Sarah Prevost reviews bookkeeping software for mid-size law firms, comparing Clio Manage, QuickBooks Online, Xero, and Cosmolex. Key features include trust accounting, real-time billing, automatic time-to-invoice conversion, and three-way bank reconciliation. Two-way syncs like LeanLaw offer advantages over one-way integrations.
Chapters
For mid-sized law firms, accurate bookkeeping isn't optional. It's essential for compliance, financial health, and growth. Manual processes just waste time. You risk errors. Especially with trust accounts and fiduciary duties. So it's important, right? And we just talked about this a couple of months ago when we talked about trust accounting. Today we're going to explore why automation matters, some key features to consider, and some recommendations, some top recommendations with legal tech, specifically Clio and QuickBooks Online and Xero, and perhaps even the all-in-one Cosmolex, which I do see some clients gravitating to because they want the all-in-one. Not a huge fan, but it is an option. So let's streamline your firm's finances. Precise records, especially when we're talking about trust, track transactions and ensure that the trust funds are separate. And you also want to have accurate accounting to support tax compliance and aid with audits. Errors can lead to penalties or even worse. Automation is going to save you time It reduces mistakes, and it really and truly provides some real-time insights, which are so beneficial for law firms, and frees the team up for higher-value work. So we don't want our teams doing some of that low-hanging fruit that I call. We want them to be able to automate processes so that we can boost efficiency with our teams, and especially when you're talking about a mid-sized law firm and they're handling growing volumes. So the first thing you want to do is prioritize. Robust trust accounting for compliant client fund management and reconciliations is critical. Integrating with real-time billing and auto-converting hours into invoices, doing it manually and like maybe using a time tracking tool over here and typing things into Word, no longer is that a thing. Those days are long gone. You want to have really good practices with time tracking and billing and using a product like Clio, and then really using comprehensive reporting and you're going to be able to extract the analytics. You can't do that when you have all these pieces that work separately and independently from each other. These features are going to ensure your accuracy, your compliance, and really give you strategic visibility. And that's really what we want to do, especially when you get into larger firms. You really want to have that for all the partners. So Clio Manage, hands down, in my opinion, the best software. And I wasn't always the biggest Clio fan, but I've been going to their conferences and seeing where their growth is and seeing where they've invested their money. And really, when you're investing your money into selecting a software, picking some oddball one that was made up by somebody who's not really taking the time to, to keep improving it is a lot different than picking something like Clio. That's the grandpa of software. It's been around the longest. It's the biggest platform, most popular one. There's a reason for that. And it's tailored for law firms and it really sits on top of QuickBooks. And it makes your QuickBooks product law firm specific. So it helps with the trust accounting. It's not easy to track trust without having the tool of Clio. It helps with time tracking. It helps with billing. It has a strong integration with QuickBooks and with Xero. It automates workflows and it offers legal-specific reporting. And that's the thing, we want the legal-specific reporting. Clio's reporting isn't all that perfect yet. It's getting better. But there are some outside firms like My Firm Data that create reports. You can have them build reports for you out of Clio. So I highly recommend looking into that. If Clio doesn't supply you with the report that you need, there are other options out there, and you just need to come to a company like us that can help navigate you to that area. QuickBooks Online is really the one that most of the people use in the United States, although we are starting to see a shift to Xero. But QuickBooks Online is very versatile. It's a general accounting platform. It's great with expense tracking. The invoices, when you put them in Clio, they're produced out of Clio, but they're pushed into QuickBooks, and there's a lot of reporting there. That's one of the main reasons a lot of firms gravitate towards QuickBooks, because of the reporting. And it does have a strong integration with QuickBooks. It is a one-way sync, so it's not as good as LeanLaw that has a two-way sync that you can make a change here on this side or make a change there on that side and they speak to each other. So there are some things you need to look for when you start to use Clio, but overall the product's phenomenal, especially from the law firm side, because there's so many things it does on the law firm side with the time tracking and setting up the cases and matters and templating a lot of what the law firms do. The integration with their new AI is phenomenal. There's nobody out there that has a better type of AI than Clio when it comes to law firms. And I think that it excels in user-friendliness. It has great legal integrations. The reason why Clio is so good, because there's all these other companies that make software that works with Clio that integrate that you can work into your practice area with layering on some other software. Not a lot of them have all that goes with it. So a lot of times you'll get a software and it doesn't speak to getting you fine-tuned into your practice area like Clio does. So I highly recommend that. A lot of time-saving, there'll be fewer errors for you, And it will give you, like I said earlier, the real-time insights to help you make better decisions in your law firm overall. And it helps you to streamline the reconciliations. That's a big piece of it, right? We have to do our 3-way bank reconciliation. There's a reconciliation piece in Clio, and if you start using it from the very beginning, it will work fine. If you have an existing firm before they implemented this reconciliation, it does not work. So know that you're still going to have to do that 3-way reconciliation. We use LifeFlow and we've prebuilt A 3-way reconciliation in LifeFlow, which is a Chrome add-on. Highly recommend that. It works with Google Sheets. It also works with Microsoft products as well. So you can work with Excel. It's a great product. And we've got a baked-in 3-way bank reconciliation created, and it's called The Proper Trust. That's the other firm that I co-own, and it's a beautiful form that we use in our firm. It saves a ton of time, especially if you're a mid-sized firm, you're dealing with a lot of trust accounts. It's just a beautiful transparent way. Have eyes on and see where there's maybe some problems in the accounts. It just picks it up seamlessly. So you want to assess your needs thoroughly and then look at software before you make your choices. Talk to the experts, talk to your tax team, talk to your accounting team, talk to other law firm owners to see what they're using. But the best thing you can do is automate your bookkeeping and it will transform your mid-sized practice. It will help you enhance your compliance, keep you accurate, so you'll have it locked down. You can't send out more money than you've put in. It'll improve the accuracy. It'll help with the growth of your firm. It'll help you with any audit processes. Take a demo, take a look at Clio, come work through us. We can get you in with some special pricing and then help you plan it out. We can help you plan through training if you're coming off of one software and into Clio. Reach out to us because we've got lots of expertise in this area. We've done many files. It's not always easy to do it without our help. We want to make sure that there's some good practices in there to make sure everything balances out when they take out of one software and bring it into Clio. We want to make sure the balances align. So thank you for watching. If you have an automation tip, please share it with us wherever this video lands in YouTube or in Facebook or any of the other platforms. I'd love to hear from you in the comments and subscribe for more legal firm tech tips. So we'll see you all next month. Bye everybody.
