Most solo lawyers struggle with the everyday management of their firms. When it comes to solo law firm bookkeeping, hiring experienced financial professionals can be the difference between success and struggle! If you’re a solo lawyer, you’ve likely wondered whether you can – or should – hire a bookkeeper. Bookkeepers can provide a more hands-on, detail-oriented perspective to your law firm. They can also oversee your financial transactions, reconcile your financial statements, and provide critical office support to help lawyers like you succeed!
Below are some of the main benefits of partnering with a bookkeeper for solo lawyers.
1. Time Constraints
Keeping good accounting records requires time and diligence. As a solo lawyer, time management is likely a sticking point for your firm. A good way of addressing this time issue is to hire a solo law firm bookkeeper to assist you. A bookkeeper will help you streamline your accounting and adhere to a schedule that works for you!
If you’re hesitant to hire a bookkeeper, you should at least create an accounting plan. As part of your plan, you should look over your finances each week, making sure that your expenses and revenues are up-to-date and accurately reflect your business activities for that week. This is time-consuming but necessary for all law firms – regardless of size!
2. Cash Flow & Collection Issues
Professionals with experience bookkeeping for solo lawyers can help identify issues with cash flow. This can give you a current picture of your accounts and, in turn, enhance your law practice’s profitability! If your bookkeeper finds an upsurge in accounts receivable, then you can take an opportunity to change your firm’s fee structures, thus minimizing your firm’s exposure to bad debt.
A bookkeeper can also reveal flaws in your collection methods. Collection issues are especially common for solo lawyers. You may not practice consistent invoicing, or your clients simply may not be able to pay their bills on time. With a bookkeeper, you can bill your clients regularly, address any bad debt, and even secure some tax savings!
3. Error & Fraud Risk
While data suggest that fraud is rare among small law firms, there is still the potential for fraud. Accounting errors can prove costly! Even if you use practice management software, partnering with a small law firm bookkeeper can help you prevent any human error. Bookkeepers like Legal Ease Bookkeeping can help you prevent error and fraud by monitoring all cash and e-payments, ensuring all accounts remain separate, and even reviewing your audit reports!
4. Legal & Ethical Issues
Because lawyers will inevitably handle their clients’ money, you are obligated by law to safeguard your clients’ assets. For example, you may be the temporary custodian of a client’s settlement payment, or you may receive an initial retainer deposit before actually completing any work on behalf of your client.
As a solo lawyer, it’s even more important for you to properly account for your clients’ money. A bookkeeper can help you establish clear rules and policies for how your law practice handles clients’ assets. A bookkeeper can also help you stay informed of your state and local bar associations’ rules regarding client trust accounts.
Do Solo Lawyers Need a Bookkeeper? We say yes!
Solo lawyers often struggle to give both their clients and their books the time and attention they each deserve. The level of commitment you give to each has a huge impact on the long-term growth and success of your law firm. Bookkeepers for micro firms and solo lawyers can provide you with meaningful insight and guidance – all while empowering you to focus on your clients first and foremost. By outsourcing your bookkeeping early on, you can think strategically about the future of your firm, and enable it to transcend the limits of a single lawyer!
