Expert Bookkeepers for Attorneys: Law Firm Bookkeeping
We specialize in law firm bookkeeping built around trust accounting. That means accurate 3-way IOLTA reconciliations, disciplined coding, and clean operating financials, delivered on a consistent monthly cadence with the controls your firm needs to stay compliant and make decisions with confidence.
How Chief Bookkeeping Officer Handles 3-Way IOLTA Reconciliations and Accurate Operating Books
The practice of law is a unique hybrid industry where strict fiduciary compliance meets the operational demands of a fast-paced business, creating a financial environment that standard bookkeeping methods simply cannot handle. If your current strategy treats client retainer funds the same as firm revenue, or fails to perform mandatory 3-way IOLTA reconciliations, you are operating with a distorted view of your firm's compliance and financial health. True financial clarity requires a partner who understands the specific operational levers of a law firm, from the ethical necessity of IOLTA trust accounting to the complexities of accounting for contingency fee settlements. Here is how Chief Bookkeeping Officer's specialized oversight differs from the generalist approach:
Chief Bookkeeping Officer's Specialized Law Firm Accounting
Generalized
Bookkeeping
Governed by State Bar Rules
We operate with familiarity with Rules of Conduct 1.15 (Client Trust Accounts) and common jurisdictional requirements, allowing us to proactively structure your books to prevent errors that lead to compliance issues.
While generalist bookkeepers are proficient in standard business practices, they may not be fully versed in the specific ABA and State Bar Rules of Professional Conduct.
Performs 3-Way IOLTA Reconciliations
We conduct precise, monthly 3-Way IOLTA Reconciliations, matching the bank statement, the trust ledger balance, and the sum of all individual client ledgers to ensure funds are never commingled.
Standard bookkeeping often relies on a simple 'one-way' bank reconciliation. However, most State Bars require a rigorous three-way reconciliation, matching the bank balance, the book balance, and individual client ledgers, to ensure every cent is accounted for at the client level.
Manages Advanced Client Costs as "Assets"
We correctly track advanced client costs (filing fees, expert witnesses, etc.) as firm assets until the client reimburses the firm or the case settles. This provides an accurate picture of the firm's true profitability and assets.
We have encountered traditional bookkeepers treating advanced client costs as operating expenses therefore affecting the profit and loss by artificially reducing income.
Tracks Retainers as Client and Settlement "Liabilities"
We correctly classify and track all client retainers and fee advances as client liabilities on the Balance Sheet until they are officially earned and transferred, ensuring compliance with Rule 1.15.
A normal bookkeeper might book settlement deposits and retainers as income on your profit and loss therefore increasing revenue inappropriately.
Expertise in Contingency Fee Accounting
We specialize in setting up the appropriate accounting structure for contingency fee practices, properly recording and allocating large settlements and firm expense recoveries to prevent unexpected tax liabilities.
With a standard bookkeeping service, your firm's QuickBooks Online may be set up inappropriately to handle the receiving of settlements and then the disbursement transactions related to settlements.
Specialized Bookkeeping Service Pricing for Law Firms and Their IOLTA Accounts
Managing IOLTA compliance and client funds demands a level of precision and consistency that cannot be subjected to the uncertainty of hourly billing. Our specialized law firm bookkeeping is provided on a predictable fixed-fee basis, structured around the complexity of your practice, not fluctuating hours. Plans that include mandatory 3-Way IOLTA reconciliation and full monthly oversight start at:
$699.00 per month
Our fixed monthly fee may change inline with your firm's matter and transaction volume.
Monthly Bookkeeping
Your firm’s financials stay organized and reconciled each month, giving you clear visibility into performance.
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Dedicated CBO overseeing your support and bookkeeping.
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Every transaction is reviewed and properly categorized.
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All financial accounts are reconciled each month.
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Monthly reporting delivered through Profit and Loss and Balance Sheet statements.
IOLTA 3-Way Reconciliation
We help keep your client trust balances accurate, compliant, and fully aligned across your bank statement, trust ledger, and client ledgers.
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Monthly IOLTA 3-Way Reconciliation reports prepared per California State Bar formatting.
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Client ledgers maintained via liability accounts in your book.
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Advanced client costs tracked via asset accounts in your book.
Catch-Up Bookkeeping
Need to rebuild your historical financials? For as little as $249.00 per month we clear past inconsistencies, and bring your books current with a reliable starting point for ongoing accuracy.
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Historical transactions reviewed, categorized, and brought current.
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Prior months reconstructed to establish accurate beginning balances.
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Inconsistencies and gaps in financial activity identified and corrected.
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Financial reporting every month.
What's Included in Our Legal Bookkeeping Services:
Frequently Asked Questions
Accounting for law firms, especially their IOLTA accounts, demands a higher level of specialization. We handle it with the expertise your practice requires, delivering accurate monthly books, proper three way trust reconciliations, and clear, easy to review reports. Our team understands legal bookkeeping. Here are the questions we hear most often from law firms just like yours.
MEMBER
What Attorneys Are Saying About CBO
"At any given time, my firm would have 100+ checks out in the wind just waiting for USCIS to deposit them. I was always so conscious of the fact that at any moment the government could draw down our account. If it wasn't for Marc making recommendations on how to improve our accounting processes, I would still be reviewing check discrepancy reports every single day. He doesn't just keep the books tight and reconciled, but he makes our business better."
"Look, yeah, I’m a lawyer, but I also have a CPA license. I know how to do my own reconciliation. But when the firm is settling 150 matters a month, I was losing literal days to it. Running back and forth between my negotiators and the case managers. Felt like I was losing money by not focusing on bringing in business. I called up Marc and within 2 weeks, reconciliations we're off my plate and the month-end process is just me signing a reconciliation report. Great job, thanks man."
Managing Partner of a Personal Injury Firm
Sherman Oaks, California
Lead Attorney of an Immigration Firm
Beverly Hills, California
The CBO IOLTA 3-Way Reconciliation
Most standard bookkeeping services only perform a "one-way" reconciliation, matching your bank statement to your software. For law firms, this is a dangerous shortcut that leaves you vulnerable to State Bar disciplinary action. At Chief Bookkeeping Officer, we perform a rigorous IOLTA Three-Way Reconciliation every month to ensure 100% accuracy between:
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The Bank Balance (Your actual cash on hand)
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The Book Balance (Your QuickBooks Online records)
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The Individual Client Ledgers (The sum of what you owe every client)
If these three numbers do not match to the penny, you are out of compliance. We provide the detailed reporting you need to prove every cent is exactly where it belongs, keeping your firm audit-ready and your license protected.
The CBO Advantage vs. Other Bookkeeping Providers
Most bookkeepers are built to simply record transactions and keep the books current.
Chief Bookkeeping Officer (CBO) is built to deliver something more: clarity, consistency, and confidence. We organize your financials based on how your business actually operates, ensure a consistent close cadence, and deliver reports specifically formatted for decision-making. We don't just categorize; we reconcile, validate, and strategically tie out every detail so your P&L and Balance Sheet are a source of unquestionable trust.
The result is a definitive advantage: fewer surprises at tax time, cleaner conversations with your CPA, and financial reporting that actively supports and drives growth, instead of just passively recording the past.
The Chief Bookkeeping Officer (CBO) Baseline
Questions to Ask Other Bookkeepers
Reliable Month-End Closure with Proactive Resolution:
We draft financial reporting within the first 7 calendar days of the following month. This delivery always includes a clear Open Items List for prompt finalization, ensuring questions and necessary adjustments are addressed during the close cycle, not delayed until year-end.
Close Timeline & Deliverables:
What is your documented month-end close timeline, and when should I expect draft financials? Does this delivery include a list of open questions, and how are open items determined?
Dual-Layered Quality Assurance (QA):
Work is prepared by one of our dedicated CBOs and then subject to a mandatory, senior-level QA review step before any reports are released. Clients can speak with both.
Quality Control & Personnel:
Who is doing the day-to-day work on my books, and who reviews it before reports are delivered? Can I speak with both if needed?
Regulated Practice Expertise:
We have proven familiarity with compliance-driven accounting requirements (e.g., IOLTA/trust accounting, complex revenue recognition), which is integrated directly into our workflow.
Compliance & Complexity:
What experience do you have with businesses that have compliance-heavy workflows (e.g., trust accounting, multi-entity structures), and can you describe your process?
Complete, Monthly Reconciliations:
Monthly bank/credit card reconciliations are mandatory here at Chief Bookkeeping Officer, including documentation and support for all balances and notable exceptions/adjustments.
Reconciliation Frequency:
How do I know you are looking at and reconciling my books every month? Are bank and credit card reconciliations completed monthly, and what does "done" include?
Best-in-Class Security:
All of our data and documents are stored in a centralized, secure, and encrypted portal with defined access controls, ensuring your financial information is protected and compliant.
Security Protocols:
How is access to my accounts kept safe? Where are my sensitive documents stored, and what are your retention/security protocols?
Upfront Flat-Rate Pricing:
We provide clear, flat-rate pricing up front for the defined scope of work. No hidden fees, no hourly surprises, and maximum budget certainty.
Price Transparency:
How do I know the price I am quoted isn't arbitrary? Is the scope of work clearly defined, and how often do costs change?
Chief Bookkeeping Officer Works with Your
Legal Software Tech Stack
With QuickBooks Online as the core of your accounting operations, Chief Bookkeeping Officer makes sure your practice management invoices and payments match real bank data, and then we clean up the friction points that cause bad reporting. That includes merging duplicate or inconsistently named clients/customers, standardizing naming conventions, correcting mis-coded transactions, and restructuring how costs are tracked so expenses don’t accidentally bury client costs, case costs, or reimbursables.
Stop Guessing, Start Scaling:
How a CBO Drives Real Law Firm Growth
Turn your financials into a scoreboard to see profitability by practice area and focus growth where margins are greatest.
Stop doing back-office work at attorney rates. Reclaim 10+ hours a month and put it back into billing and business development.
Finally, a P&L you can trust. We correct misclassifications and audit vendor spend so you see the true financial health of your law firm.
Law Firm Bookkeeping Case Studies
In legal practice, financial control isn't just about profit. It's about fiduciary duty and protecting your license. Review how we transformed unreliable trust accounts into clear, audit-ready books, giving high-stakes firms the confidence needed to focus purely on their clients.
The Stakes: A newly hired CFO inheriting books he couldn't trust and a culture of financial urgency.
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The Challenge: Reconciling a distorted view of the firm’s health where client funds and firm revenue were blurred.
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The Solution: Implementing a Dual-Layered QA review and restructuring the chart of accounts to reflect true operational levers.
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The Result: Moving from panic to precision by giving the CFO audit-ready financials to drive firm growth...click here to read more.
The Stakes: The September 15th Chaos where poor bookkeeping leads to massive, unexpected liabilities.
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The Challenge: A lack of monthly close discipline resulting in a scramble to finalize corporate returns under a looming deadline.
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The Solution: Establishing a consistent 7-day month-end close and an Open Items List to resolve questions in real-time.
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The Result: A clean hand-off to the CPA, turning a stressful tax season into a routine and predictable filing...click here to read more.
Mastering the Business of Law Firms
Deep dive articles and podcast episodes to help you navigate the complexity of law firm bookkeeping.
We walk through ten common, real questions law firm owners have asked during our initial bookkeeping consultations, from IOLTA reconciliation to reporting structure. If you’ve ever wondered how law firm accounting...
From missing 3-way reconciliations to misclassified trust transfers, small errors can create compliance risks. We walk through five more of common IOLTA mistakes and how disciplined processes prevent them before they happen...
Personal injury accounting isn’t ordinary bookkeeping and not every bookkeeper understands that. Here are the key questions PI attorneys should ask to ensure their trust accounting and financials are done correctly...
The State Bar’s new CTAPP program has many California attorneys feeling like the rules suddenly changed. The truth is the need for monthly IOLTA 3-way reconciliations, has existed since 1993.
An IOLTA is a requirement for many firms and the treatment of the funds it holds are highly regulated. Become familiar with common accounting mistakes for client trusts to prevent them from happening.
Launching a law firm is hard enough without wondering if the money side is quietly turning into a mess. This checklist walks you through the financial foundations such as entity, banking, trust accounting...
Law Firm Bookkeeping Articles and Resources
The Finder, Minder, Grinder model can unlock real growth for small and midsize law firms, but only if the money side of the equation is handled correctly. When your bookkeeping ties compensation...
Choosing who manages your firm’s finances is a high-stakes decision that determines whether you are building a scalable system or just managing a person. So what type of accountant should you pick...
The State Bar of California has officially launched its mandatory CTAPP compliance reviews, shifting from reactive discipline to a proactive "random audit" model that can cost firms up to $25,000...
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