Flying Solo - Keeping your Books

Assuming you've completed the tasks in my previous post, you are now licensed and insured and ready to open up shop.  This may be in a shared office space (check your bar rules to make sure you are in compliance with where you operate), a private office space or a home office (again, check your bar rules). 

You're ready to take on a client...or are you?  Where are you going to deposit the check your first client hands you?  How are you going to record that deposit? 

You need to set up your books and bank accounts.  These are two very important tasks and you need to take your time to make sure they are set up properly and in accordance with your bar rules.  You will need an operating account and a trust account.  You may choose to set these up at two different banks to reduce the chance of accidentally depositing trust account money into your operating account.  Make sure your accounts are distinguishable in some way so that you are clear when you are writing a check from your operating account or your trust account (different check sizes, designs, etc.).  Talk with your banker about account fees: you will need to make sure you are covering an trust account operating fees out of your own pocket and that it is not coming out of the trust account itself (remember, the funds in the trust account are still owned by the client, not you). 

Once your bank accounts are set up, you need to determine how you will keep your books.  You always have the option of hiring someone to do this for you.  If you choose to hire someone, remember that you are ultimately responsible for all of the funds in your law firm and you need to closely supervise that person.  If something goes wrong, the responsibility and/or blame will fall on you.  Assuming you don't want to hire someone, do your research.  Use a program that works for you and that you fully understand.  See if there are some free or cheap seminars on how to use a particular program.  You will want to have a complete understanding of the program.  If your books are not set up properly at the beginning, it will be a huge headache trying to figure them out later.  Remember, your state bar can likely ask to inspect your trust account books at anytime to ensure you are following the proper rules. 

Take your time setting up your bank accounts and books and ask someone if you need help understanding any part of it.  This is one of the most important aspects of running a law firm and it is essential that you set up a process that is easy for you to follow and that your records are complete and accurate.  If you have decided to "fly solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.