The legal industry is unlike any other. Does your accountant have the specialized experience you need?
At Gibbons & Gibbons, we’re focused on providing expert accounting and business advisory services to professional services firms, with particular expertise in serving law firms. Specializing in a particular type of company, and defining an industry niche, enables us to provide the best possible service to our clients.
We came across a fascinating article by Michael J. Nathanson and Stephen R. Stelljes of The Colony Group, entitled Specializing on Specialists: Financial Planning for Lawyers. In this piece, the authors argue that in order to maximize the effectiveness of a financial plan, the financial planners must understand the client’s industry. “In this sense, financial planning for members of any profession should be approached as a specialty, specifically targeting the distinct, comprehensive needs that come with membership in that profession. Lawyers particularly require financial expertise and experience focused on the unique parameters created by practicing law.”
We agree wholeheartedly: lawyers and law firms have specific financial needs that are unique to their industry. We would go even further, in fact. The need for specialist service applies to the firm’s accounting and business strategy as much as – if not more than – financial planning for individual attorneys. Small and medium-sized law firms can benefit dramatically from working with an accounting firm that specializes in working with law firms.
Here are three areas in which industry experience makes a big difference:
Income forecasting
The billable hour remains the cornerstone of most law firms’ billing practices. Is your firm getting the most accurate billing possible? We have helped many clients make the transition to cloud tools. These can hep you eliminate lost time and enable law firms to track billable hours for each client efficiently and accurately, without a system that’s cumbersome to manage.
Income fluctuations make cash-flow management a key element of any law firm’s success. We help our clients create projections, manage accounts payable, and shorten the time to payment for accounts receivable. A healthy cash flow means a healthy business.
Tax optimization
Law firms structure employment agreements with their lawyers in different ways. Some pay employees as contractors, while others hire most of their attorneys as regular, full-time employees. Some employment agreements may also involve bonuses or profit-sharing structures. Which setup makes most sense for your firm depends on a host of factors – and it can change over time. A law-firm specialist accounting firm can help you make the best call for your business.
Employment considerations are just the tip of the iceberg, however. Is your business entity the most advantageous for taxes? Are there better ways to structure income and expenses? Are there less burdensome ways for your firm to stay in regulatory compliance?
These are complex questions, and we’re here to help you answer them. Contact us to learn more about the specialized services we offer law firms of all sizes.
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Joe Gibbons, CPA is managing partner of Gibbons & Gibbons, P.C., a Northern Virginia-based accounting and business advisory firm that specializes in working with law firms and other professional service providers.
Photo by Giammarco Boscaro on Unsplash
