In this video, Linda Artesani of Artesani Accounting and The Proper Trust outlines the specific accounting challenges and solutions for family law firms. She explains that family law practices typically handle a high volume of transactions, often using an accounts‑receivable (AR) workflow rather than a trust‑based workflow, because many services are billed immediately after a consultation or are packaged as flat‑fee bundles (e.g., simple divorce, mediated divorce). Artesani emphasizes the importance of using practice‑management and accounting software—particularly Clio, LeanLaw, and QuickBooks—to automate service segmentation, track profitability per service, and avoid manual, error‑prone spreadsheet work. She discusses bundled pricing, the need for clear change‑order communication when a client exceeds a purchased hour cap, and the critical role of client experience (the "finder‑minder‑grinder" model) in generating referrals and maintaining firm reputation. The talk also covers meticulous expense tracking (mediation fees, filing fees, etc.) and proper trust accounting to prevent client dissatisfaction caused by surprise large bills. Artesani recommends adopting Intuit merchant services to allow credit‑card payments for clients in crisis and offers data‑migration services for firms still using antiquated systems. Overall, the video provides a roadmap for family law firms to streamline accounting, improve profitability, and deliver a smoother client journey.
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Hi there, Linda Artesani, Artesani Accounting and The Proper Trust. We're going to start now into a series of the differences or nuances with accounting with the different practice areas, and we're going to get into family law, estate planning, personal injury, which is always interesting, even litigation attorneys. So we've got a few practice areas that I want to dive into, and I'm going to break out In accounting, what's the best practices and what are the best workflows for each? And what's the best way to work around all of this to make it profitable for your firm? So this week we're going to dive into family law. What are the nuances with family law? Well, family law firms tend to have more transaction volume. There's more similar amounts coming into the law firm. Sometimes it's an AR-based workflow because the attorneys are actually doing the work and then charging for it after the fact, or they're doing it on the same day like a consultation. So there is not a trust moment happening. So they're not collecting retainer and having that be applied. So we're looking at like maybe a child custody case or in family law, we see a lot of divorce. There's many different parts of family law that you might want to segment out and track. And this is where Clio and LeanLaw become pretty pivotal because otherwise you have to actually create an item in QuickBooks pointing directly to that sub-income account to make it work for your practice. There's a few ways around all that, but if you're going to do the manual route, it's definitely going to be more steps because you're going to need to know which, which item to use. And you can use recurring transactions, or we used to call them memorized transactions, where you're actually able to create little scenarios for each one. A lot of family law practices we see today don't rely so much— they still track their hours, but they really sell their services in a package or a bundle. So simple divorce is X, medium is X, mediated divorce is this. So we'll see a little bit more of that menu style type with not hours not to exceed X. And we, we can do a lot of that right inside of, for example, LeanLaw, the app that I like to use, the software that I like to use. I shouldn't call it an app because it's really not an app. But we see that we can actually cap that off. So if we hit and trigger into the next level, then you'll have to let the client know. And we recommend you let the client know with just almost a change order type scenario. So you're able to let them know, You've completed the amount of hours that you purchased and now you're moving into, you know, how many hours— every hour over is a specific amount. So they're aware that they've reached the max. If they have trust accounting, some of the law firms we work with do use trust accounting. They take a retainer upfront and then that retainer gets applied. A lot of the attorneys with divorce sometimes don't keep the client in the loop when it comes to this, and they end up— Really doing more, just taking the retainer, and then they bill the client right before the matter goes to court to be finalized. Not a great practice. It ends up with very upsetting— you upset the clients. You're not having that client-happy experience when you do it in that fashion, because most of the times they use the entire retainer, and now they're looking at faced with a big bill and they have to pay it, or their divorce won't be filed. Typically with a finalized divorce, it can be pretty— it's a stressful time. Anything to do with family law tends to be really stressful. It's always in a crisis mode with the clients, so you have to walk on eggshells. And really, the client experience is what's going to make a family law firm succeed. And that's when we like to get into the finder, minder, grinder. The minder position is really critical in making sure that that client experience throughout their whole journey with a law firm is successful because this is definitely a practice area where you're going to see referrals. And, you know, if somebody had a— not a happy divorce, but a happy divorce experience where they got the results they were looking for, maybe they were able to come to a place where they're able to— you know, usually in the beginning of a divorce it's difficult, so they can end up getting to that point where they're actually reasonable about dividing up the Belongings that they've accumulated throughout the marriage. So that's kind of part of the experience. There's obviously other parts of family law, but that's the big one that you see a lot of transactions surrounding. So definitely, if you have practice areas, you want to have that broken out in different places. You don't have to if it's just family law that your firm is doing and you're not doing a little estate planning on the side. You want to just have it all go into legal services and really start to track that. If you're not using software, use the products and QuickBooks. If you are using the software, that will be tracked for you, so you'll be able to see the profitability per service that you're selling. Remember, lawyers sell a service, they sell an experience, and it's important to provide a great experience along the way. I think that's probably all the tips I have. That's just most about client experience throughout. Managing the expenses and the client costs is critical. This is why we really talk about software so much because software is very, very important when it comes to tracking the expenses and making sure that you're billing them all back to the client. There could be a lot of expenses along the way— mediation, hearings if you get into that with family law, you'll have filing fees. There's a lot of places along the way that you're going to have these client expenses, whether the law firm's paying for it or if your state allows they're paying directly out of the retainer. You want to track that perfectly. If you have trust accounting involved, that's where you really want to put your heart and soul into that software. It's well worth it. Just had a conversation the other day with a client, and having that discussion about how much is it costing you to track everything in a spreadsheet and then copy and paste it over, and what if something gets missed? And that's something that gets missed, whether it's part of the time that the attorney worked Or it's an expense missed, that's all going to become firm expense. And that's where you're going to start to see the profitability drop for a law firm. So it's really important to have Clio or have LeanLaw set up in your firm and make sure that you're using the software in the right way. If you're not using it, or if you're using a spreadsheet and you're like, you know, Linda's right, we really should be moving to a more automated system, especially if you're seeing your firm grow and you're adding more and more attorneys, you don't want them doing it all on a spreadsheet. They probably won't have the same invested interest in tracking and making sure everything gets on an invoice. That's when you really want the software. It's really worth the price, not to mention the time that you're going to save in using software over these other pieces that you're cutting and pasting and putting together. It's definitely worthwhile having the software when you're working with law. And even with us, we use it for us, our, our, in our industry, the accounting industry. We've got apps that we use and we invest in. It's just as critical for a law firm to do the same. So I hope that's helpful. There's a lot of transactions. If you're a family law firm that has a lot of accounts receivable, I highly recommend using Intuit's merchant services and having the ability to pay by credit card. People in crisis, they didn't need to pay you right away, but they don't have the money, but they'll have the credit card. So that's the other piece of advice. I think I got everything. I'm sure there's something I'm forgetting, but those are the main critical things for family law. And if you have any questions, comments, please feel free to reach out. If you need help with your firm and you're in a system that's just antiquated and you want to move forward, data migration is our specialty. So reach out. And on that note, I hope you all have a wonderful, wonderful week. Bye now.
