How this usually works
A good law firm accountant starts with a short discovery: business structure, jurisdiction, whether you operate a trust account, the practice system in use (e.g., LEAP, Smokeball, Actionstep, Clio or Practice Evolve), your general ledger (Xero, MYOB or QuickBooks), current pain points (trust recs, WIP, billing, debtors), and any audit or ATO deadlines.
From there the work typically runs in three layers: immediate triage (bring trust and office books current, clear reconciliation breaks, stabilise payroll and BAS), process design (map data flow from time entry to invoice to bank, set WIP and disbursement rules, document trust‑to‑office transfers), and ongoing review (monthly three‑way trust reconciliations, WIP and debtor reporting, partner dashboards and pre‑audit checks).
Australian context to keep in view
- Trust accounting is regulated at the state and territory level. Your accountant should follow your jurisdiction’s legal profession rules, maintain daily receipting and monthly three‑way reconciliations, and prepare you for the required annual external examination.
- ATO obligations continue in parallel: correct GST treatment on fees vs disbursements, timely BAS and PAYG, Single Touch Payroll Phase 2, super guarantee and year‑end tax. Strong alignment between the practice system and the ledger prevents BAS and tax errors.
What to compare before you commit
Scope
Confirm the scope covers trust and office bookkeeping, monthly three‑way trust reconciliations, WIP/disbursement controls, BAS, payroll and year‑end tax where required. Clarify whether audit support and pre‑audit checklists are included.
Software fit
Ask for real examples in your stack (LEAP, Smokeball, Actionstep, Clio or Practice Evolve + Xero/MYOB/QuickBooks). They should explain how time, WIP, invoices and trust transactions post to the ledger and how to keep ledgers in sync.
Turnaround and communication
Agree monthly close dates, trust rec cadence, escalation paths during audits and deadlines, and who signs off on WIP write‑ups/downs, disbursement rules and trust transfers.
Commercial fit
Compare fixed‑fee vs retainer, reporting depth (utilisation, realisation, WIP and debtor days), and whether you want compliance‑only or ongoing advisory/virtual CFO support.
Best next steps
Define the outcome you want: clean trust accounting, audit readiness, faster month‑end, stronger cash flow, clearer partner reporting or a full system migration.
Collect context for a faster start: most recent trust three‑way reconciliation, trust ledger, WIP and debtor reports, bank statements for trust and office accounts, payroll summaries, and any previous audit findings.
Then shortlist providers with proven law firm experience. If you also need broader support, see our Bookkeeping, Payroll services, Tax accountant and BAS agent services pages, or use the related pages below to move into the most relevant subtopic before you make contact.
Frequently asked questions
What does a law firm accountant do?
A law firm accountant handles trust and office bookkeeping, monthly three‑way trust reconciliations, WIP and disbursements, billing workflows, BAS and payroll, ATO lodgements and year‑end tax. They connect your practice management system with the general ledger so reports, BAS and audits line up.
Do I need a specialist for trust accounts and audits?
Yes. Trust accounting is tightly regulated. A specialist ensures daily receipting, monthly three‑way reconciliations, correct trust‑to‑office transfers and complete audit trails, and prepares your firm for the annual external examination required in your jurisdiction.
Which software should a law firm accountant know?
Ideally LEAP, Smokeball, Actionstep, Clio or Practice Evolve for practice management, plus Xero, MYOB or QuickBooks for the ledger. They should be able to trace a transaction from time entry to invoice to bank to reconciliation and explain how synchronisation and reporting work.
How should GST and disbursements be handled?
Whether GST applies depends on if the cost is a reimbursement or an on‑charged supply. Your accountant should set up clear rules and tax codes in both systems so BAS is correct and consistent. Obtain personalised tax advice for your firm’s circumstances.