What steps should I take when recording a client payment?

CosmoLex Team

The steps your law firm should take when it receives a client payment depends on the bar rules of the jurisdictions where you practice. Some states allow attorneys to place client overpayments in the attorney’s operating account and track the overpayment as an operating retainer. But in many jurisdictions, when a client overpays on an invoice, the attorney must either … Read More

Can general accounting programs like QuickBooks allocate legal payments?

CosmoLex Team

Most specialized and general accounting programs are able to allocate partial payments between cost advances and fees shown on the invoice. Some state ethical rules, however, require law firms to allocate partial payments to reimbursed cost advances first and attorney fees second.[1] General accounting programs like Quickbooks® automatically allocate partial payments proportionally between each line item shown on an invoice, … Read More

What is PCI compliance and why is it important?

CosmoLex Team

In 2006, due to the increase in credit card fraud, the major credit card companies (VISA, MasterCard, Discover, and American Express) decided to develop uniform standards that merchants must follow if they accept credit cards from clients.[1][2] These Payment Card Industry Data Security Standards (PCI-DSS) are designed to ensure the security of your client’s , before, during, and after you … Read More

Can I use a general accounting program like QuickBooks for timekeeping?

CosmoLex Team

Many general accounting programs like QuickBooks allow companies to track the time each attorney spends billable activities for a given client.[1][2][3][4] You can then use the time entries to generate an invoice.[5][6][7][8] References 1. Time Tracking Invoices in QuickBooks 2. Tracking Time in QuickBooks Desktop and Online: The Differences 3. Tracking Time in QuickBooks 4. Accounting Software just for Law … Read More

Can I use a general accounting program like QuickBooks to track reimbursable costs?

CosmoLex Team

There are two types of reimbursable costs, and . Soft costs are those costs that the client’s fee agreement allows your firm to bill for even though your law firm doesn’t write a physical check to a vendor for the item. These include items such as copies, general postage, facsimiles, etc.[1][2] Hard costs are those costs attributable to a specific … Read More

Can a general accounting program like QuickBooks apply complex rate structures and non-traditional fee arrangements to invoices?

CosmoLex Team

Most general accounting and billing programs do not have the ability to apply complex rate structures and non-traditional fee arrangements when creating invoices. Quickbooks, for example, will allow your law firm to set up different billing rates for each employee or for specific matters or tasks, but only in the Professional or Accountant versions of the software.[1] In the lower … Read More

Can I use a general account program like Quickbooks to bill legal clients?

CosmoLex Team

Even though general accounting programs such as Quickbooks were not specifically designed for legal billing, law firms can still use these programs to create legal bills that show the date, time spent, a description of services, the rate per hour, and calculate the total amount charged for each entry.[1] Some of the more sophisticated desktop accounting programs even allow employees … Read More

Do I need to track my time for a contingent fee case?

CosmoLex Team

Contingent fee arrangements occur when a law firm provides services to a client in exchange for a percentage of future recovery in the matter. Because the law firm doesn’t collect a fee unless the client receives a recovery, and because the fee collected is a percentage of the total recovery, law firms generally do not send out monthly invoices to … Read More

Do I need to track my time if I charge my legal clients a flat fee?

CosmoLex Team

Flat fee arrangements occur when law firms provide specific services to a client for a one-time fee, no matter how many hours the attorneys spend on those services. Many law firms attempt to streamline their law firm practice management by moving to fixed fee billing. The idea is the less time that attorneys and staff spend tracking their time or … Read More

What is the difference between a hard cost and a soft cost for a law firm?

CosmoLex Team

A hard cost, also known as a direct cost, is one that is paid directly to a vendor on behalf of a client for services provided in association with a specific client matter. [1] Hard costs typically include court reporter fees, filing fees, mediation fees, hearing transcript fees, etc. Good law firm practice management, through the use of a legal … Read More