Top 10 Reasons to Buy Legal Billing and Accounting Products
Although many vendors have excellent accounting and billing solutions, they often fall short of delivering what is needed to a law firm. Here are the top 10 reasons why.
- Task Based Billing – Ledes, Serengeti, Chubb and other auditors require special formatting of EDI bills. Failure to comply means failure to get paid by many law firms.
- Trust accounting – non-legal products do not understand the need to have a liability offset account on the Balance Sheet for funds that do not belong to the firm. Further, cash accounts in standard accounting packages do not understand the need to balance transactions for each client who has funds in trust for the attorney. Missing these key features can become a nightmare for a law firm.
- Retainer billing – standard accounting packages don’t address the variety of retainers collected by an attorney such as retainer to be billed at the end of the project versus a retainer to bill against expenses only. These and other creative uses of a retainer often create the need to generate manual bills in the law firm.
- Cash Basis accounting is not the preferred method of accounting for most companies. However, law firms report on the cash basis for the IRS and usually want to see their financial statements on the cash basis or modified cash basis.
- Modified Cash is a confusing term for most accounting programs, but a standard in the law firm with contingent fees and expenses.
- Productivity analysis is unique to compensation, incentive motivation and financial accounting in a law firm. The law firm model far exceeds the ability of other accounting programs to measure billable time, no charge time, do not bill time and value billing based on hourly standards.
- Invoice presentation is often the justification for the charges to the client and with hourly billing often serves as communication to the client or reinforcement of the work product. Long narratives and special formatting does not matter in standard accounting.
- Special features such as email delivery and saved pdf format of an invoice can be a huge time saver to a law firm for collections.
- Workflow process where bills are proofed, edited and then proofed and edited again are manageable in law firm accounting products.
- Tracking cash flow needs for client expenses as well as monitoring all outstanding client expenses is a concept unique to the law firm.