In this instructional video, Linda Artesani of Artesani Accounting and The Proper Trust explains how bookkeepers, accountants, and law firm owners should manage the unique financial and workflow requirements of personal injury (PI) practice areas. She outlines the limited trust accounting that only occurs at settlement, emphasizing the importance of tagging all expenses to the matter from the outset to avoid misclassifying costs as firm expenses. The discussion covers the need for robust document and expense tracking systems, recommending Dext for document capture, QuickBooks for accounting, and legal practice management tools such as LeanLaw (2‑way sync) and Clio (1‑way sync) to maintain matter‑level visibility, trust tracking, and metric reporting. Artesani highlights the high advertising spend typical of PI firms—especially billboards—and stresses tracking the source of client acquisition to assess ROI. She also advises monitoring profitability per case, attorney productivity (including non‑billable time), and detailed settlement sheet analysis, ensuring deposits clear before funds are distributed. Practical tips include verifying settlement deposits, understanding the typical one‑third/one‑third/one‑third split of settlement proceeds, and using the outlined tools to streamline workflows. The video directs viewers to a supplemental article for deeper detail.
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Hi there. Linda Artesani, Artesani Accounting and The Proper Trust. This week is all about personal injury attorneys, which go by the acronym PI. What is the differences in handling their records as a bookkeeper and accountant? And if you're the firm owner, what should you be looking for to see how things are— workflow is running well for your firm? So we've been going in every week to talk about the different practice areas, and personal injury is definitely unique. in the fact that there's not a lot of trust accounting. Really, the trust moment happens when the settlement comes in. So the matter would start out with the client coming in maybe with an injury. They sign an agreement with the law firm, however that is for their particular state. As a bookkeeper or the accountant, you want to see how that agreement is laid out. And then the case starts and goes on. And as the case goes on, you want to look at the expenses that are coming in because they should all be tagged by the matter. Any missed expenses become firm expenses because usually when you settle on a case, the case gets settled and the money gets divvied out, and then there's— that's the end of the matter. It's all done. So you wanna make sure that all those expenses are captured in the beginning. And those can be medical expenses, hearings, deposition, physical therapy. That's just a few of them. There's a lot of expenses involved with this particular practice area. The other thing to note about this is the matters go on for multiple years. So you really need a very good tracking system We like Dext. When we work with the bigger firms, we have them put the documents into Dext and then we have them uploaded. They push into QuickBooks and they upload into the legal software. Now, speaking of legal software, I've had one too many attorneys tell me, oh, my practice area, we don't really need legal tech software. That can be handled without that. Can it? Yes. Is it a time saver? Absolutely not. There's workarounds involved. As you all know, I've chirped about this enough every week that there's workarounds when you use QuickBooks alone. as a standalone, having a practice management tool like a LeanLaw or a Clio. Although they're not exactly specific to this practice area, they do work. LeanLaw has a 2-way sync. Clio has a 1-way sync, but it's a way of tracking the matter all the way through the workflow, tracking the trust. In Clio, you're gonna save the documents. There's a lot of benefits there. You want to have that software in place, mostly for tracking trust, but also for tracking metrics. This is a firm that you'll see a high amount of money put towards advertising. If nobody knows you exist, you're never going to find— you know, usually these people are in a place where if they've been in a car accident or another kind of accident, they're not spending a lot of time looking for an attorney. So you want something that will really find— people can find you. This is why you see them on billboards. You see a lot of advertising on billboards for this particular practice area. That's expensive. So you want to track how that is working. How did somebody find you? Same as all the other ones. How did they find the firm, which is going to revolve around multiple people inside the law firm tracking how people are finding you as well as putting the money on the billboard. The other thing that you want to track here is profitability by each case or matter. That's important. Attorney productivity is always important, especially in this type of practice area where a lot of times there's no tracking of the hours, but you really should. And with LeanLaw and Clio, you can track them and make them non-billable. But at least this way you'll have an idea. So what happens at this kind of a law firm is that you win the settlement, and then as the settlement goes along, you know, there's an agreement in the beginning. So it's usually a third, a third, and a third. A third, you know, would go to— you pay the expenses first, and usually it's divvied out between the attorney and the client gets the balance. But you want to read that document to know what's happening in the firm. As a bookkeeper or an accountant, you want to get the settlement sheet so you can properly Cost this out. Money comes in for $100,000. You want to see— it's usually some large amounts. Make sure that when you make the deposit, it clears the bank. Another big tip, because I've seen firms hurry that money through figuring it's from an insurance company, it's never going to bounce, and sometimes they bounce. You want to make sure that the firm has the money in hand. That's probably most of it. I've got a lot more detail inside the article that's with this video, so be sure to check that out as well. And I hope this is really helpful, and we'll see you all next week. Bye now.
