Legal Accounting Software
Legal Accounting Software Buyers Guide
Last updated: September 25, 2022
Let’s face it: running a law practice comes with many challenges. From managing sensitive client information—that by law you’re obliged to keep confidential—to the accounting ramifications of billing per hour or task, it’s difficult to always stay on top of it all.
Legal accounting software is specifically designed to meet the demands of any law firm in terms of helping you stay compliant and safeguarding confidential client information. It also assists with tracking your time accurately so you can bill clients expediently.
This buyer's guide aims to assist you in making an informed decision regarding legal accounting software. We’ll also cover the important features to consider in any software solution as well as the cost attached to it. We hope in the end you’ll be able to make an educated decision regarding the best legal accounting software solution for your law firm.
Important Features of Legal Accounting Software
As a potential buyer it’s vital to ensure your software solution includes the following features:
- Tracking: Because law firms usually bill per hour it’s important to keep track of time to bill clients accurately. This function allows you to select the different billing criteria for each client, whether it’s task-based, retainer billing or a flat fee. It can also extract data from other applications you’re running in your organization such as document management and calendar scheduling. It ensures no gaps are present in your billable time.
- Invoicing and billing: It creates invoices according to the time logged by attorneys. Depending on your customization options it can allow you to personalize invoices that contain your logo and the client’s information. It sends invoices electronically and payment from customers can be done via EFT or through a credit card.
- Customer portal: Having a client portal included in your software solution allows clients to safely submit documents to you and make payments on the same platform.
- Customer management: In any industry, you'll find that customer relations rank as one of the most important functions. Your software solution should include some customer management capabilities to record client information and perform basic CRM functions.
- Scheduling: It's easy to lose track of time when your workload is excessive. This tool will help you manage your workload better by syncing your calendar. It will set reminders and alert you of upcoming deadlines.
- Trust accounting: The area of trust accounting is a bit more complex than general law. It requires specialized features such as tracking funds, designating agents and special fund allocation. The complexity of estate planning, handling a client’s fund or real estate requires software that can support dealing with all these entities.
- General ledger: A general ledger is the core repository for all financial accounts. It allows firms to control accounts receivable and accounts payable. It manages the bank reconciliation statement and assists with compiling the correct data for tax submissions.
- Reporting: The software must be able to create reports on the productivity levels of all the attorneys. It should produce reports on the client payment details and trust ledgers. The reporting should allow you to filter data according to specific fields of interest.
Important Considerations to Evaluate
When you evaluate the different accounting software solutions for your law firm, reflect on the following considerations before you make your final decision.
Ability to Integrate
Your law firm most probably has other systems already operational, right? It’s important to check that the legal accounting software can seamlessly integrate with your other systems. During the demo training session make sure you can assess how compatible the software will be with your existing systems.
Flexibility is key in any industry, even in the legal profession. The trend to work remotely is also prevalent in law firms. Because law firms usually bill per hour it’s important to check with your software vendor whether you’ll be able to work remotely and perform key functions off-site. Test the mobile apps available and check the speed off-site compared to working locally.
It’s important to get assurance that your data will be handled securely and that adequate security controls are in place. Law firms work with sensitive client information so the security of client data is non-negotiable.
The Costs of Legal Accounting Software
The cost will always remain a major consideration when opting for accounting software. Software solutions are usually offered in two ways. The one method is to pay a monthly subscription to the software vendor for use of the software. That means the software doesn’t belong to you because if you stop paying your monthly fees access to the system will be revoked.
The other option is to buy a perpetual license which allows you to pay a lump sum upfront to use the software indefinitely. You're only responsible to pay fees for software updates and ongoing support. The cost is also determined by the number of users and the different features you want included.
To get the exact cost you should contact your preferred software vendor directly to quote you based on your firm’s unique requirements. The cost of some software solutions can start as low as $10 per user per month and increase to $200 per month. Some start-up costs may also be included if you opt for a monthly subscription depending on the solution you select.
Finding the right software solution isn’t easy but knowing what to look for helps you get closer to finding the right fit. Many software vendors allow a free trial to test the software in your environment. Make use of the opportunity to test it in real-time.
Remember to evaluate all the key features we've listed and you can consider the different ways to deploy the software in your law firm. Share some of the reasons why you’re considering investing in legal accounting software.