Law Firm Finance

Outsourcing your accounting provides access to the latest and best accounting software, which saves costs because you don’t need an in-house finance team and all the expenses that go with it.

Instead, advanced software like Sage Intacct, Sage 300cloud, and FloQast provides all the ERP, HR, and payroll functionality you need to maintain accurate financials, dive deeply into metrics, and generate board-friendly reports.

Our modular-based systems ensure you only pay for specific software tools that enable you to reach your goals. This outcomes-based approach optimizes existing systems and adds modules for sustainable growth.

Guaranteeing regulatory compliance is another important benefit our suite of cloud-based software provides. The system keeps you up to date with evolving compliance requirements, which is particularly important if you operate across borders.

Basically, in addition to regulatory compliance, your firm also benefits from trust accounting management and tax planning. Finally, our systems are designed with risk management in mind, including fraud prevention and data security.

In South Africa, trust accounting is governed by the Legal Practice Council (LPC), under the Legal Practice Act 28 of 2014.

The Independent Regulatory Board for Auditors (IRBA) sets compliance standards, which include:

• Annual Trust Audits: Trust audit reports are sent to the IRBA to determine compliance.
• Record Keeping: Maintain accurate, detailed accounting records, including transactions.
• Segregation of Funds: Trust accounts must be separated from your firm’s accounts. This maintains the integrity of clients’ money and ensures no one accidentally dips into the funds to manage your firm’s expenses.

It’s important to note that if your firm operates internationally, local trust accounting rules apply. For example, if you have locations in the US, your trust accounting must be IOLTA compliant, which includes a rigorous “three-way reconciliation” process every 30 to 90 days.

We use best-in-class cloud-based accounting systems, like Sage Intacct, as the foundation for legal financial management. Digital integration and automation surpass legacy (analogue) accounting methods that rely on manual data entry and exports. This is important because it eliminates human error, saves time, and ensures consistency across your firm.

The benefits of cloud-based software include:

• Real-time visibility provides access to data from anywhere with an internet connection. You can then make informed decisions even when you’re not at the office.
• Bank-level security protects sensitive client data from cyber threats.
• Integration with other practice management tools (case management, payroll) creates a unified system that enhances billing, expense tracking, and reconciliation.

Integration also eliminates data silos (limited visibility) and bottlenecks for an uninterrupted workflow.

KPIs are essential when it comes to measuring your law firm’s financial performance. It’s only when you have accurate information at your fingertips that you can make good decisions that drive profitability and growth.

However, there are a lot of KPIs relevant to legal practices, and it’s easy to fall down the rabbit hole, tracking analytics left, right, and center.

It’s better to be more precise and only set the KPIs that will make a tangible difference to your performance. Typically, these include:

• Utilization Rate: The percentage of an attorney’s billable hours within total hours worked.
• Realization Rate: The percentage of billable hours collected as revenue.
• Productivity Rate: Combines utilization and realization rates to determine how successful attorneys are at generating income for your firm.

Add Work in Progress (WIP) and Accounts Receivable (AR) to the mix, and you’ll see where you can optimize fee structures, staffing, and performance bonuses.