Why niching into law firm accounting is the killer move
Why niching into law firm accounting is the killer move
Niching in whatever business you do is generally a good idea. With accounting services, niching becomes a great idea.
The benefits of sticking to a specific niche are:
- You become a trusted advisor in your niche market.
- You can charge more because of your expertise.
- You are no longer viewed as a commodity.
- You coach new employees with the same material.
- You can continually finesse best practices because of your focus.
Accounting professionals for law firm clients
The idea of working with lawyers can be intimidating if you don’t yet have that experience. It seems more complicated than other types of accounting. How does one learn about law firm accounting? Are lawyers scary? Do you want them as new clients?
Lawyers do have different, complex accounting needs. If you are an accounting generalist looking for an accounting niche, don’t let that scare you off. Law firms can be the most rewarding clients. They are just like you: professional, detail oriented, and looking for someone to partner with to achieve their professional goals and a competitive advantage.
Law firm accounting starts like other professional services with billable hours. They also have flat fee services that they may track their time against. LeanLaw believes they should track their time to understand the profitability of their flat rate.
There are also retainers [Interest on Lawyers’ Trust Accounts (IOLTA) trust deposits] that need to be handled, according to American Bar Association guidelines. Although this may sound like there are compliance traps, LeanLaw would argue that since the rules are clearly defined (by state, mind you), it can be easy to stay within the rules and regulations. Keeping organized financial statements and a steady cash flow are just two advisory services that law firms are looking for.
Law firms are not the kind of client looking for the cheapest general accounting professional. They know they have niche needs and are willing to pay for expertise. An accountant or bookkeeper who works with law firms has the opportunity to steer the law practice in the right direction with their own data, culled from QuickBooks® Online and customized with LeanLaw. Law firms are also looking for guidance in choosing their financial software. This is where you come in.
As a QuickBooks ProAdvisor®, you are already a serious provider of the services they are looking for. If you specialize in law firm accounting, even more so. People who run law firms are no different from other business owners.
How do you gain an understanding of law firm accounting? Where does one begin?
The Accountant’s Law Lab
Whether you already work with attorneys or are new to this growing niche, the Accountant’s Law Lab is the place to learn. QuickBooks ProAdvisors and LeanLaw Accounting Pros Lynda Artesani and Sarah Prevost have created a learning environment for the specific area of legal accounting expertise. Learn more about:
- The vernacular of the law firm.
- IOLTA trust accounting.
- Law firm budgeting.
- Best practices for law firm accounting.
- What software is best for which firm and why.
- What is the best pricing for this niche?
- How to attract potential clients.
With this group, you can go from being terrified to growing confident: You have a group of colleagues who do what you do—and have a place to ask questions. You are no longer viewed as a commodity who does data entry. You are a law firm accounting expert.
Lynda suggests that if you’re not ready to commit to just one niche user, pick two and see which you like best. You could also rate your current client list: Whom do you like to work with best? Who pays in a timely manner? What work do you enjoy most?
Lynda also talks about the advancement of SaaS (software as a service) technology in accounting with QuickBooks Online and LeanLaw: “Technology is just getting better, which means that many of the tasks I used to do manually are now automated. This means that my accounting practice can handle more clients, with more accuracy and data insight. I provide better value to my clients, which means I can charge more. Technology is not scary, it’s liberating.”
Lynda has been a LeanLaw Accounting Pro since the inception of the program. She receives client referrals from LeanLaw and has a voice in creating new features that her clients request. She has had a profound influence on the development of the software, thanks to her expertise and client insights. LeanLaw is the only premier legal app in the QuickBooks Online app store and is exclusive to QuickBooks Online.
Lynda’s clients have become so reliant on her law firm expertise that they not only ask her about accounting, but also software choice, payroll, staff hiring, reasons for turnover, and more. She has become integrated into several of her clients’ workflows because her deep expertise and specific service touches all aspects of the law firm.
When a law firm outsources their back office to an external accounting firm, they are betting they can more productively service their accounting needs with someone who is a law accounting expert.
Today, most accounting software is in the cloud and there is no more need for an in-person bookkeeper or accountant. They can choose a bookkeeping or CPA firm with an internet connection from anywhere in the world.
Not only do law firms widen their options when they decide to outsource; they also lower their costs. They no longer have to pay for:
- Real estate (office space)
- Health insurance
- Vacation pay
It’s a win for everyone. The accounting pros are sharpening their legal accounting best practices by servicing the same type of client, while law firms increase the expertise and efficiency of their accounting with lower priced accounting services.
Pick a niche! Pick two. Streamlining your workflow will do wonders for your own firm.