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13 Best Law Firm Accounting and Bookeeping Software for 2024

Choose the best legal accounting software to keep your small or large law firm's finances organized!

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Jun 28, 2024
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The backbone of any thriving legal practice is a robust accounting and financial management system. Law Firm Accounting Software are digital tools that provide comprehensive financial management capabilities for law firms. They handle everything from tracking revenues, expenses, and profits (general/business accounting) to managing client funds held in trust (Trust/IOLTA accounting). These software are designed to ensure the smooth running of your law firm’s financial operations and compliance with legal standards. A robust accounting platform like Tabs3 offers comprehensive, reliable, and strong accounting capabilities, supported by excellent user support and a longstanding reputation.

Why Do Law Firms Need Accounting Software?

Law firms require accounting software because they deal with intricate financial activities that are unique to the legal profession. Practice management software, which integrates with accounting software, is essential for managing a law firm's clients, contacts, cases, and billing, and has unique requirements for trust accounting and billing. Unfortunately, these complexities are not appropriately addressed by general accounting software.

Legal accounting software helps law firms manage client payments, track billable hours, create client invoices, and keep strict regulatory compliance, particularly IOLTA compliance for client trust accounts.

Such software also provides reporting capabilities for analysis and visual data representation, which can deliver insights on a law firm’s financial health.

Benefits of Using Accounting Software for Lawyers

There are copious benefits to using accounting software meant for legal firms rather than relying on traditional, manually intensive methods:

  1. Accuracy and Efficiency: These software reduce errors and increase speed in financial record keeping. They automatically calculate fees, taxes, expenses, and generate accurate invoices, thereby reducing the time spent and potential mistakes. Additionally, they minimize the need for manual data entry, saving time and reducing the risk of human error.
  2. Reporting and Analysis: They generate detailed financial reports that support strategic decision-making. This helps identify revenue sources, analyze profitability, and manage cash flow.
  3. Regulatory Compliance: With built-in IOLTA regulations, these software help maintain compliance, avoiding steep penalties and improving reputation among clients.
  4. Client Trust Account Management: Legal accounting software makes it safer and easier to manage client trust accounts. It segregates client funds from the firm’s operating funds and helps maintain accurate balance for each client.
  5. Integration with Other Systems: Most of these software can integrate with case management systems, CRM software for law firms, payment processors and more, creating an efficient ecosystem that optimizes work.

Top 13 Accounting Software for Law Firms

Accounting software for law firms is vital for busy and growing offices. As you would imagine, there are numerous market options, each with particular and sometimes peculiar characteristics and features. Below, you'll find a short breakdown of some of the more popular options for accounting software for law firms.

FreshBooks

FreshBooks
Source: FreshBooks

Tens of millions of people have relied on FreshBooks, making it a solid choice for your firm. This comprehensive accounting tool can help you manage every aspect of your firm’s business, including expenses and revenues, client information, and communications. It also excels in managing business accounts with advanced reconciliation features like three-way trust account reconciliation.

Some of the tasks that FreshBooks will help you with include the following:

  • Tracking and monitoring time and resources spent on each client
  • Managing invoices and receipts
  • Accepting all main forms of payment in multiple currencies
  • Creating financial reports, such as expense and profit-loss reports

FreshBooks offers four levels of monthly pricing:

  • Lite ($4.50): Services for up to 5 billable clients, invoice services, and business tracking
  • Plus ($7.50): Services for up to 50 billable clients and double-entry accounting
  • Premium ($15.00): Unlimited billable clients and other included services
  • Select: Support for specific needs with custom pricing models

Pros:

  • High-level features
  • High-performing workflow automation
  • Formidable security and encryption features
  • User-friendly and intuitive interface

Cons:

  • Templates used for invoices should allow more customization
  • It may be difficult to incorporate retainers

Zoho Books

Zoho Books
Source: Zoho Books

Zoho Books is one of the more affordable law firm accounting software options. But don't let that fool you into thinking it is incomplete or lacks essential features. Zoho Books gives users access to all of the key features offered by more expensive programs, including:

  • Quote and invoice generation
  • Expense and receipt management
  • Time tracking
  • Payment monitoring
  • Automated recurring financial transactions

Pricing for Zoho Books is offered in five different monthly plans:

  • Standard ($15): Supports 3 users and 5,000 invoices
  • Professional ($40): Supports 5 users, plus invoices and other services
  • Premium ($60): Supports 10 users and includes various services
  • Elite ($120): Supports 10 users and includes premium features
  • Ultimate ($240): Supports 15 users and includes advanced analytics for your firm

Pros:

  • Great integration with specific apps
  • Great for invoices and billing
  • Cost-effective and easy to manage

Cons:

  • Mobile app does not allow payment
  • Better options are available for larger businesses

Sage Accounting

Sage Accounting
Source: Sage Accounting

Sage Accounting is most suitable for smaller law firms and sole proprietors. Still, it is not lacking in functionality and features. Instead, it is a straightforward program that can give law firms peace of mind that their operations are being managed and monitored reliably.

Some of the great features that come with Sage Accounting include:

  • Invoice and bill management
  • Automated updates for transactions
  • Comprehensive financial reporting
  • Financial reporting capabilities tailored to the needs of law firms
  • Monitoring of time and money spent on each client
  • Access to cash flow predictions
  • Automatic bank reconciliation
  • Inter-office networking capabilities
  • Payment services in multiple languages and currencies

Sage Accounting has two pricing levels: First, a $10 per month plan grants access to one user and includes essential services. For $250 a month, you can have unlimited user access to the program and a wider array of features and services.

Xero

Xero
Source: Xero

Xero is growing fast as an accounting management option for small and growing law firms. One of its most attractive features is no limit on the number of users allowed access. Another feature that makes it one of the top choices for many small law firms, is its ease of use and intuitive interface.

Some of the great services that come with Xero include:

  • Views for both cash flow and accounts payable information
  • Pay Now buttons for invoices
  • Invoices customized for clients
  • Tracking of project costs and time requirements
  • Storage for bills, invoices, and receipts
  • Over 1,000 integrations and support for 160 currencies
  • Expense management and tracking

Three monthly plans are available with Xero:

  • Early ($12): Offers support for 20 invoices and basic features
  • Growing ($34): Provides bulk transactions for reconciliations
  • Established ($65): Provides in-depth expense and project tracking and reporting

Xero offers a 30-day trial period for firms that want to test the water without making a long-term commitment.

Pros:

  • Unlimited users for every plan
  • Reliable and secure
  • User-friendly interface
  • Customizable reporting

Cons:

  • The starter plan has limited invoicing capacity
  • Cancellation requires one month's notice
  • The mobile app lacks full features

FreeAgent

FreeAgent
Source: FreeAgent

FreeAgent is not the most well-known accounting program, but those who use it love it. It's touted for its simplicity, efficiency, and many tools. Small and upcoming law firms will find FreeAgent a great match as they work to thrive in the legal industry.

Some of the great features that come with a subscription to FreeAgent are:

  • Accurate expense tracking
  • An array of project management features and tools
  • Mobile and desktop time and resource tracking
  • Automated and recurring invoices
  • Bank account linking
  • Support for multiple currencies and languages
  • Sales tax tools

FreeAgent has just one plan, giving law firms unlimited access to every feature the program offers without long-term contracts. At $10 per month for the first six months and $20 after, the price is just right for law firms on the move.

Pros:

  • Very easy to use
  • Great customer support
  • Many options for automation
  • Unlimited access to all features

Cons:

  • Less flexibility with only one plan
  • Mobile print is too small to see without zooming
  • Not particularly conducive to growing a business

TaxSlayer

TaxSlayer
Source: TaxSlayer

As the name implies, TaxSlayer is a powerful software for all things tax-related. It allows firms to execute a variety of tax actions, as well as create and send important financial and tax documents. Millions rely on TaxSlayer to ensure they comply with all of the necessary tax regulations and adequately fulfill their tax duties.

Special features that are available with TaxSlayer include:

  • 100% guarantee on tax calculations
  • 1040 filing
  • 1099 income tax services
  • Quarterly tax payment reminders
  • Access to all major IRS tax forms and documents

Pricing for TaxSlayer includes one free plan and three paid plans:

  • Free: Includes 1040, state tax filing, educational expenses, and phone support
  • Classic ($29.95): Also includes earned income tax credit computing and child tax credits
  • Premium ($49.95): Includes phone and email support along with tax pro and IRS audit assistance
  • Self-employed ($59.95): Provides 1099 assistance with professional and personalized guidance

Pros:

  • Easy to switch from another provider
  • Support for major IRS forms and documents
  • Simplifies tax returns
  • Fast and user-friendly, as well as affordable

Cons:

  • No carryover provided for foreign taxes
  • Help resources are a bit lacking

Zola Suite

Zola Suite
Source: Zola Suite

Zola Suite is an option with some of the most powerful and plentiful tools for law firm accounting and bookkeeping. It offers most—if not all—of the tools, other software options, and some of its unique features, most notably various management capabilities. You can track time manage your contacts, documents, and other aspects of your law firm's operation with Zola Suite.

Key features of this software that is used often for larger law firms include:

  • Case management and tracking
  • Scheduling and task assigning
  • Premium calendar services
  • Customized intake forms and entry fields
  • User access
  • Role management
  • Report creation
  • Trust account management
  • Retainer management and tracking

Pricing is available at three levels with Zola Suite:

  • Core ($59): Includes basic accounting and document services
  • Enterprise ($79): Offers unlimited document storage, CRM software, and tracking
  • Enterprise Plus ($89): Includes department-based accounting and other premium features

Pros:

  • Automated calendar functions
  • Great for highly active firms
  • High-level support and a user-friendly interface

Cons:

  • The client portal presents some complexities
  • Voids and refunds are a bit more complex than necessary

PCLaw

PCLaw
Source: PCLaw

PCLaw has made its name a one-stop shop for cloud based solutions that works well in any situation, especially with large law firms. Everything a big operation could want and need from an accounting software solution is available through PCLaw.

Features of this software solution include:

  • Management of calendars, matters, and documents
  • Billable and non-billable time tracking
  • Tools that streamline your financials and reconciliations
  • Comprehensive data at your fingertips
  • Fast document generation and template creation
  • Bill payment collection and expense tracking
  • You can fill out a form on the PCLaw website to receive a quote for specific services.

Pros:

  • Packed with tools and features
  • Simple tracking of time, deadlines, and filings
  • Highly customizable
  • High-end reporting functionality

Cons:

  • Basic functionality from the mobile app
  • It does not come with a payroll system
  • Lacks upfront pricing
  • Not affordable for many smaller businesses

LeanLaw

LeanLaw
Source: LeanLaw

LeanLaw was designed with the midsize law firm in mind and is specially equipped to handle the time tracking and monitoring, billing, and trust needs of law firms. When you add QuickBooks through instant integration, you can easily access a full suite of tools to help you to manage expenses for your small or midsize law firm.

Special features that come with LeanLaw include:

  • Individual client trust account tracking
  • Client trust ledger creation and management
  • Monitoring of time and expenses
  • Three-way bank reconciliation in real-time
  • Automated financial trust reports
  • Customized, automated workflows
  • Bill generation and automation of payments
  • Attachments to important documents

Two annual plans are available with LeanLaw. The monthly price of each includes the following:

  • Core ($40): Expense and time tracking and capped bulk invoicing
  • Pro ($55): LEDES billing, uncapped bulk invoicing, multiple trusts, and more

If you prefer a month-to-month subscription, the price goes up to $50 and $65 for the Core and Pro plans.

Pros:

  • Great for law firms and lawyers who also use QuickBooks
  • Efficient mobile time-recording capabilities
  • User-friendly

Cons:

  • Not a comprehensive solution without QuickBooks
  • Lacks some features and tools
  • Billing customization is lacking

TimeSolv

TimeSolv
Source: TimeSolv

TimeSolv excels at project tracking, but project tracking isn't all this software option does. It allows you to efficiently and easily manage your firm's legal billing aspects and the other important financial transactions you engage in, from expense tracking to automatic payment processing. TimeSolv can also take care of your firm's tax calculation and filing needs.

Some TimeSolv features include:

  • Simultaneous tracking of multiple projects
  • Customization of invoice templates for efficient billing
  • Payment collection and management
  • Multiple report-viewing formats
  • Multiple trust account management
  • Auto-pay setup for invoices
  • Easy integration with various popular programs like QuickBooks and Xero

Pricing for TimeSolv is based on how many people will use the software. Paying by the month is more expensive and costs $39.95 per user. Purchasing an annual subscription saves you $4 per user per month.

If you are on the fence about TimeSolv, you can take advantage of their 30-day free trial to give them a shot. TimeSolv also offers a six-month money-back guarantee for those who purchase the service but are not happy with it.

Pros:

  • Free trial and great money-back guarantee
  • User-friendly platform
  • Efficient time and accounting management and tracking capabilities
  • Easy billing setup

Cons:

  • Trust account management is not as simple as other functions
  • The calendar lacks a reminder feature
  • The reports feature needs more customization

CosmoLex

CosmoLex
Source: CosmoLex

CosmoLex is another great all-in-one option for law firms. No additional software is necessary to access the powerful accounting and bookkeeping tools that you would expect to find in high-quality programs. Whatever it is you need to do, you are likely able to do it with CosmoLex.

Some of the many services that CosmoLex offers include:

  • Generating trust accounting reports
  • Printing checks for disbursements
  • Creating professional and customizable invoices
  • Generating bulk invoices

These listed services are in addition to most accounting software's standard features, including expense tracking, calendar and document management, and report generation.

Pricing for this all-in-one cloud-based software solution comes at a whopping $85 per user per month and is billed annually. This is more expensive than most basic software programs but cheaper than some premium plans for other options.

Pros:

  • All-in-one accounting and bookkeeping solution
  • Attentive customer support
  • Lots of tools and features
  • Client portal for the uploading of documents by clients
  • Simple pricing structure

Cons:

  • It has a learning curve
  • May experience glitches from time to time

ZipBooks

ZipBooks
Source: ZipBooks

ZipBooks is considered by many to be the best accounting software for smaller law firms. It includes standard features and is incredibly easy to navigate. On top of that, ZipBooks is more than reasonably affordable; it's highly affordable compared to many options.

With ZipBooks, you have access to the following tools and features:

  • Client management tools
  • Effective time tracking
  • Automated billing and invoice management
  • Online payment options with PayPal and Stripe

ZipBooks offers a free option with basic features. It also offers three monthly plans:

  • Smarter ($15): Supports five users and includes time-tracking capabilities
  • Sophisticated ($35): Supports unlimited users and secure document sharing
  • Accountant: Custom-priced option with client support and more

Pros:

  • Free plan
  • Easy to learn and manage
  • Offers time tracking by client and project
  • Supports invoice management
  • Generates statements and reports

Cons:

  • There is currently no ZipBooks app
  • ZipBooks is designed to be used in North America

QuickBooks Online

QuickBooks
Source: QuickBooks

QuickBooks is an industry leader among legal professionals and one of the oldest accounting software options. Countless law firms have used the features QuickBooks offers to handle their financial and legal concerns. Although it can benefit law firms of any size, QuickBooks tends to work well with smaller and midsize firms.

Some of the fantastic features you'll get when going with QuickBooks include:

  • Convert estimates into invoices
  • Track bills, expenses, and revenue
  • Create and review various reports of your firm's finances and overall health
  • Extensive communication and networking between your firm's devices
  • Multiple forms of payment processing
  • Sales tax capabilities

QuickBooks offers four levels of pricing by the month:

  • Simple Start ($15): Includes all standard features and access for one user
  • Essential ($27.50): Includes access for three users with invoice management
  • Plus ($42.50): Offers access for five users with inventory and profitability projections
  • Advanced ($100): Allows access for more than five users and many additional features
  • Self-Employed ($7.50): Offers quarterly tax help and standard accounting tools

Each plan's prices increase after three months to $30, $55, $85, $200, and $15, respectively.

Pros:

  • Ability to make cash flow projection
  • Time and expense tracking tools and features
  • Integration capabilities with over 600 apps
  • Invoice management

Cons:

  • No free plans are available
  • The Simple Start plan only allows access for one user
  • The learning curve is a little steep
  • Budget-tight law firms might have trouble affording the plans

How to Choose the Best Accounting Software

Choosing the best accounting software for your law firm depends mainly on your unique needs, budget, and preference for best legal accounting software. However, here are some crucial considerations to keep in mind:

  1. Features: Make sure the software addresses your firm's unique accounting needs. Double-entry accounting, billable hours tracking, and trust accounting are a few legal-specific features you cannot afford to miss. You may also want functionalities like banking transactions tracking, customizable invoicing, or mobile access depending on your work style.
  2. Usability: Look for software that's user-friendly. Its design and layout should be intuitive, appealing, and easy to navigate. A steep learning curve may hinder effective implementation of the software in your firm.
  3. Integration: If you're already using other software for managing your legal practice, make sure your chosen accounting software can seamlessly integrate with them.
  4. Cost: Align your selection with your budget. There are useful options across various price ranges. Research the pros and cons thoroughly, then decide on the features and usability you're getting for the price.
  5. Customer Support: Quality and speed of customer support can be critical, considering the importance of your financial data. Look for a provider known for their responsiveness and helpfulness.
  6. Security: As you'll be dealing with sensitive financial data, ensuring the software has strong security measures in place is a must. This can range from user authentication to data encryption and secure servers.

Features You Need in Accounting Software

The features you require in your accounting software will align with your unique needs as a law firm or accounting solution, but here are some key functions to consider:

  1. Trust Accounting: This feature helps you manage client trust funds while keeping in line with regulations.
  2. Time Tracking and Billing: You should be able to track every billable minute and generate invoices accordingly.
  3. General Ledger Management: Record all financial transactions and generate financial statements to gauge the financial health of your firm.
  4. Expenses Management: Keep track of paid bills and expenses incurred by your firm.
  5. Bank Account Management and Reconciliation: The software should allow seamless synchronization with your bank account and facilitate reconciliation tasks.
  6. Reporting and Analytics: You should be able to generate a variety of reports (Profit & Loss, Balance Sheet, etc.) for financial analysis.
  7. Invoicing: Automated and customizable invoicing enables quick and easy billing.
  8. Integration with Other Software: Integration with legal practice management systems or other relevant tools being used by your firm will enhance productivity.
  9. Data Security: The software must provide adequate measures to safeguard your sensitive data.
  10. Mobility: A mobile-app version of the software will enhance accessibility and enable you to manage your accounts on the go.

Bottom Line: Choosing Your Ideal Legal Accounting Software

Choosing the right legal accounting software is a significant decision for any law firm or individual practitioner. The right legal billing software manages your firm's accounting, saves time, reduces risk, and streamlines the practice's finances.

Make sure you dive into the software's capabilities to understand how its features can meet your necessities. Ask vendors for samples, demos, or trials to get hands-on experience. Whether you’re a solo practitioner needing simple and affordable solutions or a larger firm of legal practitioners demanding high-end features and scalability, there is a software out there for you.

Remember the aim is to pick a software that simplifies, rather than complicates, the accounting process for your own law practice or firm. With careful planning and research, you can find the perfect fit that streamlines your firm’s accounting, helping it prosper.

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