Bookkeeping and Accounting for Employment Lawyers

As an employment lawyer, several specific legal industry tax deductions may apply to you. These deductions can significantly decrease your taxable income when properly documented and claimed. Here are some of the deductions you should be aware of:

• Home Office Expenses: If you work from a dedicated home office, you can claim the portion of your home expenses, like rent, utilities, and maintenance costs that relate to your office area.
• Professional Fees and Dues: Any fees paid to retain your bar membership, or to professional legal organizations can be deducted.
• Continuing Legal Education: If you participate in continuing education to maintain your license or improve your legal skills, these costs can be deductible.
• Legal Research Costs: Costs incurred for legal research tools, online databases, and legal publications can be deducted.
• Travel expenses: If you travel for work matters – such as meeting with clients or attending conferences – you may deduct these related costs. This includes airfare, lodging, meals, and transportation.

Please note that tax laws change regularly and can vary by location. Consulting with an accounting professional can ensure that you're maximizing your deductions while staying within the legal guidelines.

Bookkeeping for employment lawyers is tailored to handle the specific dynamics involved in their practice. Experienced professional bookkeepers understand the cyclical nature of law firm income and the need for meticulous tracking of billable hours. They are equipped to manage client retainers in a way that reflects in the financial statements accurately and complies with the legal requirements.

Intermittent income can also pose a challenge for consistent cash flow analysis. Bookkeepers, having a profound understanding of these income patterns, can predict potential cash crunch periods and even the peaks, enabling law firms to plan and strategize accordingly. This specialized bookkeeping service ensures that every financial aspect of an employment law practice is handled with expertise and precision, ultimately contributing to the firm's profitability and growth.

The best way to manage escrow and client trust accounts in the bookkeeping process for employment lawyers involves several important steps. Firstly, it is crucial to keep clear and accurate records of all transactions, including the source and destination of funds. A detailed ledger for each client should be maintained, documenting every disbursement and deposit.

Secondly, reconciling the trust accounts regularly (usually on a monthly basis) is vital. This includes comparing the balance of the trust bank account with the total of individual client ledgers. Any discrepancies should be immediately investigated and corrected.

Lastly, the use of modern bookkeeping and accounting software can simplify this process, increase accuracy, and reduce the risk of errors. Some software options are specifically designed to manage trust accounts and can help to streamline this aspect of an employment lawyer's bookkeeping process.

Beyond these steps, it's incredibly important to stay updated on and comply with state or province regulations regarding trust accounts. Consultation with a professional accountant or bookkeeper is often beneficial to ensure proper procedures are being followed.

Nope! All bookkeeping is completed in-house.

Your bookkeeper will be your main point of contact, but at times you might hear from another member of your team. This is usually when your bookkeeper goes on vacation, is sick, or otherwise unavailable.

We handle the bookkeeping for you but sometimes we’ll need your input, especially at year-end. On average, expect to spend 15 minutes each month answering questions for your bookkeeper, or uploading supporting docs.