Sometimes It Just Takes a Leap of Faith
For many attorneys who started their own practices, doing it all solo is a point of pride. It’s part of the entrepreneurial mindset that leads many of you to forge your own path in the first place, and it can be unsettling when you do finally make the decision to delegate.
You may have been keeping your books on your own, or have someone working at your firm who multi-tasks and does the bookkeeping in addition to their other duties. Depending on your firm’s growth trajectory, you’ll want to strike a balance between making sure you have enough staff to handle your day to day needs, and maintaining a salary budget that you’ll be comfortable with until your revenue increases. However, the time comes for many attorneys when it is more effective to hire a professional bookkeeper, so that you can free up your time to focus on what matters to you – running and growing your practice.
Choosing someone to oversee your firm’s finances is a big deal. You may be wondering whether you need to hire a bookkeeper at all, especially if you’re running a lean operation while you grow your client base. But it’s often a good choice to take a leap of faith in hiring a bookkeeper. Not everyone is a financial expert. Law degrees usually don’t come with accounting courses. Having someone on your team who is an expert, to take charge on the financial end and make sure you have the information you need to make decisions for your firm, can be a blessing.
A bookkeeper will not necessarily increase your efficiency, because as happens when you hire any professional, you’re exchanging money for time. However, a good bookkeeper will increase your effectiveness. They will take the time to get to know what makes your law firm unique. While law firms generally can benefit from bookkeeping that uses the accrual method of accounting in order to keep a running list of accounts receivable and payable, that’s the only blanket rule. Each firm has a different client profile and flow of financial transactions. You may take on a higher volume of clients whose needs are less time-intensive, or choose to focus on a small number of complex cases. A bookkeeper will provide monthly, quarterly, or annual reports showing the profits and losses of your firm, which will help you to make informed decisions about whether your current client focus is working and what you might change in future.
Hiring a bookkeeper requires your financials to be laid bare in front of a stranger. It can feel embarrassing if you didn’t make as much money as you expected to last year, you took too many write-offs, you didn’t follow up with clients to get bills paid on time, or your expenses were too high. But while it takes a leap of faith to give all of this information to your new bookkeeper, the results are often gratifying. By taking all the financial data and organizing it in a sensible way, the bookkeeper is actually helping you to figure out the solution to a lot of those issues. You’ll be able to calculate the correct amount of tax write-offs correctly, figure out where you need to cut costs, and stay organized with billing your clients.
At the end of the day, hiring a bookkeeper is a wise choice if it feels right for your law firm to have someone responsible for overseeing all of your financial transactions, tracking the money that comes in and the money that goes out. Having a bookkeeper affords you the ability to project future earnings and budget for different areas of work, without constantly having to run the numbers yourself. It may take a leap of faith, but the payoff is worth it.