Law firm accounting that keeps your IOLTA right.
Trust accounting with monthly three-way reconciliation, retainer revenue management, contingency case tracking, and the tax planning that matters for solo and small firms.
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Law firm accounting has one feature no other small business has: the IOLTA trust account. Mishandle it and you are not just looking at a tax problem — you are looking at a Bar complaint. The rules vary by state but the principles are the same: client funds are not firm funds, every disbursement has to be documented, and the trust account has to reconcile to the penny every month using a three-way reconciliation (bank balance, ledger balance, individual client subaccounts).
We work with solo attorneys, small partnerships, and boutique firms. Most of our law firm clients use Clio Manage paired with QuickBooks Online — we reconcile the two monthly so the trust accounting holds up under audit and the operating account reflects reality.
What we handle for law firms
- IOLTA trust accounting with monthly three-way reconciliation per Colorado Rule 1.15.
- Retainer revenue recognition — earned vs unearned distinction, deferred revenue accounting on flat-fee work.
- Contingency case tracking — case costs advanced, recovery split, contingency revenue recognized on settlement.
- Trust-to-operating transfers documented per the matter's billing record.
- Cost recovery accounting — soft costs, hard costs, advanced costs separated and tracked.
- Partner draws and tax distributions for partnerships and PCs.
- Quarterly tax planning with multi-state apportionment for firms practicing in more than one state.
Software we work in for law firms
- Clio Manage + QuickBooks Online — the most common stack. We reconcile the Clio-QBO sync monthly.
- MyCase, PracticePanther, Smokeball — alternatives we know.
- QuickBooks Online with manual trust tracking — for very small firms not yet on practice management software.
Pricing
| Firm size | Monthly fee |
|---|---|
| Solo practitioner | $400 – $700 |
| 2–5 attorneys | $700 – $1,300 |
| 6–15 attorneys with partnership accounting | $1,300 – $2,800 |
Colorado Rule 1.15 requires monthly reconciliation of bank balance, ledger balance, and the sum of individual client trust subaccounts. We have onboarded firms where the three had not matched in more than a year — the kind of thing that turns into a Bar complaint when a client demands an accounting. Get this right, every month, no exceptions.
If you have an IOLTA, you need monthly three-way reconciliation. Period.
If you do contingency work, your case-cost accounting needs to track advanced costs separately and recognize revenue at settlement.
If you bill on retainer, the unearned-fees side of the operating account is what determines whether you are actually solvent.
Trust-account peace of mind. Operating books that match reality.
From $400/month for solos. We know Clio. We know the rules.
Frequently asked questions
How does IOLTA reconciliation work?
Three-way reconciliation: (1) bank statement balance, (2) trust account ledger balance in Clio or QuickBooks, (3) sum of individual client subaccount balances. All three must equal each other every month. Any discrepancy gets investigated and resolved before close.
When do I recognize retainer revenue?
Retainers held in trust are not revenue until earned. As you bill against the retainer, the earned portion transfers from trust to operating, and revenue is recognized at that point. Unearned retainer balances stay as a liability on the firm's balance sheet.
What about contingency cases?
Case costs advanced are recorded as receivables (not expenses). When the case settles, costs are recovered from the settlement, your contingency fee is recognized as revenue, and the remainder goes to the client. We track every case separately so the recovery math is clean at settlement.
Can you handle multi-state apportionment?
Yes. For attorneys practicing in multiple states, we apportion revenue by state-source rules and file in each state where you have nexus. This is common for transactional attorneys with clients across the Mountain West.
Do you work with Clio Manage?
Yes — Clio is our most-common law firm stack. We reconcile the Clio-to-QBO sync monthly, set up the trust account properly, and handle the matter-level reporting Clio provides.