CPA Practice Advisor - 20

BUILDING YOUR

Each month we explore the
advantages and intricacies
of developing and growing
a niche practice.
This month we're examining
what it takes to serve the
niche of legal clients.

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RESOURCES FOR
THE LAW FIRM
ACCOUNTANT

Tips for
Accountants
Serving Law Firms,
from CosmoLex:
https://bit.
ly/2WeAhFm

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Video: A 6 Step
Guide to Better
Legal Bookkeeping,
from Law
Technology Today:
https://bit.ly/2HP55YZ

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Maintaining Law
Office Financial
Records, from
TheBalanceSMB:
https://bit.ly/2wzxEDq

*

New Resources
for Accounting for
Law Firms, from
AccountexReport:
https://bit.ly/30YpbI5

Building Your
Niche Practice
is sponsored by
Intuit QuickBooks.

20

JUNE 2019 ■

NICHE PRACTICE

How to Gain Law Firm Clients With Clever Marketing
By Becky Livingston

ATTRACTING LEGAL CLIENTS to your firm's services might be a
challenge if you do not understand nor acknowledge the pain
points in their industry.
According to several sources, such
as Thomson Reuters, The American
Lawyer, and Forbes, there have been
several trends thwarting law firms
from achieving their desired success,
including the lack of time management
skills, challenges with billing and collections, managing costs, a continued
shortage of financial growth, and
advances in technology / data support.
Also, take into consideration the
rise of freelance lawyers and its impact
on firms. According to Legal Business
World, "Some more progressive law
firm managing partners estimate
that between 20% to 40% of their
entire legal workforce will be freelance
within 5 years."
What can your firm do to turn

these challenges into opportunities?
You can deploy effective marketing
strategies that are laser-focused to
your target market.
Here's how.

IDENTIFY THE TARGET
Family law and criminal law practices
are very different types of law firms.
To be effective and successful, you
need to truly understand the client's
needs, goals, pain points, and action
triggers. Your end goal in this activity
is to clearly define what type of law
firm you are interested in working
with, to identify their growth goals and
current needs, and to provide solutions
they need now and in the future.

DETERMINE YOUR
MARKETING MESSAGE
AND VEHICLES
If you are marketing the same services
to the same audience as your competition, the differentiator will be in the
message creativity and its delivery
vehicle. For example, if your firm offers
software services that easily track
income and expenses, that could be
purchased from dozens of vendors.
Your goals are to stand out among
the competition and to reach your
audience where they are most likely
to pay attention, e.g., mobile.
In the past, Xero has had some creative ad campaigns that nail it on the
head. Xero used a mobile and desktop
campaign focused on the client's pain
points and used it in a clever way to
grab attention. In the "Fancy whipping
up something more rewarding than a
spreadsheet?" campaign, they used a

How to Set Up the Chart of Accounts for Law Firm Clients
By Brandy Derrick

ACCOUNTANTS KNOW HOW important it is to set up a client's
chart of accounts correctly from the get-go, and while there
are a lot of similarities between professions, some have unique
aspects or nuances that, for various reasons, are very important.
The legal profession is one of those;
in fact, creating and maintaining the
chart of accounts for law firms aren't
just suggestions, they are requirements. State bar association rules
require law practices to keep meticulous records so there is no impropriety
when dealing with Interest on Lawyers'
Trust Accounts (IOLTA), or any other
trust accounts. The rules vary by
state, but at a minimum, attorneys
are required to maintain "complete
records." The American Bar Association publishes a list of recordkeeping
requirements by state.

www.CPAPracticeAdvisor.com

Even though your state may have
its own unique rules, there are certain
things you should include in your
clients' chart of accounts in order to
easily comply with most record keeping requirements.

TRUST LIABILITY
The most unique aspect of the chart
of accounts for law firms is the IOLTA
or trust account. The funds in this
account do not belong to the lawyer
and need to be recorded on a per client
basis. In order to comply with recordkeeping rules, almost all attorneys

are required to have at least two bank
accounts: the normal operating bank
account and the IOLTA bank account.
In addition, the chart of accounts
should also include a Trust Liability
account to show that the funds in the
IOLTA bank account do not belong to
the law practice. They are, instead,
owed to the client until they are
earned by the attorney or disbursed
in other ways.
Firms also need to show the trust
balance on a per client basis. To
comply with this record keeping rule,
you can set up sub-accounts under the
Trust Liability with the client's name.
For example, client XYZ receives a
settlement and the attorney deposits
those funds into the IOLTA bank
account, and then makes offsetting
disbursements to the client, the law
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