Using Legal Accounting Software to Increase Financial Security
As lawyers, you have an ethical obligation to secure your clients’ confidential documents, data and financial information. Being entrusted with highly sensitive information should never be taken lightly. Today, financial security goes beyond having locks on the doors and filing cabinets. The potential for loss permeates your law practice from end-to-end. From billing leakage to growing receivables, from fuzzy accounting compliance to misrecognized revenue, from bank statements that refuse to reconcile to outright fraud.
The most basic aspect of financial security comes down to the software and technology you choose to manage your law practice’s information. For the average attorney, technology might not be their forte, which is why it is important to consider a legal-specific technology that understands and can handle the serious security needs of a firm while assisting the firm to manage daily operations. Here are some of the features that should be included in any legal accounting solution.
A law firm acts as the fiduciary to many types of financial transactions. Making sure that the legal accounting software in place at your firm protects all of its data with the same level of security (256-bit SSL encryption) used by major banks and institutions is fundamental. Doing this ensures that all data will be encrypted when stored, protecting both your firm’s and clients’ sensitive information. Ask your software provider to see an independent security assessment of their software’s security to verify your security level.
Secure Logins For Your Team
Another security measure law firms should have in place is two-factor authentication. This ensures that all logins for members of your firm are secure, even in the event of someone stealing their login information. Two-factor authentication calls for a verification code to be sent via SMS to a mobile phone or email address, to ensure that the person trying to access your firm’s sensitive information, is in fact who they claim to be.
Practicing law depends on confidentiality. With user-level and role-based control, law firms can customize visibility among employees based on a “need-to-know” basis. Setting access by user for specific banks, financial reports, dashboards, matters, time entries, and viewing rights to calendars, tasks, and emails ensures that information doesn’t get into the wrong hands. Some legal-specific practice management software like CosmoLex can utilize a view-only access to selected sections of the application or limit visibility. This is the first step in guarding your practice against mistakes by employees and on a deeper level, security against fraud — protecting against people who should not have access.
Built-in Trust (IOLTA) Accounting Software
In the past, trust accounts were kept outside of a firm’s practice management system. This created many inefficiencies which lead to serious errors. For trust accounts, mistakes can lead to ethics violations and even disbarment. It’s important to find legal-specific accounting software that puts safeguards in place to protect your firm against common errors such as overdrafting, commingling of funds and check fraud.
With Great Legal Technology Comes Great Responsibility
Make no mistake about it, all the new technology available to attorneys can significantly increase their efficiency in managing their business. While this is true, it is also true that the reliance on these technologies can bring new security concerns. CosmoLex is built with the security and error prevention needed for lawyers in mind. Start making sure your firm is taking the right precautions to keep its data properly secured today.
For more information on this subject and more tips about improving your financial security, attend our special webinar on March 30th Top Ten Tips to Improve Your Financial Security.