When should my law firm outsource bookkeeping?

CosmoLex Team

Bookkeeping means recording financial transactions—and it’s distinct from accounting, or the active keeping of financial accounts. So, how do you know if your law firm should outsource your bookkeeping? Below, we’ve shared a few common scenarios that indicate you should consider outsourcing. If you’re putting off tasks If your bookkeeping falls behind, it can be really hard to get back … Read More

What expenses are tax-deductible for law firms?

CosmoLex Team

As we approach tax season, it’s time to start thinking about—and gathering the paperwork for—expenses that are tax-deductible. We’ll review some of the most common deductions for law firms. Convenience fees For lawyers who accept online payments, including via credit cards, the convenience fees are tax-deductible. While this used to be a rarity, accepting online payments has become increasingly common … Read More

How Should I Pay Myself from My Law Firm?

CosmoLex Team

When it comes to paying yourself from your law firm, your options are determined by how you choose to structure your business. Draw payments Some law firm owners pay themselves with draw payments. This means you’re choosing to pay yourself a portion of your firm’s profits. How much you pay yourself and how often is up to you. Sole proprietors … Read More

Does my law firm have to pay sales tax?

CosmoLex Team

Many states charge sales tax on tangible personal property, but increasingly, some states are also charging sales tax on professional services. And others don’t charge sales tax at all. Are there all kinds of weird rules and exceptions? You bet. Know your state laws First, you need to know your state laws. At present, Hawaii, New Mexico, and South Dakota … Read More

How much should our law firm be spending on staff and general overhead?

CosmoLex Team

Running a business requires frequent tinkering with the balance between expenses and income. And yes, a law firm is a business. So, how much should your firm be spending on staffing and general overhead? Understanding overhead costs Among law firms, overhead generally refers to expenses minus attorney salaries, and sometimes minus paralegal salaries.[1] Overhead can include everything from the office … Read More

How Can Our Law Firm Create a Budget?

CosmoLex Team

Creating a budget doesn’t just help you better understand your firm’s finances  — it helps you plan ahead. A well-considered budget lets a firm make informed decisions for the year to come and relieves some stress around when money can or can’t be spent. Follow these steps below to create a budget for your law firm. Decide on your expenses … Read More

ABCs of Law Firm Financials (10:31)

CosmoLex Team

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What financial red flags should law firms look out for?

CosmoLex Team

We all want financial security – and to keep our firm’s financial house in order. After all, a law firm’s money troubles frequently lead to team stress, which can mean a lower quality service for clients. And stress can cause employees and partners to make poor decisions that worsen the situation or lead to professional repercussions. It can also mean … Read More