LeanLaw is a software service for small law firms working in QuickBooks Online, looking to streamline their timekeeping and billing workflow.
There are many software programs that can be used for legal billing and accounting. Some are desktop based, and others cloud. Some are combined billing and accounting, some include practice management, some integrate with QuickBooks desktop and others with QuickBooks Online (QBO). If a firm has made a choice to use QBO, then you want to choose a product with a strong integration.
LeanLaw’s focus is billing and linking to QBO. Like any program, there are some limitations and it’s important to be aware of them when deciding if LeanLaw is the right fit. If you want to use QBO and the limitations don’t apply to your firm, then LeanLaw should be near the top of your consideration list.
LeanLaw offers two-way, real-time integration. It is unique in that it works with QBO invoicing, but LeanLaw modifies the QBO invoice layout to include important information. This means that you can use the QBO functionality and add-ons to track AR balances, email bills, create statements or work on collections. It also means that managers can see time, AR and trust balances in LeanLaw and only those who really need access to QBO can have permission. This improves security of QBO data.
LeanLaw offers clean screens that make it easy to navigate. When you get started you can choose to create a login and password or you can login with your google, Office 365, Microsoft Live or Intuit account. This makes it easier to get in and get going and one less password to remember. However, if the system you choose gets hacked, your LeanLaw access is also compromised so choose carefully. LeanLaw also offers a desktop time tracker as well as iOS and Android apps to make it easy to capture all your time.
Once signed up, you set up firm information and individual settings. As a user, you can choose your favorite starting tab. You also specify your standard rates as well as other rates you might want. The task list and expense list are customizable. Tasks are not required unless ebilling. LeanLaw offers fixed fee templates that can be recurring and include a specific number of hours. Hours that exceed the maximum, if specified, are billed hourly. This is a nice feature for managing repeat projects. You can also setup automatic client and matter ids including numerical, year + numerical and matter-only.
When additional users are created they can be designated as having access to setup features and they can be set to be automatically added to all new matters.
Connecting to QBO is quick and easy – click on Connect, enter your QBO login information and choose your company. The integration can be client level or matter level, and you can choose which customer/jobs to import from QBO. You choose a default QuickBooks service for fees. For expenses you can chose a service, or, if you don’t have one, choose a GL account and LeanLaw will create the service. Note that there is only one expense link, so if you need to separate out soft costs and hard costs, this may not work for you. Trust integration is optional, as is the use of the undeposited funds account. If your trust account and operating account are set up with names that LeanLaw can interpret it will fill the information in automatically, but you can overwrite it. The setup also allows for default invoice email cc and bcc. You can indicate if credit card or ACH payments will be accepted through your QBO merchant processing. This means you don’t have to switch between programs to get the clients properly setup for billing.
LeanLaw offers three choices for billing workflow:
– Direct – invoices go directly to QBO when created
– Draft Step – invoices created and reviewed and when approved sent to QBO
– Draft and Approve – invoices created and approved but stay in LeanLaw until specifically sent to QBO either individually or as a group
Draft Step is probably the best choice for most firms, but LeanLaw allows you to change your workflow.
LeanLaw allows for setup for Ledes billing. For firms that want to use QBO but need Ledes billing this has long been an issue and LeanLaw is a good answer. It offers five code sets – Standard, Litigation, Patent and Trademark, Bankruptcy and Expert. If you need other code sets, they say they can be added. Note that when you indicate a client/matter is setup for ebilling you specify if task, activity and/or expense codes are required, however you don’t get to specify which code set. When entering time and expense, codes are easy to choose as they can be searched for based on number or name.
One of the issues many QBO users have is making the invoices look the way they want. Issues like – when QBO pulls in time, the timekeeper doesn’t show unless you add it manually or the effort required to group and subtotal time and expenses – often lead to a search for other solutions. LeanLaw handles this and passes to QBO in a way that allows creation of an invoice that may better meet your needs.
Entering time and expense is easy, as is the billing process. You can choose a time period, users, responsible attorney, client or matter. By default, a list of all that is ready to bill will show up on the screen. You can see if the client is linked to QBO and you can make changes to the invoice format including – include user name, include matter name, combine billable and non-billable, combine time entries for same day and summarize by timekeeper. Note that if you choose summarize by timekeeper the invoice will be summarized by timekeeper and an excel attachment will contain the details.
LeanLaw allows for invoices to be created individually at either the matter or client level or in batch. Since QBO doesn’t offer batch billing or a draft option, this is a strong benefit of LeanLaw. Once in draft you can approve and submit to QuickBooks in batch, depending on your billing workflow. If you choose to bill a client with multiple matters at the client level, the invoice will show the fees and costs for each matter but the invoice will be attached to the client, not the matters. The total of fees and expenses by matter will be in a message on the invoice, not in the detail section. Since the invoices are being sent to QBO for emailing this is a good workaround for the limitations of QBO invoice subtotals.
Payments to trust are handled from the Billing screen. Deposits to client funds can be at the client level or matter level. You can’t specify different trust accounts for different clients. When money is deposited into the Trust account a sub-liability account is created for the matter. Personally, I prefer to use a single liability account and track based on name, (keeps the chart of accounts cleaner) but LeanLaw helps take some of the pain out of managing these sub-accounts.
When you run an invoice for a client with trust funds the trust activity will show in a box on the invoice. The balance remaining due will show in the box, but the invoice balance due will reflect the full amount This may cause confusion on how much they need to pay for some clients unless you process the payment from trust, as described below, before sending the invoice. The note is set by default but you can edit it for each individual entry. I would like the ability to customize the default trust message. (I have been told this is coming soon).
The LeanLaw Trust Account screen shows the balance in the trust account along with how much belongs to each client. It also shows the receivables and offers you the option to pay the invoice with the trust money. If you make the payment it will immediately be reflected as a payment on the invoice in QBO.
When you go into the make deposits window in QBO, if using undeposited funds, payments to trust show as journal entries and payments from trust to AR show as payment entries. Other than trust, payments of invoices are entered into QBO and then transferred automatically to LeanLaw, so that you can see balances in both programs.
Because the payment of the invoice is handled in QBO there is no ability to allocate partial payments to expenses before fees. For many small firms this doesn’t matter, but for those with lots of advanced costs that must be tracked on the balance sheet, this could have a significant impact on income taxes. If this might apply to you, and you get partial payments, you may want to discuss how this will impact your firm with your accountant to see if this will work for you or if there is a “work-around” you might be able to use.
LeanLaw offers some useful reports, all of which can be exported to excel. They do not duplicate reports, like AR Summary, that can easily be produced in QBO.
- Client and Matter Billables – shows hours billable and non-billable, value, fixed fees and expenses. This report can reflect billed, WIP or both and offers filters for user, responsible attorney, time period and client or matter level.
- Client and Matter Billed and Collected – shows billed, collected, trust balance and receivables balance and can show at the matter or client level. It can also reflect fixed fees.
- Timekeeper reports shows billable and non-billable hours with value and includes filters for time and billed or not billed
- Fixed Fee Profitability – for fixed fee matters shows the value or the time versus what was billed to measure client or matter profitability.
- Receivables Schedule – invoices with balances after a certain period. This is an invoice listing report. An A/R Aging Summary report is available from within QuickBooks.
- Ready to Bill – shows what is waiting to be billed and includes AR and trust balances as well as last payment date
- Originating attorney – shows the value of billable hours, billed and collected by originating attorney assigned to clients and matters.
I would like to see some additional reporting in the trust area. (I have been told these are coming soon). While the funds held in trust screen is nice, it would be useful to have this as a report that could be printed and/or exported. I would also like a trust activity by client report. Although this can be created in QBO, it is not a standard report and it would be helpful to be able to create the detail in both programs for comparison.
As you evaluate LeanLaw, or any other program, a list of benefits and limitations is often useful. A summary is provided below to help in your assessment.
When law firms ask me about using QBO, I usually go through a summary of the limitations. With LeanLaw in the picture, my list of limitations shrinks considerably and I am happier to suggest QBO. Like most things, there are trade-offs, but overall, for firms that want to use QBO, but need some additional capabilities in bill layout, trust accounting or Ledes billing, LeanLaw is worth strong consideration.
SUMMARY:
Benefits
- Two-way real-time link to QBO
- Support for electronic billing
- Fixed fees
- Manage repeating projects
- Client Matter ID numbering
- Keep users out of QBO
- Draft invoices
- Show timekeeper automatically on invoice
- Show trust balance on invoice
- Group time and expenses automatically
- Multiple matters on single invoice
- Reporting
Limitations
- Single expense account link – can’t separate fees and costs
- Single Fee Income account allocation
- No ability to allocate partial payment to expenses before fees
- Timekeeper summary creates summarized invoice with attachment
- If using multiple matters on single invoice can’t designate matter paid
- Use of sub-liability accounts for trust (personal preferences, some would not consider this a limitation)