Law Firm Bookkeeping

When a law firm reaches out for bookkeeping help, the first conversation usually sounds familiar.
They are not sure if they need cleanup, they are unsure about trust accounting, or they have been told their books are "fine."

These are the ten most common questions we get from managing attorneys and firm administrators, and the answers that help them understand how legal bookkeeping really works.

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1. Can You Start on This Specific Date?

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It is the question we hear most often: "Can you start from this date forward?" Usually, the answer is probably not. Unless there is a verified reconciliation or reliable balance up to that date, we need to look back further. If your current operating or IOLTA balances are built on historical data, we have to make sure those numbers actually tie out. That often means going back to the start of the fiscal year, or in some cases, to the first still-open matter.
The goal is not to redo everything. It is to anchor today’s balances to something provable so your books mean something going forward.

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2. What Do You Need From Us to Get Started?

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Less than you think, but the right things. We will need view-only access to your operating and IOLTA bank accounts, including check images, live transaction history, and monthly PDF statements. If you use practice management software, we will need access there too.

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We also request copies of checks, deposit slips, disbursement sheets, and any client balance tracking you maintain, even if it is a simple spreadsheet. And if you have credit cards or payroll accounts, we will need visibility there as well. In short, we are connecting the dots between your bank, your books, and your clients. The clearer that bridge, the faster we can rebuild a complete financial picture.

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3. Can’t You Just Reconcile It in QuickBooks?

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We can, but that is not an IOLTA reconciliation. QuickBooks will happily let you "reconcile" even if client ledgers do not line up. A true three-way reconciliation matches three things:

• The IOLTA bank balance

• The client liability report

• The accounting records in QuickBooks

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If one of those three does not match, the reconciliation is not valid. Some firms prefer to keep IOLTA reconciliations in-house for confidentiality. In those cases, we handle the QuickBooks side while your internal team maintains the client ledgers. It is a clean split, and it works well when responsibilities are clear.

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4. What Makes Your Process Different?

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Experience and specialization. We do not just do bookkeeping. We do law firm bookkeeping with the understanding that IOLTA reconciliation is not optional. It is required.

 

Our process evolved from working with high-volume litigation and contingency firms that demand precision at scale.
We structure books to be practical and functional, not theoretical. Some accounting firms insist the trust account must live in separate books because the money is not the firm’s. That is true, but the account itself is part of the firm’s operations. You cannot understand business health if one leg of the balance sheet is missing.

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That is what sets us apart. We build systems that reflect the complete financial picture, operating, trust, and liability, accurately and compliantly.

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5. Once We Engage, What Should We Expect?

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It starts with a review. We will assess your current books, both operating and IOLTA, and identify what needs to be rebuilt or corrected. If your books are up to date, great, we will evaluate your liability tracking and chart of accounts. If not, we will begin by catching everything up to a clean, verified starting point.

From there, reconciliations are delivered on a set schedule. Every adjustment is documented, so you always know what changed, why, and when. The result is a transparent, repeatable process that gets more efficient with each cycle.

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6. What Do You Need From Me Directly?

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Not much, mainly approvals and insight. We handle tracing, categorization, and reconciliation. You will only review items that involve client funds before they are finalized, such as disbursement approvals, reissued checks, or adjustments requiring attorney sign-off. You do not need to live in your books, just stay available when judgment or authorization is required.

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7. Once Cleanup Is Done, How Do We Keep It Clean?

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The short answer: we do it for you. The only ongoing input we will need from your team are disbursement letters. If only a few matters close per month, monthly delivery works fine. If your firm closes dozens or hundreds of cases monthly, we will move to a weekly cadence. That rhythm keeps reconciliations current and eliminates the backlog that leads to trust account headaches.

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8. How Long Will It Take to Catch Up My Books?

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It depends on two factors: transaction volume and how far back we need to go. For a full fiscal year:

• A smaller firm with organized statements may take 2 to 3 weeks.

• A high-volume firm with missing ledgers or handwritten checks may take 2 to 3 months.

Expect a 1 to 2 week collaboration period where we will ask for clarification on unclear transactions and client balances. Once we have that information, the rebuild process moves quickly.

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9. We Have Money Sitting in IOLTA. Some Might Be Firm Income. Is That Possible?

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It is possible, but not common. In most cases, excess IOLTA balances represent old vendor payments, client overpayments, or uncashed checks. We occasionally find firm income there, but only after every client matter is verified as closed. Once reconciliations are complete, you will know exactly what belongs to the firm and what does not, with full documentation and proper transfers. In trust accounting, "probably ours" is not good enough. It has to be proven.

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10. If We Work With You, Who Do We Need In-House?

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A great question, and an important one. We do not move money or touch client trust funds. You will need an in-house team member, a case manager, administrator, or partner, who can sign checks, approve disbursements, and handle payroll. We manage the structure, reconciliation, and reporting.
You control the movement of money. That balance keeps everything clean, compliant, and secure.

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Closing Thoughts

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Good bookkeeping is not just about compliance. It is about control. When your IOLTA reconciles successfully and your ledgers align with your books, your accounting system does more than meet requirements. It supports decision-making.

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At Chief Bookkeeping Officer, that is our focus. A bookkeeping structure that holds up under scrutiny, and clarity you can prove. When your books are right, you do not just sleep better. You run better.