Every contingency-based or litigation-heavy law firm experiences it at some point, the rollercoaster of income that comes when major cases resolve all at once. Not chaos, not disorganization. These are sharp, well-run firms that know exactly what is happening when a big settlement closes. But when multiple seven-figure cases wrap in the same quarter, the rhythm of the year changes.
 

Two personal injury firms we work with recently went through this. Each closed several large cases within the first few months of the fiscal year. One had a $3.5 million settlement, another close to four. Their firm’s portion came in around $1.3 to $1.4 million each. Then, within weeks, another round hit: $600 thousand here, $160 thousand there.
 

That is a remarkable start to the year.
 

These firms did not panic. They immediately began asking the right questions: What does this mean for distributions? For taxes? For cash flow? Those wins create flexibility and breathing room if the planning keeps pace with the results.
 

Seeing the Wave Form Early
 

From a bookkeeping perspective, the first signs of a high-income year appear in the IOLTA reconciliation. Large deposits start showing up, and that is when the real conversation begins.
 

When income arrives in waves, it stops being just about bookkeeping. It becomes about planning before the quarter closes. This is where collaboration with the CPA matters most.
 

The value of current books is not just in accuracy but in visibility. When your numbers are up to date, you can see the wave forming and start running different scenarios before tax deadlines arrive.
 

Sometimes that means exploring new structures, such as creating another entity for investment or operations. In those cases, we help stand up the books for that new entity from day one.
 

Other times it means reviewing overhead. If you are renting long-term and consistently profitable, it might be time to consider owning your space and taking advantage of Section 179 and 100 percent bonus depreciation while building equity.
 

It can also mean meeting with your CPA early to accurately forecast quarterly payments. When you already know it will be a strong year, the smartest move is not to chase deductions but to fund tax liability early so it never becomes a surprise.
 

That level of planning is only possible when the bookkeeping keeps pace with your results.
 

When the Timing Flips: Late-Year Settlements
 

The earlier those wins come, the better the runway for planning. But what happens when the big settlements land at the end of the year? If those same cases close in November or December, the picture changes. The income is still welcome, but the planning window is much smaller. Law firms cannot simply spend their way out of taxable income. They are not capital-heavy businesses, so there is no large inventory or machinery to offset profits with depreciation.
 

When you sense a major resolution approaching, you can still prepare. One of the most effective tools for late-year income is already available to many firms: retirement benefit plans.
 

If you have a 401(k) or profit-sharing plan, it becomes a legitimate, tax-efficient way to manage timing. The key is that these plans must be established before year-end, and often before September if you want to maximize them.
 

When that big settlement hits in November, having those systems in place allows you to make year-end contributions immediately for partners, employees, and yourself. This is not about avoiding taxes; it is about funding retirement and aligning income with purpose.
 

It also creates a natural withholding event that absorbs some of the tax impact without scrambling for artificial deductions. That kind of foresight separates firms that react from firms that plan.
 

Bookkeeping as Strategic Foresight
 

The best-run firms use bookkeeping like radar. They do not need someone to tell them whether they made money; they already know that. What they value is visibility: seeing how those wins affect taxes, distributions, and liquidity months before the year ends.
 

Traditional bookkeeping is about compliance. Strategic bookkeeping is about planning. One records history; the other helps you shape the future.

When those large settlements hit, we are the first to see them, and that is where the real value of clean books appears. It is not about transactions. It is about timing and foresight.
 

When your books are current, the decisions that follow are grounded in clarity instead of urgency. That is how firms turn a big year into a smart one.
 

Smoothing the Ride
 

Rollercoaster income is not a problem; it is proof of success. The challenge lies in managing timing and maintaining structure as revenue surges. Routine, ongoing bookkeeping turns those peaks and valleys into predictable patterns. Cash reserves build naturally, quarterly payments stay accurate, and tax season becomes a formality instead of an event.
 

At Chief Bookkeeping Officer, that is what we focus on. Not just clean books, but systems that make momentum manageable. When income moves in waves, the goal is not to flatten the ride. It is to build a better track.