Vermont Bar Association 2018 Tech Show Seminar Materials Using Technology to Overcome Common Billing and Accounting Pitfalls May 16, 2018 DoubleTree (formerly Sheraton) S. Burlington, VT Speakers: Erica Birstler, Cosmolex Paula McCann, Esq.
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Vermont Bar Association
2018 Tech Show Seminar Materials
Using Technology to Overcome Common
Billing and Accounting Pitfalls
May 16, 2018
DoubleTree (formerly Sheraton)
S. Burlington, VT
Speakers:
Erica Birstler, Cosmolex
Paula McCann, Esq.
www.cosmolex.com
Using Technology to Overcome Common
Billing & Accounting Pitfalls
Erica BirstlerDirector of Strategic Communications
CosmoLex Cloud, LLC
Paula McCannPartner
McCann, Morgan & Getty, PLLC
www.cosmolex.com
▪ What is Legal Accounting?
▪ 5 Legal Billing & Accounting Pitfalls
▪ How Can Technology Help?
Agenda
slide 2
www.cosmolex.com
Legal Accounting Components
▪ Business Accounting
▪ Matter Cost / Income Accounting
▪ Fee Advances / Retainers Accounting
slide 3
www.cosmolex.com
Not Using
Matter-Centric
Recordkeeping
Pitfall #1
slide 4
www.cosmolex.com
Five Pillars of Practice Mgmt.▪ Legal Time & Billing
▪ Business Accounting
▪ Documents & Emails
▪ Calendar & Tasks
▪ Trust Accounting
slide 5
www.cosmolex.com
▪ Unpaid Amounts
▪ Unbilled Amounts
▪ Client Funds
Important Matter Balances
slide 6
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Poor Handling
Client Funds
Pitfall #2
slide 7
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Funds in Trust
▪ Settlement funds ○ Personal Injury, Real Estate
Settlements...
▪ Unearned Income ○ Fee & Cost Advances
○ Retainers
▪ Third-Party funds
slide 8
▪ Personal Funds▪ Earned Income▪ Payroll/Business Funds▪ Where You Are Not Fiduciary
Trustee
Funds NOT in Trust
www.cosmolex.com
▪ No Profit or Loss▪ No Depreciation or Amortization▪ No Interest Accumulation▪ No Tax Accounting▪ No Account Management Fees/Bank Fees
slide 9
Trust Accounting Is Easy
www.cosmolex.com
▪ You MUST track funds for each matter.▪ You MUST reconcile books monthly.▪ You MUST maintain audit trail
slide 10
Trust Accounting Is Hard
www.cosmolex.com
So What Goes Wrong?
▪ Lack of trust-specific knowledge & rules▪ Small Law Firm Challenges▪ Manual Systems▪ Trust Funds Gets Commingled▪ Trust Ledger Overdrafts▪ Absence of Safeguards ▪ Un-cleared Funds Not Addressed▪ Bank Reconciliation is Sloppy▪ Billing & Trust records are kept separate
slide 11
www.cosmolex.com
Unrecorded
Charges
Pitfall #3
slide 12
www.cosmolex.com
▪ Completed yet unbilled events & tasks
▪ Outside the office legal services
▪ Frequent office disruptions
Time Tracking
slide 13
www.cosmolex.com
▪ Expenses are paid in variety of ways.
▪ Expenses not allocated to matters.
Expense Tracking
slide 14
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Inefficient Billing & Collection Process
Pitfall #4
slide 15
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▪ Timely Billing
▪ Detailed, Professional Bills
▪ Multiple Payment Options
▪ Periodic collection notices
▪ Track retainer balances
▪ Periodic retainer replenishment notices
▪ Track unbilled amounts
Efficient Collection
slide 16
www.cosmolex.com
I Love Billing I Love Accounting
Pitfall #5
slide 17
Isolated Billing & Accounting
Billing World Accounting World
www.cosmolex.com
▪ Customization for Legal Accounting
▪ Double data entry
▪ Handling Client Funds
▪ Client costs recovery
▪ Allocate revenue receipts
▪ Tracking income by class
Consequences of Isolated Systems
slide 18
slide 19 www.cosmolex.com
www.cosmolex.com
Questions/CommentsThank you for joining us!
slide 20
Erica BirstlerCosmoLex Cloud, LLC
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