A Growth-oriented Approach Adopted By Law Firms as They Embrace Cloud Technology.
Legal firms and communities have been looking towards Cloud as a promising technology for long to cater to their challenging business requirements. As a result of this soaring demand, multiple Cloud solutions are being made available. However, the need of the hour is to find integrated solutions that can cater to all the major & minor requirements of a law firm.
Most people might think that welcoming a new technology would be the first choice of attorneys. However, that is not the case as attorneys have been so far a bit conservative and they have also been slow to accept the changes in technology.
As per the American Bar Association (ABA), technology is a key skill in maintaining competence. ABA advices lawyers to stay abreast of the changes in law and its practice and this calls for being aware of the benefits & risks associated with a specific technology.
As far as embracing Cloud is concerned, law firms have shown a gradual yet positive technology shift that will lead to better returns in the coming time.
Major Accounting Requirements for Law Firms
It’s a must for Trust accounting to be compliant with regulations of each state. Attorneys must be able to do following –
● Produce individual client ledgers
● Provide correct reporting of trust funds
● Prevent client ledger overdrafts
● Maintain an audit log
Workflow for legal accounting is quite unique as compared to other service businesses. The Legal specific chart of accounts comprise the ones that are designated specifically for law firm accounting. Fee advances should be managed in form of liabilities and should not be treated as “deposits.”
All hard and soft costs should be included under matter cost accounting. Incorrect internal accounting procedures can’t capture such costs and hence result in loss of revenue for the law firm. In few cases, there may be consequences related to tax and ethics compliance too.
Business accounting, also referred sometimes as the back-office accounting, handles the remaining business of practicing law (including payroll, rent, and utilities).
Back office capabilities were not included in most legal specific accounting software. Law firms had to use a separate generic accounting software for the same.
What All Helps a Law Firm to Competently Manage Workflow?
Effectively managing the workflow is a big challenge for law firms. Following is essentially required by them in this regard –
Practice Management System
Attorneys are supposed to coordinate each & every aspect of their client’s “case.” It thus calls for easy availability of documents, evidence, all forms of communications like emails. It also requires meeting all deadlines and handling court appearances suitably.
With the help of a state-of-the-art system, attorneys would get easy access to documents storage, communications & client portals, integrated research applications, and task organization.
Time & Billing System
Typically, attorneys designate billing of a specific matter in one of three ways including contingency, fixed fee, and time. Frequently keeping track of their time in these three types is quite usual for them.
However, it’s required for attorneys to track time in order to defend any sort of challenges to the fee. A proper time & billing system should offer highly reliable & contemporaneous billing, account of all expenses and the ability to quickly email bills to clients.
As mentioned before, Trust accounting, Legal accounting, and Business accounting are the three major accounting requirements of law firms.
Out of these, trust and legal accounting requirements can be handled by few generic accounting software solutions, provided they are customized properly for the same. However, many of such generic software don’t meet compliance standards and hence are not best suited for use.
Way above these generic accounting software, QuickBooks has proved its mettle when it comes to being the best legal accounting software for your law firm.
The accounting software comes with a number of incredible features that make legal accounting processes much simplified and quicker for law firms. QuickBooks allows you do following –
● Track trusts & expenses
● Invoice for legal fees as well as reimbursements
● Organize all your financials in a central location
Considering the benefits Cloud hosted QuickBooks brings along, it becomes a highly favorable decision for law firms to go for QuickBooks Cloud hosting. Hiring a QuickBooks hosting services provider thus becomes a necessity.
Cloud has definitely brought things in the right place for law firms who have embraced it already. So, the time has arrived for every law firm to go for it without further delays.