Managing advanced client costs can be a logistical nightmare for contingency-based law firms like personal injury or social security disability practices, where hundreds of expenses pile up monthly.
Inefficient workflows, such as funneling every cost through a central bookkeeper can waste time and invite errors—think delays, sloppy accounting, and inefficiencies that drag down cash flow and stall case resolutions.
A poorly managed process doesn’t just waste time; it risks errors that can derail settlements and frustrate clients.
Fortunately, there’s a better way. In the video below, Paul W. Carlson, CPA from Law Firm Velocity, shares expert insights on optimizing workflows for firms with high volumes of advanced client costs. Here’s a quick overview of his approach.
Key Principles for Efficient Cost Management
Law firms need a system that hits 3 marks:
- Accuracy to keep the books clean,
- Accessibility so staff can work fast, and
- Security to shield sensitive financial details.
The right workflow cuts through the chaos, making it easier for teams to log costs in real time while keeping owner draws and payroll under wraps. Below, we unpack the video’s strategies for simplifying cost management, ramping up efficiency, and safeguarding the firm’s finances.
Direct Entry at the Source
The key to managing high-volume costs effectively lies in what business process experts call "capturing information once and at the source."
Instead of routing all expenses through a central bookkeeper, this approach incentivizes case managers and staff members who incur costs to enter them directly into the system, in real time.
Consider this common scenario: A case manager purchases a $20 medical record. Rather than creating a separate expense report or sending a request to the office manager, the case manager can immediately enter the charge into the accounting system and assign it to the correct matter. This approach offers several advantages:
- Immediate accuracy: The person ordering the record knows exactly which matter should be charged
- Real-time recording: No delay between expense occurrence and system entry
- Reduced communication overhead: Eliminates back-and-forth communications about expense details
As Paul explains in the video, capturing data once and at the source is a cornerstone of smart process design.
Use One System for All Matter Financials
Practice management tools like Filevine or CASEpeer are great for case tracking, but they fall short when it comes to financial controls—no check printing, no bank reconciliations. Instead, Paul recommends routing all costs through a dedicated law firm accounting system.
This ensures every transaction ties back to bank statements, providing a reliable, centralized record. When a matter settles, staff can quickly pull cost details without hunting across platforms.
Privacy and Role-Based Permissions: Soluno in Action
Here’s the catch: letting case managers into the accounting system can’t mean exposing sensitive data, like owner draws or payroll details. Paul demonstrates how Soluno, a law firm accounting platform, tackles this with tailored permissions.
By splitting operating accounts—one for client-facing costs visible to staff, another for private expenses like payroll—and restricting access to vendor records and general ledgers, firms can maintain confidentiality while decentralizing data entry.
In the video, Paul walks through Soluno from two perspectives: a limited case manager view and a full controller view. Case managers can log costs without seeing owner payouts or running unauthorized reports, while controllers retain oversight.
It’s not perfect, Paul notes some permission tweaks he’d like to see, but it’s a practical solution for balancing accessibility and security.
Benefits of This Workflow
For firms drowning in advanced costs, this workflow cuts through the chaos. Case managers handle their own entries, office managers focus on check printing and IOLTA compliance, and controllers (or firms like Law Firm Velocity) ensure the books are airtight.
The result? Faster settlements, fewer errors, and a scalable process that grows with your firm. To implement this system, consider the following steps:
- Choose an accounting system that supports granular permissions and multiple operating accounts
- Set up separate accounts for general operations and sensitive transactions
- Configure appropriate user access levels for different staff roles
- Train case managers and staff on direct cost entry procedures
- Establish review processes to ensure accuracy
Watch the full video above to see Paul demo Soluno and dive deeper into these best practices. Have questions about implementing this at your firm? Schedule a consultation with us—we’d love to hear from you!
