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Top 10 Qualities of a Good Bookkeeper For Your Law Firm

Wondering what drives financial success and scalability for your law firm? 

Believe it or not, part of it hinges on how good your bookkeeper is. 

For law firm owners eyeing the milestone of 7 or 8 figures, selecting a bookkeeper goes beyond mere number crunching. It’s about finding a strategic partner. 

Let’s talk about the top 10 qualities of a good bookkeeper for your law firm and find out how the right one can be a game-changer for your firm’s growth.

Importance of Bookkeeping for Your Law Firm

If you’re dreaming big, eyeing 7 or 8 figures for your law firm, then finding the right bookkeeper isn’t just a to-do item to tick off your to-do list. It’s essential for your revenue growth.

Did you know that according to Thomas and Reuters, 80% of law firms consider a legal bookkeeper’s skill for adopting new technology as a deal-maker? 

But, technology is just the tip of the iceberg. Now, don’t get me wrong here. Technology is important, no doubt, but beyond technology, there are more important things you need to keep in mind when hiring the right bookkeeper for your law firm.

But before getting into those 10 qualities of a good bookkeeper for your law firm, let’s first understand the right questions you should ask.

Questions to Ask Yourself When Hiring a Bookkeeper For Your Law Firm

Most people start the conversation with “How much will this cost me?” right after “Do you do bookkeeping for lawyers?”.

It’s natural to have a budget in your mind.

But here’s a shift in perspective for you: instead of seeing a bookkeeper as another line item on your expense sheet, think of them as an asset, as valuable as the top paralegal or associate on your team. 

A good bookkeeper doesn’t just handle your accounts. They have unique insight into your law firm’s financial pulse because they track every dollar that moves in and out of your law firm.

So, when hunting for that perfect match, it’s not just about finding someone who fits the budget but someone who can help with your law firm’s growth. 

How can legal bookkeeping help push your firm into the 7-figure league? Or make you the go-to firm for personal injury or family law? These are the qualities of a good bookkeeper you need to ponder over. 

Remember, It’s not just about affordability. It’s about value. Can they be the secret sauce to your law firm becoming the best version of itself? That’s the real question.

10 Qualities of a Good Bookkeeper For Your Law Firm

Experience in Law Firm Bookkeeping

Not all bookkeepers are created equal. A bookkeeper experienced in retail or construction might not be the best fit for a law firm. Law firms have unique needs, especially concerning the management of trust and operating accounts. 

You need a bookkeeper who’s not just familiar but comfortable with the monthly reconciliation of these accounts. This is crucial for daily operations and ensuring compliance during state bar audits or in the unfortunate event of a client filing a complaint. 

In such scenarios, being able to show careful and diligent accounting practices for both your trust and operating accounts becomes indispensable. Failing to provide this information could lead to disciplinary actions by the state bar—an outcome every lawyer wants to avoid.

The right legal bookkeeper understands the intricacies of law firm bookkeeping, which makes them an invaluable part of your team.

Familiarity with Problems that 7-Figure Bookkeepers Have

Your law firm bookkeeping partner should be more than just acquainted with working alongside lawyers. They should have experience handling the finances of high-earning, profitable law firms. 

A bookkeeper who’s only used to dealing with firms making $200,000 to $300,000 may not provide the expertise required to deal with the financial complexities of a 7-figure firm. The true cost of hiring a less experienced bookkeeper for a lower fee could be far greater in terms of lost financial insights and growth opportunities. 

Therefore, it’s essential to choose a bookkeeper who is familiar with the scale of your ambitions and capable of supporting your growth to 7 and 8 figures.

Adoption of Technology

According to Walters Kluwer, about 55% of law firms insist their bookkeeper wields specific tech tools for better accuracy and efficiency. 

In the digital age, what to look for in a bookkeeper definitely includes their willingness and ability to adopt technology. Many smaller or solo bookkeeping services might stick to the basics, like Xero or QuickBooks, without leveraging additional tools. 

However, the use of technology, like Zapier or advanced payment collection systems, can significantly enhance efficiency and provide deeper insights into your financials. 

A bookkeeper who can integrate your practice management software and recommend systems for improving payment collection will keep your law firm cash flow positive and save you time from chasing down payments from your law practice clients.

Responsiveness and Communication

Among the qualities of a good bookkeeper, excellent responsiveness and communication are paramount. The unregulated nature of bookkeeping means responsiveness varies greatly, but for your law firm to function smoothly, you need a bookkeeper who not only replies promptly but also provides comprehensive, clear answers to your inquiries. 

Many bookkeepers may respond to inquiries with brief or vague replies, leading to a frustrating back-and-forth for clients who need detailed clarifications for their questions. This situation is far from ideal when you’re trying to understand your firm’s financials or need specific reports on expenses like client gifts or networking events.

Choosing the right law firm bookkeeper means you’re not left with more questions than answers and can make informed decisions based on accurate, and timely financial information.

Proactivity and Initiative

Legal bookkeeping should go beyond just monthly reports. A bookkeeper should proactively seek ways to support your firm’s financial health and offer insights and advice without being prompted. 

Just like a valued employee who anticipates needs and offers solutions, a proactive bookkeeper can become an essential asset in planning and achieving your firm’s financial goals.

A proactive bookkeeper dives deep into your books and seeks to understand the implications of every financial figure and what it means for your practice. 

They’re the ones turning the wheels in their mind, considering how your financial data intersects with your firm’s larger objectives, ensuring you’re not just receiving reports but are also equipped with the knowledge to use that information effectively.

Strong Ethical Principles

For law firms, the importance of adhering to strong ethical principles in every aspect of operation, including bookkeeping, is paramount. 

Lawyers are held to high standards of integrity by the state bar of each state, with specific ethical guidelines shaping the practice. Violations not only put a lawyer’s license in jeopardy but also the firm’s reputation. 

It is crucial, then, that your bookkeeper aligns with these ethical standards.

Every entry made, from income to expenses, needs to be accurate and ethical. Any deviation, any attempt to misclassify funds, or engaging in questionable financial practices exposes your firm to significant liability. 

As lawyers, safeguarding your license and maintaining the trust placed in you is a fundamental responsibility.

Thus, ensuring your bookkeeper’s practices are in complete harmony with the ethical expectations of the legal profession is not optional. It’s a necessity!

Collaborative Team Player

A bookkeeper should be more than an outside service; they should be a team player invested in your firm’s success. Look for someone eager to engage with you on financial performance, offering insights and strategies to help you meet your targets and grow your practice.

It’s about having someone who, month by month, isn’t afraid to say, “It looks like we missed our targets,” or “Our client sign-on is lower than our goals.” 

This level of involvement and willingness to discuss performance and strategize on improvements is what you should look for in a law firm bookkeeper.

Such a bookkeeper becomes an asset in your quest for growth. Having a collaborator who is as committed to your firm’s success as you are can be the difference between plateauing and achieving those 7-figure aspirations.

Expertise in Financial Software and Tools

A top-notch accountant for law firm will be well-acquainted with industry-standard software such as QuickBooks, Xero, and FreshBooks, each known for its robust features that cater to different aspects of financial management. 

Furthermore, bookkeepers’ familiarity with law-specific financial tools like Clio Manage, which integrates practice management with accounting, can offer your firm a competitive edge. These platforms enable seamless tracking of billable hours, expense management, and client billing, all while ensuring compliance with legal industry standards.

If a bookkeeper has this proficiency, it not only streamlines your law firm’s operations but also provides potential growth opportunities by offering clear, actionable financial data. 

So choose someone who is as forward-thinking about technology as they are about numbers.

Analytical Skills

The difference between an average bookkeeper and one that is a strategic asset to your law firm often lies in their analytical skills. 

Most bookkeepers, even some accountants, might compile your profit and loss (P&L) statement each month, but not all can dive deep into what those figures really mean for the health and direction of your business. 

It’s a nuanced skill that’s critical, especially when considering that many lawyers themselves may not be adept at parsing their own P&Ls.

For a law firm intent on growth, a bookkeeper who merely categorizes transactions as expenses and income, without deeper analysis, simply won’t cut it. 

This type of surface-level management might suffice for a firm in maintenance mode, content with its current revenue and size. However, for ambitious firms aiming to expand — say, from three to five locations, from three associates to six, or looking to double revenue from $2,000,000 to $4,000,000 — analytical prowess in a bookkeeper becomes indispensable.

A bookkeeper with the ability to not just report numbers but interpret them, providing insights that inform strategic decisions, is a valuable partner in growth. 

They help law firm owners understand where the firm stands financially, what strategies are working, what needs adjustment, and where opportunities for profitability lie. 

Attention to Detail

In legal bookkeeping, the devil is truly in the details. A common pitfall is bookkeepers miscategorizing expenses, which can significantly skew your understanding of the firm’s financial health. 

Consider a scenario where an expense that looks like it’s for food—say, an Uber Eats charge for $1,500—is actually for a client appreciation event. Without attention to detail or taking the time to follow up and ask questions about this expense, it could result in an incorrect classification. This leads you to believe you’ve spent $20,000 on food-related expenses in a year, a misunderstanding that could have you questioning your firm’s spending habits unnecessarily.

Rather than automatically categorizing a large Uber charge as a meal expense, a diligent bookkeeper would investigate further. Was this charge related to a client appreciation or partner referral event? 

Proper classification here is not just about accuracy. It’s about understanding the true nature of your firm’s expenditures and how they contribute to overall profitability and client relationship building.

This level of precision in categorizing expenses ensures that your financial statements accurately reflect your law firm’s operations. It allows for informed decision-making based on a clear, accurate picture of where your money is going. 

The Devil is In the Details!

Whether you’re aiming for 7 figures or beyond, the right law firm bookkeeper can make all the difference.

The qualities of a good bookkeeper mentioned in this article will guide you in hiring the right one for your law firm, ensuring they not only meet your current financial management needs but also become a strategic partner in your firm’s future success.

Don’t forget, the devil is always in the details and only a good law firm bookkeeper can help you find it. 

So, if you’re nodding along, thinking, ‘Yes, this is exactly what I need in a bookkeeper,’ then let’s talk. Our team embodies these essential qualities and provides top-notch legal bookkeeping services that take your firm to new heights.

Schedule a consultation with us and let’s partner up and take you to not just seven but eight figures.