A law firm has a number of unique accounting requirements. It is strongly focused on the proper identification of chargeable hours, correctly structured billings, distributable income calculations, partner accounts, practice group reporting, realization rates, and much more. Law Firm Accounting provides the accountant with the information needed to set up a charge code system, account for ongoing business transactions, prepare financial statements, and issue a broad array of reports that are specifically targeted at the needs of a law firm. In short, it addresses every aspect of the accounting for a law firm.
Learning Objectives
Upon successful completion of this course, participants will be able to:
Recognize how the modified cash basis varies from accrual basis accounting, and how this impacts the recognition of various transactions.
Specify the circumstances that can lead to the under-realization or over-realization of hourly rates.
Specify the types of billing arrangements in which a law firm typically engages.
Identify the accounting techniques that can be used to reduce the amount of reported income.
State the types of expenses that are categorized as compensation or operating expenses.
Describe the derivation of distributable income.
Specify how the financial statements change when shifting from the modified cash basis to the accrual basis of accounting.
Identify the contents of the line items commonly found in the statement of cash flows.
Recognize the uses to which the various management reports and metrics can be put.
Identify the controls that can minimize instances of fraud within a law firm.
Specify the controls applicable to the handling of cash within a law firm.
Major Topics
The Essentials of Law Firm Accounting
Law Firm Financial Statements
Fee Revenue
Law Firm Management Reporting
Bad Debts
Billing Rates
Chargeable Hours
Law Firm Controls
