Law Firm Bookkeeping

Personal injury and workers’ compensation firms face a unique bookkeeping challenge. Income comes in waves, often tied to settlements that close months apart. Expenses continue daily, case costs accumulate, and settlements must be tracked accurately between client funds, firm income, and reimbursed costs. At Chief Bookkeeping Officer, we help contingency-based firms maintain clarity through that uneven cash flow and keep every transaction properly recorded from trust to income.

Understanding the Flow of Funds

In a contingency practice, every dollar has a path. Case expenses are paid out of operating accounts, client settlements flow into trust, and distributions move to clients, vendors, and finally the firm. Our team manages that entire process inside QuickBooks Online, ensuring that:
 

• Settlement deposits are recorded to the balance sheet until funds are disbursed

• Client costs are tracked by matter and reimbursed accurately when cases close

• IOLTA transactions are reconciled monthly and aligned with client ledgers

• Fee income is recognized only when the firm has earned it
   

This structure keeps your books consistent with both your practice management software and your trust account records, minimizing the risk of errors or double-counting.

Designed for Contingency Practices

We understand contingency income, retainers, and hybrid fee arrangements. Our bookkeeping system separates earned and unearned fees, tracks advances and reimbursements, and keeps your balance sheet clean even when settlements cross multiple months. Whether your firm handles ten cases a year or hundreds, your reporting will show exactly where the money stands at any point in time.

Consistent Reporting, Predictable Insight

Each month, you receive a full set of financial reports that make sense for your practice:
 

• Profit and Loss Statements showing firm performance

• Balance Sheets reflecting case cost recovery and trust balances

• IOLTA Reconciliation Reports for compliance and verification
   

These reports give your firm consistent visibility, helping you manage cash flow and plan distributions confidently.

Why It Matters

When your books accurately reflect your settlements, costs, and trust activity, your firm can plan better. You can see which cases drive profitability, which costs are being recovered, and when income will be realized. Clean books mean fewer surprises and more control over your firm’s financial rhythm.

Start With Clarity

Partner with a dedicated CBO and bring structure to your firm’s financial process. We handle the bookkeeping and IOLTA reconciliation so you can stay focused on winning cases. Schedule a consultation below or call 213-286-7502.