Law Firm Accounting Software
All businesses need an accounting system. But law firms are unique, and have specialized accounting needs. Law firms have standard operating accounts. Law firms also need to track and bill time in a way that seamlessly flows to their accounting software. Law firms also have trust/IOLTA accounts. Depending on your jurisdiction, your firm may be required to maintain a single trust account for all clients, or a dedicated trust account for each client. To support and facilitate your firm’s accounting systems and requirements, you’ll need the right law firm accounting software.
When it comes to law firm accounting software, there are several different options that law firms can choose from. In this post, we’re going to talk about some of the most popular law firm accounting software options.
The Two Types of Law Firm Accounting Software
In general, law firm accounting software can be obtained in one of two ways:
- Dedicated accounting software – software that does accounting (and nothing more), and:
- Legal Practice Management software with accounting
Dedicated Accounting Software
Dedicated accounting software is just that—software that handles the accounting for your law firm (and nothing more).
Upside: The benefits of dedicated accounting software include:
- Good for firms that prefer to keep their case management and accounting separate
- Good for firms that don’t have legal practice management software (but still need accounting software).
- Generally, outside accountants and CPA’s tend to be more familiar with these “universal” accounting applications (including the ones we’ll cover next).
Downside: The drawbacks of using dedicated accounting software include:
- Separate systems – Your case management and your accounting will be in two separate applications. This creates more work for you and creates some level of disjointedness.
- More to manage – Having more software applications means more to manage, including software updates, maintenance and cost.
- Less visibility. Without everything being in one system, you’ll lose some visibility into the economics of your practice. What kind of cases are the most profitable? Which attorneys are bringing in the most business? This kind of intel is lost when you separate case management from accounting.