Top Onboarding Mistakes When Working With Law Firms | Legal Bookkeeping & Trust Accounting Tips

Hi everyone. Welcome back to the Accountant's Law Lab. We are your go-to source for expert tips on bookkeeping for law firms. We are here to help you become the best bookkeeper for working with attorneys. And we're here to help you streamline your services. Today we're gonna dive deep into a crucial topic, a common onboarding mistakes bookkeepers make with law firms and how to avoid them. If you're a bookkeeper specializing in legal bookkeeping, or maybe just starting out working with law firm clients, this video is for you. We're gonna cover everything from trust accounting pitfalls to compliance rules. So stick around, it'll save you from having any headaches. And help you learn from some of the mistakes we maybe made along the way with legal bookkeeping. Because getting your onboarding right can really make or break the relationship with a client. And I can honestly tell you, it's like that first date. It's the same thing with working with attorneys. You want to have a good first impression. It's really hard to recover from a bad first impression. When you start to work with attorneys, their law firm work is not like every other regular business. They have strict bar association rules and client trust accounts. And very frustrated clients sometimes. And sometimes they may have even bar complaints. You want to avoid common errors and you'll position yourself as a reliable expert in legal bookkeeping services. So why does onboarding matter so much with legal bookkeeping? First off, let's talk about why onboarding is a big deal for bookkeepers in general and working with law firms. Unlike standard businesses, law firms manage other people's records, right? They handle other people's money. And if you think about it from that perspective, they are handling other money that they don't get to really have in their bank account until they've earned it. So trust account money. So unlike regular businesses, most businesses, they invoice, they get paid, boom, done. With law firms, they have money that they get paid up front, they put it in trust, and then the money moves over to the operating account when they've earned it. Timing's really critical here. They have strict ethical rules in their business, and it comes right down from their state bar, their local bar, bar association, It's a good practice to go on this website of the state that your attorney practices, or states, and understand the rules. Read those, memorize them, get that down pat. That's gonna really help you. When you work with lawyers, you're gonna have to work with maintaining confidentiality. You gotta make sure the client never commingles funds or puts funds in the wrong place that it doesn't belong. And you wanna make sure that it's crystal clear that you're handling these funds properly. And you want to use precise billing methods. A lot of law firms, they do hourly work, which makes it more complex, more tracking, more time intensive. But then some of them may do fixed fee billing, and sometimes you might work with a personal injury attorney or a different type of attorney that does contingency fees, and you need to understand what that is when you start to work with them. So having a solid onboarding process helps you understand the firm's unique setup. From trust accounting plus the billing. You need to know their software, you need to know the software that you need to use for them. And it's also sometimes their software. So Clio they might be using and then you'll be using, and it will help them to prevent costly errors that could lead to fines for them. It could lead to legal troubles if they've done something wrong with trust funds and it can get them in a lot of trouble. They could actually lose their license to practice law. If you have everything transparent and work the accounting precise. It will help them to demonstrate professionalism with their clients. There's no question about how much money's in the trust fund, how much money's been applied. You want to really keep that and help them with this legal bookkeeping process for them to build trust with their clients from day one. If you skip this, you'll be wasting time fixing a lot of preventable issues, and you don't want to be doing that. And if you're really looking at why onboarding matters in legal accounting, remember it's the foundation for that smooth compliant operation. So that's really key. So as we go further into this a little deeper, the most common mistakes and how to fix them. So let's get to the meat of it. The top onboarding mistakes that bookkeepers make, and it's not just with law firms, but with other clients, is maybe they're not really working with attorneys at all, and they're spending a lot of time Googling to figure out what the heck they're supposed to do. That's a common mistake that law firm bookkeeping— Mm-hmm. Professionals make if they don't know what is expected of them, what is their role. So the first thing you wanna do with attorneys, obviously you wanna set clear expectations upfront. That's pretty much huge with law firm accounting. You want to have clear agreements with your attorney. It shouldn't just be on a handshake and a conversation. It should be written down. Assumptions only lead to confusion, delays, and disputes. You don't wanna have any of that with your client. What does the firm expect from you for monthly reports or quarterly reports? Who's going to handle the trust account reconciliation? Those are important key components of the work that we do, and all that needs to be written down. They might not even know they need a 3-way bank reconciliation. That's where you step in as the professional and you let them know what they need to have to stay compliant. So start with a very good contract with the attorney. And then also do a kickoff meeting. Let them know what is expected of them. You're in the honeymoon phase, so what's expected of them? What is expected from your end? Discuss reports with them. They might not even know the reports they need. They might not even say to you, like, "What should I be asking for?" It seems odd, but this isn't the world they live in, this financial world. They live in a verbal world where they're helping people. So we need to help them understand the reports that they need. And the reports you need. You might need bank statements, so you might need to have accountant access to the bank. You really wanna set those items up really clearly in a kickoff meeting. You might wanna talk to them about invoicing. A lot of the bookkeepers we talk to, they don't wanna touch invoicing for their client, and it's a missed opportunity. You can make a lot of money doing the billing. Who's gonna put things in Clio? Who's gonna fix things that weren't put into Clio? You need to make sure you have that written down. Do you touch LeanLaw, or do you touch the legal platform that they're in, or are they going to, and you have to instruct them on how to do that. Which one's gonna save you time? You don't really wanna be having to have them fix things. You want them to understand how to put the data in, but then you don't wanna be running behind them and fixing them all the time. Outline all the responsibilities clearly. Like, this firm sends cleared checks weekly, or deposits. I need copies of all the checks that were deposited. We're gonna reconcile your trust account monthly. Let them know. This is gonna build immediate trust and it'll prevent misunderstandings in onboarding. Really important. The second mistake bookkeepers can make is not having good communication. Poor communication definitely is a problem. Law firms operate on tight deadlines, so not talking to your client or having spotty communication can really cause problems with a client, missed information, errors, frustration. If you're only emailing your client, you might miss the opportunity to have a good conversation. I can tell you, person to person, sometimes just having that one-on-one with the bookkeeper is really helpful. You could help educate them a bit on what we do in our processes, and then also have a relationship with the client. We know, we see it when we see our clients working with the tax professionals, they see them once a year and all they're doing is being told, I need this, I need this. It's not a great relationship. We are the bridge to that. We can have a great relationship. And it's really key that we can actually step in and be the intermediary between us and the tax person. I can't tell you how many times I've had conversations with our clients and they're like, "Oh, I can't stand my tax person." And then I ask why, and they'll say, "All they do is ask me for a lot of documents and then they never talk to me." When are you talking to them? Are you only talking to them when they're up against a deadline and they have to provide tax returns and they have to get things done at specific times? Or do you talk to them throughout the year? And they don't. So we wanna be that person that they do talk to during the year. And then we wanna step forward and answer the questions to the tax person on behalf of the client. They love you for that, that you're coming in and you speak the same language. They love you for that. So it's important to maybe be that person that will do that. So remember that there's tight deadlines. And you can do multiple channels with your clients. You can do phone calls, video meetings, you can have client portals or tools like Clio and QuickBooks, but agree on times upfront. And a lot of these clients, especially if they're solo attorneys, they get very busy. Be that, Maybe you just do videos for them, but try to find some face time with them at least once or twice a year at minimum. And then be proactive, give them updates so they don't think that you're in the background doing something, but they feel like you're not doing anything because they never have a conversation with you at all. So that's definitely important that you want to set the ground rules that way. And you don't want to have a client that you never speak with or never have communication with. So we want to look at legal bookkeeping a little bit different than regular bookkeeping. So you don't want to treat all clients the same and not have optimization. In fact, I would love that we could like cookie-cutter all our clients, but that doesn't happen. So legal bookkeeping is definitely not one-size-fits-all. Each law firm has unique needs like hourly billing, contingency, retainers. They could have evergreen. There's so many ways. It could be in personal injury, it could be corporate law. There's lots of different law firm types. So you want to be prepared when the targeted questions come at you. What practice areas are you the most familiar with? And then how do you handle retainers and settlements? They might ask you that in the interview phase. Do you use trust accounting software? Is one of the number one questions we ask. Don't be surprised if they turn around and answer you and say, I use a spreadsheet. And then you have— it's your job to tell them why they don't want to just use a spreadsheet. Dive into their setup. Take a look at their Clio settings in the back. Look at their LeanLaw settings in the back. See how it's set up. Integrate the systems. I see a lot of clients that they speak to their friends in court and they're like, oh, don't ever connect Clio and QuickBooks. It's a disaster. It's not a disaster if you do it right. But the key is knowing how to do it. Offerized customized help, especially if their financial— their staff lacks financial expertise. You'll run into that, that Mary's been doing the bookkeeping, but she's really a paralegal. And we gave her this job because she's the best paralegal we have, but she knows how to do her own checkbook. That's about the most accounting background she has. And you're going to come in and you want to work with her, but you want to be a partner with her. So you want to have it so that if the staff is lacking financial expertise, You want to— you're not there to educate them, but you're there to help assist them, give them a role, and then you take on the parts that you know are essential for long-term success with legal bookkeeping. Another thing we see, and I don't see this too often because most of my clients are really afraid of not being non-compliant, it's compliance and rules. It's critical. You need to know the rules. They change. Stay in touch, stay on the websites, find out what they are, and then— Yeah. Make sure that your client keeps the trust funds and the operating money separate. This happens sometimes, they put the money in the wrong bank. Make sure that's moved. Mistakes can happen, but there can be serious consequences like bar sanctions if it's not done properly. Stay ahead of the client by you being the one to make sure you know all the state rules. Always segregate client funds in putting them in trust. Keep them tracked. Perform the 3-way bank reconciliation, your bank statement, client ledgers, and the trust ledger all align. Document everything. Implement regular audits where you're looking at the data as overall and making sure that— If they have a compliance officer, talk to that person, the person that oversees all this. Prioritize compliance. It's going to protect you and it's going to really work well for your law firm client. Another thing we see with law firms, unfortunately, is they might skip the technology setup. So they just connect it and go on the fly. They don't use the technology to its most optimal use. So if the law firm is gonna rely on specialized software, a poor integration can mean data errors, can mean it mapped to the wrong account. It can mean duplicate work, redundant work, which is a common pitfall that we see with legal bookkeeping technology. So avoid it by making sure that you're checking for compatibility with the tools, QuickBooks Zero, Clio, PracticePanther, LeanLaw, whatever they're using, and then collaborate with their IT team, connect it securely, test it. Don't just dive in and say good enough and let it go. You wanna test it so you— otherwise you're not cleaning up a mess afterwards. Make sure the invoicing looks good. Make sure that you emphasize with the client the importance of security and encryption and multifactor authentication. Strong passwords because they're involved in keeping their client data confidential. Seamless setup is gonna minimize mistakes in onboarding problems that you'll see with a new law firm client. So the next tip is not training or teaching the support team staff. So lawyers aren't financial pros. You might run into some that maybe had a CPA or something like that, but for the most part, this is not their forte. And they don't always understand the processes involved with the work that we do, and errors can creep in, especially with trusts and operating accounts. So to fix this, provide some training sessions, even if it's directly with the attorney, if you're working with a small firm, and how do you submit documents? How do you interpret reports? Help them through this. Use Loom, make videos if they don't have time to meet with you. Sometimes they're wearing so many hats, these smaller firms, that they don't have time to meet with you at a time that is agreeable for both of you. Make videos, let them help learn. And I find that when you're gonna do those educational type videos, 15 minutes max, 10 to 15 minutes is enough for just to give a little bit of learning. What's a balance sheet? What's this report used for? Where does the data come from? Maybe you look at their chart of accounts and say, this is what I recommend, that you change the chart of accounts layout, things like that. You wanna make sure that you help them and it's gonna foster a feeling of teamwork that they're the partner with you. More of an us against them kind of scenario. And then you can't improve if you don't ask for feedback. After 1 to 3 months, many bookkeepers just skip this. They miss the chance to refine their service. Be brave. Send out a quick survey or hop on and say, how's it going? Are there any pain points? Any feedback or any adjustments or any communication channels, changes you want us to make? We've had that happen where like the client said, I don't know where you want me to talk to you. I mean, to do a LeanLaw, do you want me to be sending you an email? You set the bar at a certain place and sometimes things go awry. Maybe you've got a Slack channel, they don't know where to go, and they're looking in 5 places and you don't wanna waste their time too. So that's something you wanna really work with them and find out, how can I improve? It's really gonna set you above any other bookkeeping service. For best practices as a wrap-up here for onboarding law firm clients, start with a clear agreement, engagement with them, and set the expectations. Communicate often and clearly. Customize to their unique needs, especially around their trust accounting. Prioritize compliance and bar rules. Handle tech and security with care. Train the support team and ask for feedback. That's really what you need to do. If you follow these common rules, you'll avoid mistakes and you'll keep a happy, satisfied client, which brings on more clients, right? It's very fruitful. Mm-hmm. So keep your clients happy and you'll thrive in the rewarding niche of working with legal bookkeeping. And if you're new, start by mastering trust accounting— it's where most of the errors happen— and go from there. Thank you for watching. I hope this helped you with onboarding your law firm clients in trust accounting. Hit that like button and subscribe for more videos on bookkeeping for law firms, and drop a comment below if you have any questions. What's your biggest onboarding challenge? send a message and we'll definitely do a video on it. Check the description for links to sources. We've put a lot of resources here and we'll see you next time and keep those books compliant and your clients happy. Bye now. Bye.