It is not uncommon for law firm partners to be so focused on helping their clients succeed that they lose sight of the general maintenance required to keep their firm competitive and profitable. Accountants for lawyers give firms the financial expertise they need to differentiate in the marketplace without distracting from client obligations.
Law firms that utilize financial experts have been proven to expand margins and profitability. For example, the vast majority of the Am Law 100 employ CFOs and in 2020 saw gross revenue increase an average of 6.6% to $11 billion, according to Colliers International. Aided by financial experts, those firms saw revenue per lawyer and profits per equity partner increase.
One major key to this success is hiring accountants with legal expertise. Specialized accountants for lawyers can help firms navigate unique challenges, such as:
- Properly managing IOLTA (interest-bearing trust accounts for client funds)
- Bookkeeping for large, multi-layered client transactions
- Steering the firm through a complicated and ever-shifting tax law landscape
- Preparing financial statements with fluid fees and payouts
While smaller firms might not have the capacity to hire high-level financial executives and accountants for lawyers, these specialists can be hired on an as-needed basis. This option gives firms access to accountants for lawyers at a fraction of the cost so that they too can benefit from financial expertise to drive profitability and competitive advantage.
So, how do you find the best accountants for lawyers? In this article, we present a number of considerations that can aid your search.
Identify What You Need: Do You Need An Accountant Or CFO?
The first step in finding the right people to manage your law firm’s finances is to decide what your firm actually needs. Accountants and CFOs bring a unique set of skills, and can both be hired on a full-time or part-time basis.
Accountants tend to:
- Manage company books, transactions and records
- Discover tax savings and prepare documents for filing
- Analyze and build/maintain financial statements
- Help companies stay in compliance with regulatory requirements
CFOs tend to offer broader strategic leadership, such as:
- Analyzing new growth areas for the business
- Assisting with mergers, acquisitions and fundraising
- Offering strategies to improve margins and cash flow
Scour Review Sites Of Top Accounting Firms
The next step is to review what an accountant’s past clients have said about their work. You can grasp a person’s skillset and whether they might align with your company culture by looking at third-party B2B review sites such as G2 and Clutch.
If working with a talent outsourcing company, such as The A Team, try asking for a free consultation to see if their Fractional CFOs can fulfill your law firm’s specific needs.
Hire An Accountant With Applicable Experience
It’s important to find an accountant with the most appropriate experience to help your law firm achieve its goals. Make sure the person you hire is an accountant for lawyers who understands the unique business models of law firms.
By hiring an accountant with applicable experience, law firms will receive help managing complex financial transactions. Attorneys are not only paid for their services (one type of transaction), they also handle settlements and payouts (another type of transaction), set up trust accounts to manage large sums of money for clients, and sometimes even are paid fees for services that haven’t yet been performed. Law firm books are fluid and complex, which can be confusing and intimidating for the wrong type of accountant.
Decide Whether You Want Full-Time Or Fractional Accountants For Lawyers
Perhaps you have the financial capability to hire a full-time accountant. If you don’t, not to worry: you can unlock all the same benefits much more affordably if you hire fractional accountants for lawyers.
Here are some benefits of hiring a fractional accountant:
- You control the hours and projects they work on
- You can hire different experts for different tasks
- You don’t have to pay salary and benefits
For smaller law firms, the vast majority of the company’s money might best be deployed hiring and supporting attorneys. They are, after all, the company’s product and driver of revenue. It might not make sense for these smaller companies on tighter budgets to hire an entire in-house finance department.
A fractional accountant can bring the financial expertise you need to reach new competitive goals, but on a part-time basis dictated by your specific budget.
The A Team Can Help Your Firm Grow
The A Team employs a dynamic team of best-in-class financial professionals ranging from accountants to CFOs. Many of our experts have experience working in the legal industry, and our company has successfully placed them with law firms of all sizes.
Law firms can trust that the financial experts we recommend have the right experience for the job. They’ll be able to navigate your firm through legal complexities and support long-term financial growth and success.
The A Team makes hiring a fractional accountant easy. Reach out today to get started.