QuickBooks and LeanLaw will help you understand your contingency law practice profitability
Legal invoicing for contingency law firms is complicated. It’s not just calculating a percentage of a settlement. There are advanced costs, non-fronted costs, expense tracking, and other outlays that need to be paid from the settlement that will affect the calculations. Clumsiness can happen with regard to accounting. LeanLaw software combined with QuickBooks Online aims to create repeatable steps to ensure accuracy and proper accounting so that invoicing is transparent and clearly understood.
Contingency Strategy List
Tracking contingency matters in QuickBooks Online alone will communicate certain events: I got this bill or the firm incurred expenses hired an expert witness, or some other cost. But QuickBooks Online does not organize in terms of cost: it’s not set up for the real-time nature of contingency. But the LeanLaw app paired with QuickBooks Online lets you know the exact cost of a contingency matter in real-time in four ways:
- Expense tracking
- LeanLaw can create advanced cost expenses (money that the firm lays out on behalf of a matter)
- LeanLaw can even track interest charges with regard to expenses
- Even though contingency firms don’t charge by the hour, if you don’t know how many hours went into a case/matter, you won’t understand staff utilization, your firm’s profitability or lack thereof.
- Non-fronted costs: costs that still affect a settlement (e.g., medical fee lien – so that the doctors get paid before the client)
- That medical bill is not an accounting function: there is no liability to the firm, but it is still an important component of the settlement.. The firm needs to track all of these liens.
- Workflow: The process by which to pay all parties: liens, law firm, and clients: These tools are not yet live on LeanLaw, but we expect to have it functioning later in 2019.
Unique to LeanLaw’s work with contingency law firms is that all of the accounting will happen in QuickBooks Online, but the reporting will take place in LeanLaw: the accounting folks can stage all the details in QuickBooks and the lawyers can interact and track their matters in a manner that is intuitive to them. How much have we spent? How many hours have my staff put into this, what does my settlement statement for this client look like?
Since QuickBooks and LeanLaw have real-time 2-way sync, and since LeanLaw has organized the workflow of the contingency in terms of cost, all of the clumsiness that can happen on the back end of the settlement disappears.
LeanLaw combined with QuickBooks Online makes contingency firms more profitable.