Accounting for Attorneys

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...