5 Financial Must Do’s For New Law Firm Owners

Published by Alicyn McLeod on July 11, 2024

1. Invest in a Solid Practice Management Platform

Microsoft Word, Google Docs, and even your accounting software are not replacements for a viable practice management solution. The investment in software subscriptions and time spent learning the platform is minor compared to the potential costs of low conversion rates, losing clients, or non-compliance with trust accounting rules. A good practice management platform is essential.

2. Simplify Client Payments

Make it as easy as possible for clients to pay you. Your practice management platform may offer integrated payment processing options, or you may need to add these yourself. Provide various payment options to ensure cash flow. While you can later decide whether credit card fees are too high or checks are too manual, the priority is to make client payments easy and prompt.

3. Bill Promptly and Monitor Receivables

Unbilled work in progress doesn’t keep the lights on. If you bill by the hour, track your time daily and generate invoices regularly, timely, and accurately. Monitor accounts receivable closely. Move earned funds from trust accounts to your operating account as soon as possible.

4. Maintain Vigilance with Trust Accounts

Perform monthly 3-way trust account reconciliations. Understand and adhere to the trust accounting rules relevant to your state(s) and practice area(s). Ensure that no firm operating expenses are paid from trust accounts.

5. Understand Your Firm’s Financial Statements

Review your firm’s financial statements every month. While you don’t need to be an accountant, it’s crucial to understand your firm’s finances. Investigate any unusual bank and credit card balances, and scrutinize revenue and expenses that seem out of line on a month-by-month basis. Plan for how your net profit will impact your tax situation.

Bonus Tip: Work with an Accountant

Ensure you’re working with an accountant who can assist you with all the above tasks and provide professional financial guidance.

Alicyn McLeod

Alicyn McLeod is a CPA and CFP with more than 20 years of experience advising high income individuals, law firm partners, and business owners on advanced tax strategy and financial decision making. She focuses on proactive planning that reduces long term tax exposure while strengthening overall financial outcomes. Based in Atlanta and serving clients nationwide, Alicyn works with professionals and growth oriented businesses that need more than compliance. Her work integrates tax planning, cash flow strategy, and wealth coordination to ensure financial decisions are aligned across business and personal objectives. With a strong advisory foundation, Alicyn helps clients think several moves ahead. Her approach emphasizes clarity, structure, and strategic execution rather than reactive tax preparation.

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1. Invest in a Solid Practice Management Platform