Developing an Advisory Workflow to Support Legal Clients

Practice Management tax law and legal

tax advisory workflow

For many reasons, law firms make great clients, but as with most any industry, the key is to create a workflow for tax and accounting preparation that focuses on clients’ pain points and what you can do make their lives easier. When we begin work with a law firm, we find it essential to advise on practical modifications, while understanding the key elements of workflow, billing, compliance, trust accounts and more.

Welcome to our world! Under our combined companies, Create Collaborate, we are a team comprised of an enrolled agent and tax professional with an eye toward planning/strategy when it comes to entity formation and tax ramifications (Rebecca), and a legal bookkeeping and accounting/app integration specialist (Sarah). We believe that individual expertise and collaboration only benefit the client in the end. If Rebecca isn’t getting the data she needs for tax purposes, she can rely on Sarah’s knowledge of day-to-day workflow within the law firm to make it happen.

Certainly, setting up a tax and bookkeeping advisory workflow will save a law firm time and money, but it will also save them from the worst kind of financial surprises. When an attorney understands the real-time profitability of their firm, they don’t have to react with fear.

When you’re a trusted adviser to your clients, you’ll find that your relationship goes beyond reconciliations. You become someone they rely on to help their firms succeed and become profitable. That’s when your law clients will truly understand the value you provide.

Automation is an opportunity to make repetitive tasks less burdensome. When implementing a process that supports the flow of information, you begin to reap benefits for your own firm and bottom line. When you have a workflow that is streamlined with information reported in real time, everyone on the team, from the tax professional and accountant to the financial planner and the client, knows where the financials stand and can make decisions based on that information. This is the formula to be a trusted advisor.

To benefit not only the lawyers’ time but ours as well, we use LeanLaw, a legal app in the QuickBooks® App Store. LeanLaw is a timekeeping/billing/reporting app with real-time, two-way sync. In other words, you don’t have to sync because you are always in sync, and there are never two sets of books, ever. The lawyer also can interface with LeanLaw, more suited for entering time and notes. Redundancy is gone: The timekeeping is pushed to invoicing and then to QuickBooks Online to be sent out.

Setting up a tax and bookkeeping advisory workflow will save law firms time and money during the year, while giving them confidence in transparency. The end result is for the client to be less focused on accounting and financials in order to shift to what they are paid to do and enjoy.

Here’s an example. We have a law firm client that has a complex setup. Previously, the bookkeeping was falling short for tax planning and overall transparency for the owners.

Working together, Rebecca told Sarah what data is necessary for tax prep. In turn, Sarah, knowing the workflows of legal accounting, established them and planned for the year. The result? No surprises, monitoring for expected outcomes and intervening early if something goes awry.

The flip side? Not having this data would cost the law firm money when the tax bill comes due, in addition to the time spent sorting it out, not to mention worrying about how to sort it out and ensuring accuracy.

Even though the firm spent time with us up front, the flow for the rest of the year was easy. And, if there was a bump in projected earnings, we could plan for that as well, since we were paying attention in real time and had a proactive plan.

Having a team with a bookkeeper and tax accountant who work together will propel your clients’ business forward and give them the freedom to make decisions based on abundance rather than scarcity. This workflow has worked for us, and we hope it can work for you, too.