Legal Trust Accounting

Trust accounting is a form of law firm accounting that manages client funds held in trust accounts. In the legal industry, trust accounting is governed by specific compliance rules that attorneys must abide by. For example, funds in trust accounts cannot commingle with money held in the firm’s general accounts. Additionally, any fees for storing trust account funds, like credit card processing fees, must be applied to the firm’s funds, not the client’s. Finally, law firms are required to provide detailed records of trust accounts, including bank reconciliations. 

Because the rules governing trust accounts are specific and complex, many legal professionals find it easier to use accounting software to help law firms ethically manage these complex accounts. However, generic accounting software, like QuickBooks Online, isn’t equipped to manage these accounts while ensuring compliance with legal standards. As such, the use of these products can actually create more work for attorneys and other legal professionals, since complex workarounds must be used to manage legal trust accounts. 

Legal practice management software solutions that include trust accounting software allow law firms to handle legal trust accounts with ease. CosmoLex’s legal trust accounting software was designed for trust accounts, with built-in features that ensure compliance with complex legal standards. Because CosmoLex’s legal accounting software integrates with its other functions, like practice management and billing, CosmoLex streamlines financial processes for firms, meeting law firms’ accounting needs while reducing syncing errors between programs or time spent performing duplicate data entry.

Trust accounting is important for law firms to understand because these accounts have different governing rules than other client accounts. If attorneys don’t learn to manage trust accounts compliantly, they may be at risk of a malpractice claim or even disbarment.  Fortunately, legal technology designed for legal teams using trust accounts can help small law firms, mid-sized law firms, and even large law firms handle trust accounts ethically and compliantly and save time and effort doing so.  

Leading software used by businesses in other industries isn’t designed with trust accounts in mind, so it doesn’t have built-in safeguards to prevent expenses from being pulled from the trust account or vendors like banks and credit card processors from accessing trust accounts. The best trust accounting software meets legal standards while saving attorneys time fulfilling the requirements for trust accounts. 

CosmoLex’s trust accounting software for law firms is packed with all the tools firms need to manage complex transactions for trust accounts. And the best part is: these trust bookkeeping tools work automatically in the background while users work on other tasks.  

To start, CosmoLex has built-in protection tools for trust accounting, like a stoppage on ledger overdrafts and fund commingling. Law firms can easily perform effortless trust reconciliations with our audit-ready tools that ease mandatory trust requirements. Running bank reconciliations, including three-way reconciliations, can be done in just a few clicks, and reports can be archived for security purposes. Finally, CosmoLex automatically provides thorough, complete trust financial reports, including trust account balance reports, trust ledger activity summary reports, and trust ledger transaction reports. Having these reports on hand ensures attorneys are always prepared in case of an audit.

CosmoLex is the top trust accounting software for a reason—we take the guesswork out of navigating these complex accounts and enable lawyers to feel confident in handling trust financial data. 

We get it, sometimes you want to try before you commit to a new practice management software, especially when your firm’s legal compliance is on the line. That’s why we offer a free 10-day trial of CosmoLex for interested law firms (with no credit card required) and schedule free demos for interested customers. The free trial offers all of the same functionality as a paid subscription, so firms can get a real taste of how CosmoLex maximizes profitability and boost productivity. 

 We want to ensure your firm is satisfied with our suite of comprehensive cloud-based software services, which is why we also offer a money-back guarantee if subscriptions are canceled within 90 days of purchase. With all-inclusive pricing and no long-term contracts, CosmoLex is the safe legal practice productivity solution you’ve been looking for. To see how your firm can use CosmoLex to become more profitable, fill out the interest form on our website and get started using CosmoLex today. 

CosmoLex’s highest priority is making the life of legal professionals more efficient, cost-effective, and compliant, which is why we have top-notch security features that keep confidential client information safe. We know attorneys are ethically bound to use secure software tools that ensure client confidentiality, which is why we take our commitment to cybersecurity practices so seriously. 

 To start, all data managed by CosmoLex’s legal practice management system, including case research, client demographic information, and messages sent on our secure client portal, are encrypted when entered into our system. We even store critical documents in an encrypted state, so no unauthorized viewers can ever obtain confidential information.  

We use bank-grade 256-bit SSL encryption standards to protect all data. We require two-factor authentication to be used by each CosmoLex user, to prevent unauthorized system access. Finally, on each account, security permissions can be customized, so only the appropriate law firm employees can access the necessary information.  

CosmoLex has received cybersecurity certification with our SOC 2 Type 1 attestation, which requires an independent audit of our security practices by a cybersecurity professional. This was a voluntary certification we pursued to further our cybersecurity practices and continue to serve our clients to the best of our ability. We also passed a threat assessment analysis test which was performed by leading cybersecurity expert Phalanx Secure Solutions, Inc. 

When you purchase a CosmoLex subscription, you access our free, in-house support. We’re available every step of the way to help law firms make the most of our supportive features. When many firms first partner with CosmoLex, they’re transitioning over from a different legal practice management software solution. We help firms safely and securely migrate their existing data with turn-key service, when requested, to ensure all data is transferred to CosmoLex successfully and without data loss. 

 Once law firms start using our system, our in-house support team is always available to provide training or onboarding or simply answer specific questions about our products and services. Whether your firm needs help understanding how to create invoices from time entries, set up custom workflows to enhance your project management, use our legal customer relationship management tools to convert more leads to clients, or generate actionable reports from your law firm’s accounting software, our team members are ready and available to assist you.