Stop! In the Name Of…Retainers? – Practicing Law Is Just Like Practicing Anything. Right?
Sure, you’re smarter than the average Jamie…and your logic is, well, flawless. But in many ways, the law is just like other professions. You advise clients. You prepare forms and other documentation. Your brain is your biggest tool—followed by that smart paralegal you hired, and (let’s not forget!) your legal software. You bill hourly, and collect a retainer against your billing.
Stop right there! The legal retainer is different from other professions. It’s simple. The state says that until you’ve earned the money, it doesn’t belong to you. To put it in legal terms, possession does not equate to ownership—at least not when it comes to retainers.
Therefore, unearned retainers—particularly ones that won’t get used quickly—go into trust accounts, not operating accounts. Breaking this is considered a serious ethics violation—and you don’t want to face the consequences.*
So How Do You Keep Track Of The Money?
Even if you have the greatest legal billing software in the world (and of course we think that’s Easy Time Bill): without a compatible trust component, you put yourself, your firm, and your career at tremendous—and unnecessary—risk.*
That’s why it’s not only helpful, it’s imperative for you to have escrow software or trust accounting software, too. It’s imperative for your law firm billing software to work hand in hand with that escrow (or trust accounting) software.
To be clear: attorney billing software without trust account software is like having a calculator that only adds, and doesn’t perform any other functions. To multiply or subtract, you have to use another calculator.
Trust accounting software without legal billing software is like having a factory that only makes the bottles. You have to go somewhere else for the caps—and they’re not designed to fit.
That would be ridiculous, right?
In comes Easy Soft. Our Easy Time Bill and Easy Trust products are designed to work hand in hand. When the two pieces work in tandem, the system tracks what you’ve taken against what you’ve earned. You no longer need to tell the difference between the two: your compatible law office software system does that for you.
Our next post will explain how it works.
*State ethics departments have a tendency to audit law firms at random.