Interview Questions for Law Firm Accounting Jobs (It’s more than Cash Flow)
If you are a law firm looking for new legal financial software, you also need to take into consideration that your data will need to migrate to the new software. Since you’re starting anew, this is the best time for a clean setup and guide into best practices with a good accountant or bookkeeper.
If you’re a lawyer with a background in accounting, that’s great! But most of you have not gone to school for this. Bookkeepers and CPAs have special training to make this transition of financial information and financial documents as clean and efficient as possible. They are well worth the time and energy to engage to help you with the transition to the new software.
With new software, you have the opportunity to set up your day-to-day accounting system exactly right. Don’t blow this chance. Find an accounting firm that has expertise in law firm accounting services so that you can comply with your state bar association rules and create best practices within your day-to-day workflows.
Case Study: Law Firm slashed 50% of overhead by outsourcing outdated legacy accounting
Outsourced Accounting Firm or In-House Staff Accounting?
Do you want a full time, in-house staff accountant? Or do you want a part-time, outsourced accounting firm? Figuring out the job description for the right accountant or bookkeeper is one of the most important business needs for the law practice transitioning to new legal accounting software.
The Benefits of Outsourcing Accounting
The financial advantages of hiring an outside accounting firm to handle the law firm bookkeeping include no longer having to pay for:
- Healthcare
- 401K Contributions
- Vacation Pay
- Sick Pay
Additionally, since modern legal accounting software is now cloud-based, you have the opportunity to hire from anywhere in the world – certified public accountants and bookkeepers who have law firm expertise, good communication skills, and fit your budget. When you don’t have to pay for the overhead of a full-time employee, you have a larger budget to spend on their expertise.
Find a Law Firm Accounting Expert
Interview Questions for the Accounting Professional
How do I hire a qualified accountant? When hiring someone as crucial to your law practice as the back office accounting professional, you need to understand the processes and workflows that this person sets up. Some questions to consider asking:
- What legal accounting software do you recommend?
- Will you coach the law firm staff on how to use the new software?
- Have you ever migrated financial data from our current software to the software you recommend?
- What is the frequency of internal financial reporting? Month-end? Quarter-end?
- Will you assist the law firm in budgeting or financial planning?
- Do you understand the bar association rules for IOLTA?
- How will you assist in payroll processing?
- Do you have experience in LEDES billing?
- During tax season, will you be preparing our financial statements for tax preparation? How will you assist in filing taxes?
- Do you offer controller services as well?
Once you find the right accounting professional, you can work with that person to transfer the general ledger data. This is the part where the expertise of the new hire will determine how smoothly the data migration will be.
Is QuickBooks Online the Right Billing and Accounting Software for Law Firms?
Law Practice Workflows / Best Practices
Chart of Accounts
Having a legal chart of accounts is the foundation for the law firm’s financial records. Legal considerations for a chart of accounts include:
- Money held in trust / retainers
- Reimbursable expenses from clients — Both hard and soft costs
- General invoicing: Where is income booked?
- Expected financial statements / reports
Establishment of best practices for invoicing
When you consider the lifecycle of your client, you have many points of contact:
- onboarding
- expenses
- IOLTA / trust retainer
- invoicing / accounts receivable
- payments
You want to make sure you know how to manage all of these touchpoints in your new software and that there is a clear procedure for each. Additional accounting and bookkeeping tasks will include payroll – don’t leave this out of the process. If you integrate all of your data, you’ll be able to create a financial analysis that can show you how to improve profit and productivity.
Of course, you’ll still need services for ongoing monthly account reconciliation and trust reconciliation. But if you have it set up by a pro, you may be able to use someone within your office.
Keep in mind that if you are delivering hundreds of invoices per month, you may need special assistance to get those out in a timely manner. Ask the accounting professional how she would handle that.
More Considerations When Hiring Accounting Professionals
- Assistance in setting up QuickBooks Online Advanced, specific to your needs as a law firm. This includes wiring in your bank accounts and receiving guidance on apps that can extend the functionality of QuickBooks — like, LeanLaw does for timekeeping, invoicing, trust accounting and reporting. Other apps might track expenses, receipts or assist with reminders or collections.
- Outsourced AR/Invoicing as needed. Of course, if you have LEDES requirements, your accounting pro should know about that as well.
If you need help finding an accounting professional for your law firm, consider the independent professionals in our LeanLaw Accounting Pros (LAP) program. Our LAPs are fluent in QuickBooks, LeanLaw and law firms – they are your best bet for a successful transition into best practices for accounting.
