Selecting Law Firm Accounting Software - A Legal CFO's Guide

Written by

Published on

Jun 6, 2025

Selecting Law Firm Accounting Software - A Legal CFO's Guide

Modern law firm accounting software functions as the central financial management system for legal practices, systematically recording all transactions and producing reports essential for operational oversight and regulatory compliance. These systems are designed to support the unique financial workflows inherent to legal practice while ensuring precision and transparency in all financial operations.

Essential Reporting Categories

Law firm accounting software generates three categories of reports:

1. Financial Statements

Balance Sheet: Provides a snapshot of the firm's financial position at a specific date, detailing assets, liabilities, and equity
Income Statement: Comprehensive analysis of revenue and expenses over a defined period
Statement of Cash Flows: Monitors cash movement across operating, investing, and financing activities to maintain optimal liquidity

2. Trust Accounting Reports

Client Ledger: Maintains individual accounting records for each client's trust funds, documenting all deposits, withdrawals, and current balances
General Ledger: Complete repository of trust account transactions, systematically organized by account type and transaction category
Three-Way Reconciliation Summary: Essential compliance document that compares bank balances, trust ledger totals, and individual client balance summaries

3. Management Reports

Collections by Timekeeper: Performance analysis of collection effectiveness by an individual attorney or staff member to identify productivity patterns
Unbilled Time and Expenses: Comprehensive tracking of completed work awaiting invoicing to optimize billing cycles and cash flow
Accounts Receivable: Detailed aging analysis of outstanding client balances and payment behaviors
Realization Reports: Comparative analysis of standard billing rates versus actual collected amounts, providing insights into pricing effectiveness and client payment patterns

Software Implementation Options

Law firms have two primary implementation approaches available:

Option 1: Integrated Legal-Specific Systems

Built directly into case management and billing platforms
Designed specifically for legal practice requirements

Option 2: General Accounting Software with Third-Party Integrations

Utilizes platforms such as QuickBooks or Xero
Data from the firm's case management and billing system integrates into the generic accounting systems.
The general accounting software was not designed to support law firms and struggle with capitalizing and tracking client costs, providing quick access to trust account reports, and managing high volumes of invoices and invoice payments. The integrations often break and require manual corrections.

Law Firm Specific Accounting Software

Below is a list of law firm accounting software, in alphabetical order. Our goal is to provide a complete list, though some options no longer receive significant updates and other options have reporting limitations. We work with firms to select an application that is a good fit for their needs.

‍