Accounting for Attorneys

Accounting for AttorneysIn California, the number one reason attorneys lose their license is due commingling the clients funds with the general firm’s funds. California Bar Association requires every attorney practitioner to keep the clients money and the unearned attorney fees to be kept in IOLTA bank account and separate from the firm’s general account. It is imperative for each attorney with a client trust account to keep a good accounting and segregate the clients funds from the firm’s funds. At SmartCPA, we have Attorneys and Certified Public Accountants who are skilled in providing accounting solutions for legal practitioners and legal agencies. With our in-depth knowledge of IOLTA account requirements, we can help you personalize your firm’s accounting to be in compliance with EIOLTA’s bar requirements. SmartCPA is well trained to help you keep your license.

We satisfy the tax, financial and accounting needs of both independent attorneys and law firms.

We have a trained and experienced team of accountants who understand the daily routine, compliance issues and billing issues that face the legal profession. This knowledge is used to perform an in-depth analysis of your accounting issues and tax strategies all in a bid to doubly ensure your financial success.

We engage in critical analysis and provide practical solutions to help you understand new business trends, several growth opportunities as well as improve your operations, which will lead to more efficiency, and more profitability in your practice.

We have gathered many years of experience in accounting for attorneys and you can put your trust in us for all the accounting and tax needs of your profession. We always deliver.

Here are the accounting services we offer for attorneys;

Bookkeeping and Accounting

Most law firms and self-employed attorneys always have issues that relate to their firm’s record keeping and bookkeeping standards. These standards are often set by the bar association or other regulatory bodies.

We help attorneys keep records that directly reflect how your operations are in compliance with the laws of the regulatory bodies for attorneys.

What we help you do…

  1. Teach you how to set up and record retainer payment
  2. How to record income received from every one of your clients
  3. How to set up those important files specifically for attorneys
  4. Give you guidelines on how to bill a client
  5. How to manage a client who pays his/her payment late
  6. Calculate the CPC (cost per client)
  7. Help you understand and calculate the profit and loss of a particular client
  8. And also how to set up clients’ bill on other expenses related to the case as well as distributing the cost to clients after sorting out the fact costing.


Have you ever imagined carrying out your legal profession without stress? Without having to look over your shoulders? With more flexibility and many more benefits?

As long as you comply with your firm’s tax obligations, you wouldn’t have the IRS on your heels all the time and there would seem to be a balance in your work and life. It is very hard to go about legal cases and still have to slug it out with the internal revenue service. That is why SmartCPA accountants have stretched their tentacles into sorting self-employed attorneys’ tax issues.

Payroll and Employee Issues

Payroll and Employee IssuesAs a law firm or a self-employed lawyer, there are employees who work for the money and need to get paid at the end of the day. Our trained payroll specialists help in preparing your firm’s payroll timely and help sort other issues associated with your staff.

One of the basic needs of an organization for growth is a cordial relationship between the board of directors, managers, and the staff. Once there is a rift that spirals out of control, it directly affects the employees’ attitude towards their job which in turn affects the attorney’s job directly and hence the overall performance of the firm.

Once SmartCPA steps into the mix, you are face to face with salvation.

Accounting System Design and Maintenance

To be a successful legal firm, there must be an adequate accounting system. Once you have a properly designed accounting system, you can describe where your profession is heading – and make the right decisions for the business. Also, if there is any way you are heading astray, our well-designed accounting system can give you a heads up if there is an imminent financial crisis on your business.

Some attorneys may overlook the importance of setting up

Overhead/ Cost Analysis

The easiest way to check overhead costs is to understand the points where those costs arise. With an overhead cost analysis, a law firm can identify these costs, break them down into several categories and carry out analysis on the trends.
The cost analysis could be categorized into;

  1. Activity costing
  2. Cost element accounting

This involves taking records of the costs arising from a designated department in which the cost flow happens. Cost element Accounting consists of several cost elements like insurance, utilities, employee benefits, and other expenses.

How Reliable Is A Financial Statement?

A financial statement can be penned down by just anyone. The difference is in the reliability of the statement that goes a long way in determining the expertise of the one that put it together.

Our CPAs (Certified Public Accountants) are trained formally in the art of preparation of financial statements and have detailed knowledge on the subject.

Some state laws are crafted in a way that only a seasoned CPA can prepare a financial statement. Plus, CPA compliance and licensure are governed by the state government. This means that a financial statement prepared by a CPA would be viewed as more credible and in most cases, is better than the one done by a bookkeeper.

If a CPA does a reporting on a financial statement, there are certain obvious pointers that show how reliable the report is, and the assurance provided by the CPA with regards to the financial statement or report.

A financial report for a third party use would be less credible when it is issued by an ‘in-house’ accountant. The report should be prepared by an outside independent certified public accountant.