What makes accounting for a New York law firm different?
The attorney trust account. New York lawyers hold client funds — retainers, settlement proceeds, escrow — in an IOLA account (New York’s version of IOLTA), and under Rule of Professional Conduct 1.15 those funds must be kept separate and inviolate, with complete records and prompt disbursement. The account is expected to be reconciled monthly using a three-way reconciliation. Mishandling client funds is one of the leading causes of attorney discipline in New York, which is why law-firm bookkeeping is built around the trust account first and everything else second.
What is three-way reconciliation and how often is it required?
Three-way reconciliation means three figures must all agree: the balance on your trust bank statement, the total of your firm’s internal trust ledger, and the sum of every individual client’s sub-ledger balance. If all three don’t match, something is wrong and needs to be found before the month closes. In New York it’s expected monthly as best practice, and a 2026 standard modeled on the ABA’s Model Rule 1.15 — adopted by New York among other states — tightened the reconciliation deadline to 30 days and made three-way reconciliation and seven-year electronic retention explicit requirements. We perform it monthly and document it for your review.
Can a bookkeeper legally handle my trust account?
The mechanical steps — recording transactions, preparing the three-way reconciliation, organizing records — can be delegated to a qualified bookkeeper or ProAdvisor. What cannot be delegated is responsibility: New York holds the attorney, not a software vendor or bookkeeper, accountable for trust-account compliance. So the right model is a QuickBooks ProAdvisor who does the reconciliation work accurately and hands it to you to review and approve. We do exactly that — the work and the documentation — while you retain the professional responsibility the rules require.
How do you keep retainers from becoming a commingling problem?
A retainer is the client’s money until you earn it, so it belongs in the IOLA trust account and moves to your operating account only as you bill against it. Commingling — mixing client and firm funds, or paying operating expenses out of trust — is one of the most frequently disciplined violations, even when accidental. We track earned versus unearned fees carefully, so retainers stay in trust until billed and transfers to operating are clean, documented, and tied to actual work performed.
How long do New York firms have to keep trust records?
New York requires attorney trust records to be kept for seven years — longer than the five years many states require. Records include bank statements, prenumbered canceled checks, duplicate deposit slips, client ledgers, and reconciliations. The 2026 standard also makes seven-year electronic retention explicit, so paper-only recordkeeping no longer suffices on its own. We keep your trust records complete, organized, and retained to that standard, so if the bar ever requests them they’re ready.
What happens if my trust account is overdrawn?
Most banks have automatic overdraft-notification agreements with the bar, so if your IOLA account goes negative — even for a single day due to a timing error — the bank notifies the disciplinary authority and you can expect an inquiry, with the presumption running against you until you show it was a clerical error. The way to avoid this is disciplined process: never disburse against uncollected funds, reconcile monthly, and keep client sub-ledgers current. That’s precisely the routine we maintain, which is what keeps timing errors from becoming a bar inquiry.
How much does law firm bookkeeping cost in New York?
Monthly bookkeeping for a New York law firm runs $400–$2,500+ per month, fixed-fee against a written scope. Pricing is set by matter volume, how active your trust account is, the number of attorneys, and whether you need practice-area profitability reporting — a solo practitioner with light trust activity is at the lower end; a multi-attorney firm with heavy trust volume higher. We quote a firm number after reviewing your books.
How do we get started?
Book a free discovery call. We review your QuickBooks file and trust setup remotely, look at how your IOLA reconciliation and client ledgers stand, determine whether you need a cleanup first or can go straight to monthly service, and send a written fixed-fee proposal within 3 business days. Your named QuickBooks ProAdvisor begins as soon as you approve.