Key Performance Indicators, or KPIs, are critical metrics for evaluating company performance. They inform decision making and draw attention to areas that need improvement. For law firms, KPIs: Monitor firm health Simplify decision making Record successes Highlight problems Law firms can monitor KPIs to evaluate firm operations, business development and intake, performance and efficiency, and […]

Whether a firm is a new solo practice or an established AmLaw 100 firm, a law firm needs to have at least three bank accounts. These bank accounts should include: A business operating account. This account(s) are designated for practice income and expenses. If you’re audited, you would provide records for this bank account. A […]

Bad debt is when a customer won’t pay their bill and you can’t collect it. It’s frustrating but you don’t have to take a total loss on bad debt. You may be able to take a deduction for them. However, there are caveats to this. To write off bad debt, it must meet several requirements. […]

When it comes to handling your law firm’s finances, your practice benefits from hiring experienced financial professionals. But while you’ve likely considered – or already hired – an accountant, you may wonder if you also need a bookkeeper. “Bookkeeper” and “accountant” are terms that are often used interchangeably. But while there is overlap in their […]

When your clients have invoices that have gone unpaid, even after a couple of reminders, it’s important to set a consistent internal policy when it comes to how these past due accounts should be handled. Having consistent expectations makes this difficult job a little easier. When resolving past due bills, remember that there may be […]

When clients repeatedly fail to address an outstanding invoice, you have to evaluate all your options for collecting the debt. First, you’ll want to be familiar with the laws and ethics rules in your jurisdiction. You want to have the client settle their account, not run afoul of the law yourself. The scope of some […]

To reduce their tax liability, law firms should seek deductions where possible. Business tax is determined based on the profits of a company, with the actual tax rate determined by the entity type. While there are additional considerations for lawyers as to what can be deducted depending on their entity structure (sole proprietorship, partnership, limited […]

Maintaining compliance is a must for any firm that wants to keep their clients happy, avoid issues with their bar association, and run an ethical, efficient practice. The stakes are high in the legal industry, where violations can result in disciplinary actions, including sanctions and even disbarment. To avoid this, law firms must be dedicated […]

At the end of each year there are various financial reports law firms should have to be in compliance and have the data they need to make strategic decisions for the following year. Accounts Receivable and Collections Reports Make sure all time and billing is up to date. For invoices that are past due, create […]

Many plaintiffs are surprised to find their settlement funds are taxable. The amount and whether or not the funds are entirely taxable is dependent on several key items. Lawyers who are responsible for providing clients with a settlement sheet, so it’s important to keep this in mind throughout the process. Key items to note include […]