Law firm bookkeeping
Law Firm Bookkeeping Services and IOLTA Trust Accounting
Monthly books, trust account reconciliations and clear reporting for Dallas–Fort Worth law firms, from solo practices to growing multi-attorney firms.
Short answer: LUCI Financial Solutions provides law firm bookkeeping services in Dallas–Fort Worth and nationwide: monthly bookkeeping and IOLTA trust accounting for Texas law firms, built around the part general bookkeepers most often get wrong: client trust money. Each month our team reconciles your operating account and your IOLTA or other trust account, ties the individual client ledgers back to the bank, and delivers a reviewed Profit & Loss, Balance Sheet and Statement of Cash Flows from QuickBooks Online. You get books that show what the firm actually earned, and trust records that show whose money is whose.
Why law firm books are different from other service businesses
Most service businesses have one pot of money. A law firm has two, and the rules treat them very differently. Money the firm has earned belongs in the operating account. Money that still belongs to a client or a third person, such as an unearned retainer, an advance for filing fees or settlement proceeds, belongs in a trust account. In Texas that obligation comes from Rule 1.15 of the Texas Disciplinary Rules of Professional Conduct, “Safekeeping Property,” which was numbered Rule 1.14 until October 1, 2024.
That split changes how the books have to be kept:
- A retainer is not revenue. An advance fee deposit stays client money until it is earned, so it should never show up as income the day it arrives.
- Every trust dollar needs an owner. The trust bank balance has to be backed by a ledger for each client, and no client’s ledger can go below zero.
- Costs move in both directions. Advances for filing fees sit in trust until they are paid out, while reimbursements for costs the firm already fronted belong in operating.
- The paper trail matters. Texas lawyers must keep complete trust account records for five years after the representation ends.
We are bookkeepers, not lawyers, and we do not give legal advice; the attorney stays responsible for the trust account. Our job is to keep the records accurate, reconcile them monthly and flag problems while they are small. The State Bar of Texas publishes A Lawyer’s Guide to Client Trust Accounts, which is the best starting point for the rules themselves.
What we handle for Dallas law firms each month
Trust account reconciliation
A monthly three-way reconciliation of the trust account: adjusted bank balance, trust register and the total of all client ledgers, on the same date. Differences are investigated and documented, not plugged.
Retainer and advance-fee tracking
Deposits recorded to the right client, earned-fee transfers matched to the invoices your attorneys approve, and unearned balances visible at any time, so the firm can answer a client’s “how much is left?” question quickly.
Operating books and month-end close
Bank and credit card reconciliations, clean categorization, and a monthly close led by a senior accountant, with financials reviewed at a senior level before they reach you.
Legal billing and receivables
Accounts receivable that match your billing system, collections visibility, and client cost reimbursements tracked so advanced costs are recovered instead of written off by accident.
Partner draws and firm expenses
Owner draws, distributions and partner expense reimbursements recorded separately from firm overhead, so profit per partner and the true cost of running the firm are clear.
Reporting that answers owner questions
A monthly Executive Summary with your Profit & Loss, Balance Sheet and Statement of Cash Flows, plus a year-end package for your tax preparer.
Trust money or operating money: where common law firm transactions belong
This table reflects the general guidance in the State Bar of Texas trust account guide. Your fee agreements and the rules control how a specific payment is treated, and your attorney makes that call.
| Transaction | Where it generally belongs | Bookkeeping note |
|---|---|---|
| Advance fee deposit or hourly retainer | Trust, until earned | Record to the client’s ledger; move to operating only as fees are earned and billed. |
| Flat fee not yet earned | Trust, until earned | Calling a fee “nonrefundable” does not make it earned. Benchmarks in the fee agreement drive the transfers. |
| Payment of an invoice for completed work | Operating | Earned fees should not be deposited into trust. |
| Advance for filing fees or court costs | Trust, until the cost is paid | Pay the cost from trust against that client’s ledger. |
| Settlement proceeds | Trust, until disbursed | Every disbursement is tied to the client and the payee, with a settlement statement on file. |
| Reimbursement of a cost the firm already paid | Operating | Clears the client cost receivable in the operating books. |
| Bank service charges on the trust account | Firm funds, kept to a minimum | Only an amount reasonably sufficient to cover fees or keep the account open, tracked on its own ledger. |
How monthly law firm bookkeeping works with LUCI
- Onboarding and review. Over a typical 2–4 weeks we get access to QuickBooks Online, your bank feeds and your billing or trust software, review the books for accuracy and configure reporting. If the trust records need significant cleanup, you get a separate fixed-fee proposal first.
- Monthly transaction work. Operating and trust activity is recorded and categorized, with each trust deposit and disbursement tied to a client and a purpose.
- Reconciliation. The operating accounts are reconciled to the bank, and the trust account gets a three-way reconciliation against the client ledgers.
- Senior review. A senior accountant reviews the financials and the reconciliation before anything is delivered.
- Delivery and follow-up. You receive your monthly reports and a short list of anything that needs an attorney’s decision, such as a stale client balance or an unmatched deposit.
Solo attorneys, immigration practices and growing firms
A solo attorney who has been reconciling trust at night usually needs the Core tier: monthly bookkeeping, reconciliations, senior review and monthly statements. An immigration practice often has a high volume of small matters, flat fees earned in stages and advances for government filing fees, which makes careful client-level trust records essential. A multi-attorney firm adds partner draws, budgets and cash planning.
As the firm grows, the Growth tier adds quarterly review meetings, budget-to-actual and cash flow trend reporting. The Scale tier adds a CFO-level partner for cash flow forecasting, pricing and margin analysis and coordination with your CPA, and our fractional CFO services are also available on their own. Tax preparation is available as an add-on for ongoing clients. We work virtually, with multi-factor authentication, role-based access and encrypted file sharing.
What an IOLTA bookkeeper does, and what stays with the attorney
Many firms search for an IOLTA bookkeeper when what they really need is someone who keeps three records in agreement every month: the trust bank statement, the trust account journal, and a ledger for each client. That is the core of IOLTA bookkeeping services at LUCI.
- We record every trust deposit and disbursement against the right client matter, the day-to-day work handled by our bookkeeper, Inday Reo Pedere, who has 7 years in QuickBooks Online.
- We reconcile the trust account three ways each month, and Erin Marchbanks, our Senior Accountant with 15+ years of experience, reviews it before you receive it. Our guide to IOLTA three-way reconciliation shows what that report contains.
- We flag anything that needs a decision: a client ledger below zero, an unidentified deposit, earned fees still sitting in trust, or a balance that has not moved in months.
- The attorney decides. Signing authority over the trust account and responsibility under the rules stay with the lawyer. We never move client money on our own judgment.
Bookkeeping services for law firms outside Texas
We are based in Dallas–Fort Worth, and our legal bookkeeping services are delivered virtually, so firms outside Texas work with us the same way local firms do: QuickBooks Online for the operating books, your billing or trust accounting system for the client ledgers, and secure file sharing for statements.
Every state sets its own client trust account rules. Most are modeled on ABA Model Rule 1.15, but record-keeping requirements and reconciliation schedules differ from state to state. We keep your records to your state’s rule, and your state bar remains the authority on what that rule requires. For Texas firms, our guide to Texas IOLTA account rules covers Rule 1.15 in detail.
Frequently asked questions
Can an outside bookkeeper keep the records for a Texas law firm’s IOLTA account?
Yes. A bookkeeper can record trust activity, maintain client ledgers and prepare monthly reconciliations, while the attorney keeps control of the account and responsibility under the rules. LUCI Financial Solutions does this work for law firms and flags issues for the attorney to decide.
How often should a law firm reconcile its trust account?
Monthly is the widely accepted best practice, and the State Bar of Texas trust account guide describes monthly reconciliation of the ledgers and bank statement as practical, wise and necessary. The Texas safekeeping rule itself does not set a reconciliation schedule. A three-way reconciliation each month catches errors while they are still easy to trace.
Do you work with solo attorneys in Dallas?
Yes. Solo and small firms are a good fit, especially once the attorney is spending evenings on bookkeeping or trust reconciliations. We work virtually with firms across Dallas–Fort Worth and nationwide.
Can you handle bookkeeping for an immigration law firm?
Yes. Immigration practices often combine flat fees earned in stages, advances for filing fees and many small client balances, so each matter needs its own ledger in trust. We keep those ledgers reconciled monthly alongside the operating books.
Do you keep law firm books in QuickBooks Online?
Yes. We keep the operating books in QuickBooks Online and reconcile the trust account against the client ledgers in your billing or trust accounting system. If your firm is still on QuickBooks Desktop, migration to QuickBooks Online is available as an add-on.
What does an IOLTA bookkeeper do for a law firm?
An IOLTA bookkeeper records trust deposits and disbursements to the right client ledger, reconciles the trust bank statement, the trust journal and the client ledgers each month, and flags problems such as a negative client balance or an unidentified deposit. The attorney keeps signing authority and responsibility for the account.
Do you provide bookkeeping services for law firms outside Texas?
Yes. LUCI Financial Solutions works virtually with law firms across the U.S. We keep the operating books in QuickBooks Online and reconcile trust records to your state’s trust account rule, while your state bar remains the authority on what that rule requires.
How much does law firm bookkeeping cost?
LUCI charges a fixed monthly fee based on transaction volume, the number of bank and trust accounts, payroll and your reporting needs. After a discovery call you receive a clear proposal, including a one-time onboarding fee. Engagements start with a 3-month commitment and then continue month to month.
Get your firm’s books and trust records in order
If you are not sure your trust account would reconcile to the client ledgers today, start with a conversation. Schedule a consultation, or take our free 7-question Financial Operations Assessment to see where your firm’s bookkeeping stands.
214-233-5454 · [email protected]