As a technology-loving accountant, I am frequently asked for recommendations for software to do this or that, including the “perfect platform” for a business or law firm. The answer is: there isn’t one. There is no one size fits all answer to the question because law firms, like all businesses, come in different shapes, sizes, and they involve…gasp…people. But what if I was to try to design the perfect platform for a small law firm, maybe a solo practitioner or a couple of buddies who have gone out on their own after law school? What would it look like?

Before starting, it’s important to take a step back and look at the firm as a whole. What are the practice areas? How much time do the attorneys spend in court? are cases high volume with a faster turnover or do they last for months or over a year? The answers to all of these questions drive the recommendations for tools that can be put into place to maximize the attorney’s efficiency and billable hours.

Practice Management – It all starts with a good practice management system. No, a legal pad and sharp pencil don’t meet these requirements. The investment in the right software pays for itself many times over; this is not the place to save money. Many practices are moving to cloud-based practice management software. I like Clio because it is intuitive and easy to navigate, scalable, and has some good practice management tools. In addition, there is seamless integration with Google Docs, which takes the pain out of filing and finding documents.

Time Tracking – I’ve heard it said that the best time tracking methodology is the one that is used correctly and consistently.  Time tracking is a tough nut to crack, though. Done correctly, it can generate significant additional revenue for the firm in terms of billable time. Clio has time tracking functionality that is available also on the mobile version. Chrometa tracks windows, documents, and web pages that are visited throughout the course of the day. It provides reminders to record billing, and when I tested it out for my own practice I was amazed at how much time I was able to capture. Chrometa has a robust package that allows tracking on phones and tablets so attorneys on the go can use it out of the office. However, in my opinion the greatest value is for paralegals or attorneys who are generally in the office working on a number of cases on any given day. Chrometa integrates with Clio, so the best answer could even be a combination of Clio and Chrometa timekeeping, depending on the professional’s role in the firm.

Payroll – Even sole practitioners generally have an employee or contracted paralegal that works with them. I love Gusto for its simplicity, and their recent announcement of a 2-day lead time (down from 4 days) is a huge improvement. Ideally, the payroll solution should integrate with time keeping software, and Gusto does not integrate with Clio or Chrometa, so if there is a significant part time or contract component to the law firm, you might want to consider one of the Intuit products or another solution. For the majority of practices, Gusto is a simple, cost effective payroll solution.

Payables – I wrote another piece on some big law firm embezzlement cases and how helps mitigate an attorney’s exposure to misappropriation of funds. I still think that is a great answer for an attorney who would rather be working on billable cases than writing checks.

Financial Document Management – Accountants love Hubdoc. Attorneys love Hubdoc. That’s all. Check out this blog post for reasons why.

Billing – Clio has great billing functionality along with the ability for clients to create a secure portal to view and pay bills. This is a good solution, and with mass billing functionality, is much improved. Clio also integrates with QuickBooks Online and Xero, so billing can be done through one of those packages. The drawback to Clio is that clients have to create a user ID to access the portal, whereas invoices can be sent out electronically from accounting software and paid online. When it comes to collecting money from clients, simpler is better. I also prefer the sorting and export functionality in Xero, so Xero is my preferred method if I am doing the billing for a law firm.

Banks – I prefer larger banks. There is nothing like having everything automated, and then finding out that the regional bank used by the law firm doesn’t integrate with the GL package or Hubdoc, or doesn’t have check images available. I would rather poke a sharp stick in my eye than have to get accountant access to a bank account, download CSV files, upload them to the accounting software, and then have questions about the payees and proper classification for manual checks. Don’t underestimate the importance of selecting a bank with modern capabilities to maximize the accountant’s efficiency and minimize questions and back-and-forth between the accountant and attorney.

Credit Card Processor – There are several processors who know how to handle fees for an IOLTA account and offer competitive rates, an important consideration when people tend to pay large retainers or bills using a credit card. LawPay is one that is well known. I have also worked with SignaPay who has very competitive rates and several solutions including virtual terminals and functionality specific for law firms coming at the end of 2015. As the accountant, if I can influence the law firm away from a processor that isn’t law firm friendly, I will, both to save time for me and to implement safeguards against shortfalls in the IOLTA.

General Ledger Package – The selection of a GL package is driven by all of the selections to the preceeding considerations. Even if the firm is using Clio because it does all kinds of cool stuff, it’s definitely won’t do as an accounting package! The attorney who tries to manage the firm using a checkbook and Clio will run into trouble sooner or later.

Although I prefer working in Xero, there are some instances where QBO is a better option. One example is if the law firm is using a smaller bank that doesn’t have a reliable feed into Xero, I would look to QBO who doesn’t need to rely on Yodlee feeds for bank interfaces. Another example, is if there is a high volume of clients with monies in trust and the client wanted to maintain trust accounting in the accounting package rather than in Clio, Xero or QBO might not be the best option. In that case, I would get a separate subscription to either software package and maintain trust accounting as a separate entity. If trust accounting can easily be managed in the company’s accounting file, I love the reports that Xero produces; they are so clean and clear.

If you are an accountant helping with a law firm setup, or an attorney who would like to delve deeper into these considerations, please feel free to contact me.