Like your fellow attorneys, you didn’t go to law school to become an accountant. That said, you can see how trying to handle accounting functions can get into the way of your true role of lawyer.

This is especially true in small practices that have limited human resources and a tight budget. Hiring a CPA for legal accounting services saves time and stress, allowing you to focus on your clients.

Increasingly Complex Nature of Billing

The proliferation of local competitors and Web-based services like LegalZoom and Rocket Lawyer pose serious challenges for small law practices. Prospective clients can now determine whether a quoted legal fee is competitive with a click of a mouse.

As a result, we see more law firms implementing new arrangements for fees and billing, such as flat fees or charging based on something other than the number of hours billed, all in an attempt to remain competitive. Managing these billing systems is complex but essential. A CPA is best qualified to maintain accounts receivable for your practice.

Unique Compensation Structures

A law firm that employs several attorneys will find that a CPA efficiently and accurately manages the calculation and disbursement of partners’ profit splits, including any fee allocations.

Likewise, outsourced accounting services are also useful in light of changes in the way law practices approach compensation structure for their entire staff, including full-time, contract, and temporary staff. Your CPA will also determine how best to allocate expenses related to staff, including payroll.

Legal Electronic Data Exchange Standard

In certain circumstances, law practices must submit all of their bills in the appropriate LEDES format. The penalties for failure to do so, or for doing so incorrectly, can include rejection of the bill. This requires resubmission, which takes up more of your valuable time. Clearly it is in your best interest to seek a professional guarantee that ensures compliance with these requirements.