Legal Accounting
Trust accounting, IOLTA management, and financial services designed specifically for law firms and legal practices.
Why Legal Accounting Requires Specialists
Law firms operate under strict ethical rules that make financial management uniquely sensitive. Client trust accounts (IOLTA) must be reconciled to the penny with every transaction documented and traceable. A single error in trust accounting can trigger bar association investigations and malpractice claims. Beyond trust compliance, law firms need client-matter profitability analysis, timekeeper productivity tracking, and partnership distribution calculations that most general accountants cannot handle. Our legal accounting team specializes in the financial requirements of law firms. We reconcile IOLTA trust accounts daily, maintain individual client ledgers within the trust, prepare three-way trust reconciliations that satisfy bar audit requirements, and manage operating account financials with client-matter detail. We also handle partner capital account tracking, compensation calculations, and the financial reporting that firm management committees rely on for strategic decision-making.
Legal Accounting Challenges We Solve
Common Challenges
IOLTA Trust Account Management
Client trust accounts are governed by bar association rules that vary by state. A single error — commingling funds, failing to earn interest for clients, or mishandling reconciliations — can trigger ethics investigations.
Client-Matter Billing & Tracking
Every expense, time entry, and cost advance must be tracked to the correct client and matter. When firms handle hundreds of active matters, accurate tracking becomes extremely challenging.
Timekeeper Compensation Calculations
Partner compensation often involves complex formulas based on origination credit, billable hours, collections, and subjective performance factors — requiring accurate data from multiple sources.
Bar Association Compliance
Regular trust account audits, random compliance checks, and detailed record-keeping requirements mean law firm accounting must be audit-ready at all times.
Complex Disbursement Tracking
Cost advances to clients, court filing fees, expert witness payments, and other disbursements must be tracked, billed, and collected — with proper aging of outstanding advances.
How Plenexia Solves Them
Trust Account Reconciliation & Reporting
Daily IOLTA reconciliation with three-way trust reconciliation reports (bank statement, trust ledger, individual client balances) that satisfy bar audit requirements.
Client-Matter Financial Tracking
Every financial transaction tagged to the correct client and matter, with real-time profitability analysis by matter, client, practice area, and timekeeper.
Attorney Compensation Calculations
We build and maintain compensation models that account for origination, hours, collections, and any other factors your partnership agreement specifies.
Compliance-Ready Trust Account Reports
Trust account reports formatted to meet your specific state bar requirements, ready for submission at any time — because bar audits can come without warning.
Detailed Disbursement Management
Cost advance tracking, disbursement billing, aging of unreimbursed costs, and write-off recommendations — ensuring your firm recovers every dollar it should.
Ready for Expert Legal Accounting?
Get a dedicated virtual accounting team who understand the unique financial requirements of your industry — serving organisations in the US, UK, Australia, and UAE.