Accounting for Attorneys

If you have ever wondered what your bookkeeper is doing behind the scenes, or if you are considering hiring one for the first time, this guide is for you. Understanding what a legal bookkeeper does, and how their work differs from a general bookkeeper, will help you make a better hiring decision and get more value out of the relationship once you do.

Legal Bookkeeping Is Not the Same as Regular Bookkeeping

A general bookkeeper handles the financial records for any type of business. A legal bookkeeper does all of that and then some. Law firms have a layer of complexity that most businesses never deal with: trust accounting, IOLTA compliance, three-way bank reconciliations, advanced client costs, and bar association rules that vary by state. These are not optional extras. They are non-negotiable requirements, and getting them wrong puts your license at risk.

When you hire a bookkeeper who does not specialize in legal accounting, you are essentially asking a general contractor to perfo...

If you’ve ever had a quiet thought of, “I hope no one ever really looks under the hood of these books,” this one’s for you.

At The Proper Trust, we spend our days (and more late nights than we’ll admit) inside law firm financials. We see the same patterns over and over, especially with firms who suspect something is off but can’t quite name it.

This blog is your financial health check: a tour of the biggest red flags we see in law firm accounting, what they actually mean, and when it’s time to bring in a specialist who lives and breathes legal bookkeeping.

1. Your Trust Account and Your Reports Don’t Match

Let’s start with the one that keeps lawyers up at night.

A quick self-test:

1. Run a Balance Sheet in your accounting software (e.g., QuickBooks Online).

2. Look at your trust bank account balance.

3. Look at your client trust liability total (often stored as “Funds held in trust” with individual client sub-accounts).

Those two numbers should match.

If they don’t, th...

In the world of law, your books should feel like a steady hand on the wheel, not a mystery novel filled with plot twists. Yet for many attorneys, their financials spark more questions than confidence. Whether you're a solo just opening your doors or a multi-partner firm with layers of complexity, the signs of trouble often look the same: sleepless nights, nagging doubts, and that quiet, persistent feeling that something in the numbers simply isn't right.

Here’s what every law firm should know.

1. Your Trust Bank Balance Doesn’t Match Your Trust Liability

This is the red flag of all red flags.

If the number on your balance sheet doesn’t match the trust bank balance, down to the penny, something is wrong. It might be timing. It might be user error. It might be workflow. Or it might be a deeper issue entirely.

But it should never be ignored.

Accurate trust accounting isn’t optional; it’s a professional responsibility. And when things drift out of alignment, most attorneys feel it in...