Bookkeeping and reporting for Lexington law firms, built around three-way trust reconciliation, realization rates, and knowing which practice areas pay.
Two ledgers, two very different jobs. Your operating account funds the firm. Your trust account holds money that is not yours, not for one minute, and every dollar in it belongs to a specific client on a specific matter. Getting that separation right is not optional, and getting it right monthly is the whole point.
We handle the bookkeeping side of that work for firms in Lexington and around central Kentucky: reconciling the trust bank account, the trust ledger, and the individual client ledgers to each other every month, so a shortage or a commingled deposit surfaces in that month's reconciliation instead of during a review. We are not attorneys and do not advise on ethics rules. We do the reconciliation and reporting work alongside your firm's own compliance obligations and the guidance of your attorneys, which is exactly where an experienced controller belongs.
The three-way match is straightforward in concept and easy to let slide in practice. The trust bank statement, the trust account ledger, and the sum of all individual client ledgers have to agree. When they do not, the cause is usually mundane: a bank fee that hit the wrong account, an earned fee transferred before the invoice went out, a settlement deposit posted to a matter that closed. We run the reconciliation monthly, document what was found, and keep a clean record you can produce on request. Earned fee transfers from trust to operating get tied to actual invoices, so the timing is defensible and the paper trail is already there.
Firms track billable hours obsessively and profitability almost never. Hours billed is not the number that matters. Realization is, and so is collection. If you bill 1,800 hours, write off 12 percent at invoicing, and collect 85 percent of what remains, your effective rate is nowhere near your standard rate. We build reporting that shows revenue and direct cost by practice area and by timekeeper, so you can see that the contingency work carries the firm while an hourly practice area quietly loses money on write-offs. That is the report that changes what kind of cases you take.
Partner compensation gets messy fast. Draws taken through the year, guaranteed payments, distributions that need to line up with the operating agreement, and capital accounts that nobody has updated since the firm formed. On the staff side, you have associates, paralegals, and administrative payroll running through ADP, Paychex, Paycor, Gusto, or QuickBooks Payroll, with payroll tax filings due on a schedule that does not care how busy trial season is. We keep draws and distributions recorded correctly, maintain partner capital accounts, and run payroll so the filings land on time.
Contingency work makes revenue lumpy in a way that wrecks planning. Six quiet months, then a settlement lands and suddenly there is a question about how much to distribute versus hold. Meanwhile fixed overhead runs every month regardless: rent, salaries, malpractice coverage, research subscriptions. A rolling cash forecast built off your matter pipeline and expected resolution timing gives you a realistic floor, so a distribution decision is not made on the feeling that the account looks healthy. Budget versus actual runs monthly, and case cost advances get tracked as the receivable they are instead of disappearing into expenses.
We handle the bookkeeping and reconciliation work around trust accounts, including the monthly three-way match and client ledger maintenance. We are not a law firm and do not advise on ethics rules. That work happens alongside your firm's own compliance obligations and your attorneys' guidance, with us providing accurate records and prompt flags when something looks off.
The accounting side runs in QuickBooks Online, QuickBooks Desktop, Xero, Sage, or NetSuite. Most practice management platforms export billing and trust activity in a form we can reconcile against. At the consultation, tell us what you use for time and billing and we will walk through how the two systems tie together.
No. Service scales in three levels, starting with bookkeeping and monthly close. Small firms often need the trust reconciliation discipline most, because there is no full-time finance person watching it. If the firm grows, the same relationship moves up to fractional controller and then CFO work without changing who knows your numbers.
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Read moreBook a consultation and we will show you what the first ninety days would look like.
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