closing's happening, and then the whole world kind of spins around that closing date and the time. You have to track the closing costs, the commissions. There's usually settlement sheets. You have to follow all of that. Uh, this is a little bit more refined practice area that you might, might want to really dive deep into, not just this few words I'm going to speak about this with you. It's a practice area that you really want to track the financial assets. It— there's a lot there. They have escrow account instead of a retainer account or an IOLTA trust, although sometimes they can have both. So know the difference between those. Sometimes there's just money put in a special bank account just for that one matter. Know that that's normal and that that's sometimes how these practice— this particular practice area works. There's a lot of accounting rules and regulations around that. You really need to know what you're doing. They tend to have more of a specialized software that you need to follow and track with that. So as you can see, just in these few practice areas that I talked about, they can all have their different little nuances. And it's good to really dive deep into that, do a lot of studying, find out a lot about their industry, maybe track the bar association specifically under the practice area. That's always available. You might find some stuff on Clio. They have an amazing blog. Of course, I've done some things here. We've done Law Labs. Specific to certain practice area meetings where we've talked only about one particular practice area, like PI attorneys. So we try to stick to that and kind of gather tips from everybody that's worked with those kind of clients to see what everybody's doing to make it a better practice area for you. If you can fine-tune your accounting firm down to that niche law firm, that sets you above any other bookkeeper because you know the industry. Yeah. That your attorney's working in. So it's never a bad thing to get even to that micro niche level. Hope that's helpful and we'll see you all next week. Bye now. Bye.
