Financially Legal

One of our most popular blog posts is a post about how lawyers can realize the benefits of a retainer without a trust account.  By storing a client payment method and subsequently charging the payment method in accordance with the attorney/client engagement agreement, firms can get the benefits of having access to funds on hand without the burden of trust account compliance.

Do you have practice management or accounting software that does your trust accounting? Great. This post is NOT for you.

Let's face it. Most bankers have no idea what an IOLTA account is. These types of accounts are an afterthought - one of those banking products that gets little attention. We hear horror stories of banks regularly debiting fees from IOLTA accounts or sending erroneous overdraft notifications to the Bar. We recently spoke to a firm that had to call their bank to speak with a real live human being every time they wanted to check their IOLTA balance. 

Lawyers make their living by helping others comply with rules and stay out of trouble. But every lawyer will tell you that there are gaps in their knowledge. And this is true even for a given lawyer’s professed area of expertise. So it’s not a surprise that most lawyers don’t understand - and perhaps don’t even want to understand - how technology and internet security work.

What’s a lawyer doing running an offshore virtual staffing firm? Starting in 2011 Brett Trembly built a successful business law firm, Trembly Law Firm, in Miami, Florida. They now employ 30+ people and nearly a dozen lawyers. 

On this special episode of Financially Legal, we’re announcing the launch of our integration with Lawmatics. Lawmatics is a Legal Intake Solution, Marketing Automation, and Law Firm CRM software all in one. Today they are announcing the launch of their time and billing module with Lawmatics payments powered by Gravity Legal.

Why do lawyers struggle to get paid for the work that they do? Whether it’s the low collection rates that we see in the Clio Trends Report to lawyers offering too steep a discount, to lawyers refusing to sue their clients, and on and on, “Show me the money” is definitely not the #1 mantra for many of our fellow lawyers.

We believe lawyers and law firms have the power to change the world. Every day we interact with lawyers making positive change, sticking up for the underdog and expanding access to the justice system. But we recognize there can be tradeoffs between pursuing these aims and paying the bills. 

Millions of business use QuickBooks as their accounting platform. From sole proprietors to large corporations, from cobblers to manufacturing firms, QuickBooks users come from all corners of the business world. With QuickBooks serving such a diverse set of clients, there are certain industries and business types with unique accounting needs that QuickBooks doesn't fully support out-of-the-box. Law firms fit into this category.  

Trust or IOLTA accounts evoke feelings of fear and frustration. Untangling trust accounting mistakes can devour precious hours, and the risk of running afoul of the rules of professional conduct is constant. Yet for all the bad, retainers (in particular evergreen retainers) are one of the top ways to improve your firm’s collection rate. With collection rates averaging around 85% according to the 2021 Clio Trends Report, collections is a major financial drain on the legal industry.  

In this, the fourth and final installment of our discussions with RJon Robins on the seven essential parts of a law firm, we move to the 5th and 6th essential parts of a law firm: physical plant and financial metrics and controls. The topic of physical plant naturally brings up the question of “whither physical law firms in the time of COVID?” We also discuss how intellectual property may be the most significant way that you can add value to your law firm. We wrap with a discussion of financial metrics and controls and the one metric that you as a law firm should be tracking. We also take a detour and talk briefly about Joe Walsh.

Whether a client unilaterally decided not to pay your firm, or you made a legitimate mistake in your billing process, disputes or chargebacks on credit card transactions do occur. The card brands have processes in place for settling these disputes, and this article outlines the actions your firm can take after receiving notice of a chargeback. For information on how to avoid chargebacks, see How to Protect Your Law Firm from Chargebacks.

Have you ever considered the role of profit in a law firm? No, I mean, really thought about what it is, why it exists, whether it should be a part of your firm, and/or how to grow it. If so, then this episode is for you.

Brooke Lively is the founder and CEO of Cathedral Capital. Her mission is simple: make law firms more profitable. And she’s written a book for lawyers all about it: From Panic to Profit.

In this, our third installment of our discussions with RJon Robins on the seven essential parts of a law firm, we explore the 3rd and 4th essential parts of a law firm: production and people. As a reminder, in episode #1 we discussed the seventh and final part of a successful law firm, the owner and in episode #2 we talked about sales and marketing.

In this, the second installment of our discussions with RJon Robins on the seven essential parts of a law firm, we dig in on the first and second essential parts of a law firm: sales and marketing. As a reminder, in interview #1 we discussed the seventh and final part of a successful law firm, the owner.

Is law a business or is it a profession? Are law firms like other businesses? Are they different? How different? 

RJon Robins is the CEO and Founder of How To Manage a Small Law Firm, the largest provider of fractional executive (CEO, CFO, COO) services for small law firms in the country. I’ve known about How To Manage a Small Law Firm for a number of years. I first attended and spoke at one of their quarterly meetings a few years back, when I was working for Avvo. I’ve since attended a couple of other meetings and spent more time with RJon. 

Vetting, deploying, and managing new technology takes a lot of time and can be expensive. More to the point, while much of today’s cloud computing technology uses some common technologies, the implementation can vary significantly even in the cloud. This can be a real headache for law firms who not only often deal with sensitive information but have specific rules and heightened standards regarding how confidential and privileged information must be protected. 

Small law firm owners may not be familiar with the terms "docker," "container," or "Kubernetes." They may even be a bit fuzzy on the definition of “the cloud.” But most firms know that, along with significant opportunities, new technologies often present security risks, interoperability challenges (will this system work with my other systems? And/or will my staff be open to using/willing to use this tech?) and, most relevant for the Financially Legal audience, significant costs in terms of time and money to vet, test, and deploy.

You can’t really blame consumer bankruptcy attorneys for being finicky about how they get paid. After all, would-be clients wouldn’t be knocking on the door if the those debtors had managed their money well and been able to regularly pay their debts. As a result, many bankruptcy attorneys do way more gymnastics than other lawyers to ensure they get paid. For example, insisting upon upfront payment, payment by the debtor’s friends or family, automated payments that fall a debtor-client’s payday, or even the development of a new type of bankruptcy, bifurcated bankruptcy, that changes how clients pay in order to improve their odds of getting paid (we won’t get into bifurcated bankruptcy here but watch this space for a subsequent post on the topic). You’ve got to hand it to them.

Listen, we here at Gravity Legal work hard for the money we get paid. Payments isn’t as mentally straining as rocket science or physically demanding as coal mining but it is a fairly complex regulated business and we work really hard to try and make things great for our law firm customers. And while there are still a handful of bar associations that want to make it harder for law firms to accept electronic payments (we’re looking at you Indiana, Iowa, Mississippi, Nebraska, West Virginia, Alabama, and Michigan), today most law firms are largely free to take advantage of the collections and convenience benefits that accepting electronic payments offers.  

We all know the cliches and the tropes: Lawyers are terrible business people, lawyers went to law school to avoid math, law firms aren’t businesses, etc . . . . 

Many of these statements are true in some pretty fundamental ways. But they’re also really damaging. Even if we take the most mission-driven do-goodery lawyer in private practice the simple facts remain that (a) they can’t help others if they, themselves, can’t survive financially, (b) they can’t help others very well if they’re constantly scrimping, saving, cutting corners, working late, and losing sleep due to financial issues, and (c) they’ll help more people with a larger law firm.

Superaccountant-to-law-firms extraordinaire, Chelsea Williams, has the remedy. Combining her dozen-plus years of accounting experience with the eye that she’s trained on legal in the form of her company, Core Solutions Group, Inc, which provides tax, accounting and cash management services exclusively for lawyers and law firms, Chelsea’s developed a course called “Law Firm Money Mastery” that’s designed to help all small firm lawyers - but particularly those just getting started up to those with $1M in annual revenue - to not only get their financial houses in order but to help them figure out how to make the money in their law firms work for them.

Gravity Legal's Dan Lear will present at the upcoming BEDLAM conference on August 26th at 9 AM PDT. The BEDLAM conference is put on by four legal marketing agencies and is packed with useful tools and tricks for firms to "help separate growth-minded firms from the pack."

On Monday August 23rd Gravity Legal will give a presentation on subscription legal services as a part of their broader half-day program: "Making your Legal Practice More Efficient in 2021: Outsourcing, legal subscriptions, modern project management, and the Agile Methodology"

Small law firms live or die by cash flow. A few extra percentage points on revenue can help a firm make payroll or pay rent (hopefully not, but “gulp!”), buy software, hire, experiment with a new practice area, or even innovate on a new product or service. But extra revenue rarely comes easy. What if you had a way—using existing systems—to immediately find additional revenue for your law firm?

Though lawyers are a solitary profession - they spend a surprising amount of time in their own heads - they’re also remarkably social. We made a cursory count recently and came up with 103 state, regional, local, and specialty bar associations. And we feel fairly confident that the total number is certainly double or even triple that. Feels like as long as there have been lawyers, there have been bar associations.

Gravity Legal's Dan Lear joined Jordan Ostroff from LegalEase Marketing on FaceBook live to discuss how law firms can improve money management and accelerate growth. You can catch the recording here.

Although electronic payments are not relevant for every firm, most law firms do at least a portion of their business by issuing ongoing invoices. For these firms, the data is clear: Electronic payments matter.