In the legal profession, properly managing trust funds is not just a matter of financial management; it’s a matter of compliance and ethical responsibility. Yet many lawyers and firms still use outdated or inefficient accounting systems to manage trust accounts. If your firm falls into this category, we’re here to help. Modern trust accounting software for lawyers is designed to address the unique challenges and legal obligations associated with trust fund management, ensuring fewer billing errors and less time spent on accounting tasks.

Transitioning to a trust accounting software designed for lawyers is vital for efficient legal accounting. Traditional methods or general accounting software may not meet the specific needs of legal trust accounting, leading to potential compliance issues and inefficiencies. Legal trust accounting software enables lawyers to handle complex transactions with accuracy and speed, often eliminating the need for additional bookkeeping resources.

If you’re considering making the switch or are new to trust accounting software, this guide offers in-depth insights and valuable information to help you make an informed decision.

What Is Trust Accounting?

At its most basic, trust accounting is the bookkeeping of trust fund accounts. To protect legal clients’ best interests, the American Bar Association (ABA) and state bar associations maintain detailed guidelines and regulations about trust accounting. In addition, attorneys must follow state-mandated tax rules for managing trust accounts.

Among these rules is the ABA’s expectation that client funds and law firm operating funds should always be kept separate. It’s also important to remember that law firm earnings and trust accounts are subject to different tax rules.

This is one reason why it’s so vital to monitor the fiscal movements of a trust account closely and track transactions across various categories. Proactive organization also helps attorneys apply the proper tax application to every expense and receipt.

To provide accurate reports about the status of trust accounts to clients and the ABA, attorneys should also keep detailed records and notes about all transactions.

Read more: 6 Ways to Improve Your Firm’s Trust Accounting

The Basics: Trust Accounting Best Practices

Even with the best trust accounting software on our side, attorneys should remain in the habit of regularly reviewing their state’s trust accounting regulations to stay in compliance.

Maintain Accurate Records

When it comes to trust fund management, complete records and a reliable accounting process are crucial. The right trust accounting software will include built-in safeguards that prevent situations where necessary data isn’t readily accessible.

Keep trust accounting records separate from personal and business records, especially when you’re managing multiple trust funds at once. Listing trust funds on your law firm’s balance sheets is both confusing and unethical.

Enact Strong Security Measures

Trusts are often the target of fraud and other forms of theft because they usually hold large sums of money. It is your law firm’s responsibility to protect clients’ funds from hackers and identity thieves.

Adherence to Purpose

Every trust fund has a specific use in its rules. Trustees cannot withdraw money from it to cover other things. Typically, the purpose of legal clients’ trust funds is to cover the cost of legal services. Until those services are provided and the money is transferred to the law firm’s operating account, attorneys shouldn’t spend the money for any purpose.

Prioritize Transparency and Accessibility

Transparency is vital to successful trust accounting. Rigorous record keeping doesn’t mean that information should be buried away, hidden from view. Your trust accounting software should keep data readily accessible. Your firm should always be ready to provide each client access to their trust information.

Transactions

Trust accounting can be an area of potential malpractice issues if you aren’t careful with your process. Many attorneys choose to structure payment plans to make as few transactions as possible to minimize the risk of mistakes and getting into hot water with the bar.

Finding time to meticulously track trust accounts can be a challenge for busy attorneys. Fortunately, trust accounting software designed specifically for law firms offers a powerful solution. As part of our comprehensive range of legal software solutions, Tabs3 provides trust accounting software to help with the management and maintenance of client funds.

Read more: Six Trust Accounting Best Practices for Lawyers

Tabs3: Your Versatile Trust Accounting Software Solution

Tabs3 Trust Accounting software helps you organize and streamline your work, increasing productivity, billable hours, and profits.

With accounting and management features consolidated on one screen, you won’t have to worry about juggling multiple software at once. Instead, your team will enjoy a versatile platform that streamlines processes throughout your whole firm.

With legal software products designed for the way you work, Tabs3 Trust Accounting will be one less distraction from doing what you do best: serving your clients! Tabs3 Software supports thousands of legal professionals in their efforts to improve their trust accounting process and shield their work against common compliance pitfalls.

Tabs3 Software Integration

Our trust accounting software works seamlessly with other Tabs3 applications to reduce the time attorneys spend on administrative tasks. When used alongside our billing, accounts payable, and general ledger software for maximum benefit, Tabs3 offers you the most informative overview possible of your law firm’s financials.

Tabs3 Trust Accounting is simple to use because it features an easy-to-navigate user interface. Integrated with Tabs3 Billing, you can view trust balances at a glance from various reports and the Matter Manager. For example, your trust balances can be included in the work-in-process reporting and on statements. You can review trust balances and transactions as needed from either application. With Tabs3Pay, you can also process client deposits via credit card.

Automation makes Tabs3 Software even more useful for trust accounting. Any payments made to or from a client trust account will automatically be recorded, improving the accuracy of your firm’s trust accounting records with minimal effort required.

Why Software Is Important for Trust Management

With the complex tax factors and transactions that happen within a trust, keeping track of everything can get complicated. Even an experienced attorney can easily feel overwhelmed by the sheer amount of work involved.

While a legal professional may have the training and knowledge for the job, mistakes can happen easily when managing trust accounts for multiple clients. Even minor mistakes can have major ramifications when tax laws and industry regulations are violated, even unintentionally.

Dedicated software designed to assist with all trust-related tasks can increase your firm’s accuracy. Tabs3 Software can help you avoid inconsistencies that may impact your trust accounting. Compared to manually managing the trust accounting process, Tabs3 Trust Accounting software streamlines workflows and minimizes errors, saving your firm time and money.

Your firm can become fully liable for any issues with trust accounting, and accounting software reduces errors and protects you in the event that there’s a problem. Tabs3 records all transactions and keeps them organized, so you’ll always have easy access to them and ensure that nothing falls through the cracks. The software warns you when an account goes below a minimum balance, and helps you easily reconcile your bank statements. In some states, multiple forms of proof that trust bank accounts are in balance may be required. Tabs3 Trust Accounting software provides this proof via the Three-Way Reconciliation Report.

Easily Manage Multiple Client Trust Accounts

With Tabs3 Trust Accounting, you’ll be able to process and track every transaction across multiple trusts with ease. With seamless integration between all Tabs3 Software applications, you can check ledgers while managing trust without the need to switch tabs. In addition, Tabs3 Trust Accounting complies with all major trust accounting regulations. Because our trust accounting is built specifically for law firms, you’ll have no trouble keeping complete and accessible records with Tabs3.

You can also customize your software to adhere to additional in-house security protocols. Tabs3 offers an extra layer of security, which protects funds from anyone intent on stealing from your clients. The software tracks all transactions within the trusts connected to it to keep you informed.

Additional features

Customizable Dashboard

Being able to find your way around your trust accounting software is critical. With Tabs3 Trust Accounting, you can access a comprehensive overview of your firm’s trust accounts and their standing at a glance. Navigating the home page to complete a transaction or start a reconciliation is intuitive and fast. With just a few clicks, review additional account summaries and other detailed transaction information.

You’ll also be able to view recent transactions within any individual client trust, as well as a combined list of transaction information. Pin your most used actions in the dashboard to customize your process, so you can print, check, and record data all in one place.

Positive Pay

Tabs3 Trust Accounting includes a Positive Pay Export program, which offers greater security in a more streamlined workflow. Directly export approved checks and upload them to your financial institution to support the Positive Pay fraud prevention program.

Streamline Your Trust Accounting with Tabs3

Experience the difference that Tabs3 Trust Accounting software can make for your firm! All Tabs3 Financials software, including Trust Accounting, General Ledger, and Accounts Payable, are available to access with Tabs3 Cloud and on-premises subscription plans. View our pricing plans for more information and find the solution that best fits your needs.

Schedule your free demo today.

Whether your goal is to run an entirely remote law firm or you simply want to see more efficiency around the office, secure file-sharing can help your legal practice run better.

But let’s start with the basics: what is secure file-sharing? Secure file-sharing is an ethical method of sending sensitive documents digitally, using encryption and other technology to protect them from unauthorized viewers. To prevent hackers or identity thieves from accessing client data, the documents may be encrypted at rest, in transit, or both. Password protection and other measures add additional layers of privacy, as well.

This expedient, secure way to share legal files creates numerous opportunities for tech-savvy law firms to benefit from enhanced client relations and fewer operational silos. Below, we outline eight benefits of secure file sharing for a more profitable firm and more effective practice management.

1. Integration of eSignatures for Efficient Document Handlings

An eSignature is a digital signature that is typed or “written” on a touch screen using a finger, stylus, or mouse. eSignatures are legally binding, secure, and speedy. They’re also considerably more cost-efficient than printing paper documents to collect wet-ink signatures.

Using secure file-sharing and eSignatures in tandem simply makes sense, especially for lawyers. The duo eliminates the frustrating bottlenecks and data-entry errors that plague the legal process when paper documents must be mailed, scanned, and stored.

2. Enhancing Client Experience through Digital Accessibility

Using technology to offer more client-centered service demonstrates that your firm values clients’ time and energy. Ultimately, this makes them more likely to work with your firm again in the future.

Sharing legal files securely and digitally creates significant advantages for your clients. It’s also an increasingly standard expectation for doing business in the on-demand world we live in. Instead of waiting for the mail or driving to your office in person, file-sharing enables clients to review and sign important documents whenever and wherever it’s best for them.

In total, secure file-sharing and eSignatures cut the amount of time clients spend reviewing and signing documents by 80%.

3. The Potential of a Paperless Law Firm

Evolving to become a paperless law firm creates boundless opportunities to improve your law firm’s business practices. Cutting paper doesn’t cut cash, though, at least not metaphorically. Switching to paperless systems saves most companies money. Plus, paperless firms may be able to reap state and federal tax benefits.

Environment-conscious clients and employees will also appreciate the impact made by firms that share files online: lower water usage, decreased CO2 emissions, less waste sent to landfills, and fewer fossil fuels burned by driving to review and sign documents are all added benefits of secure file sharing.

4. More Opportunities to Work Remotely

Many lawyers, from junior associates to managing partners, appreciate the flexibility that remote work allows, whether due to an unexpected illness, family needs, or travel. While many law firms operate solely in-office, others have permanently adopted hybrid and remote work models. No matter which camp your firm falls in, it’s crucial to stay agile.

As an added bonus, remote work technologies, such as secure file-sharing, make it possible to accept clients from a wider geographical area. Your firm’s horizons are expanded when time and distance are no longer barriers to sharing documents or collecting signatures.

5. Streamlining Client Intake and Onboarding

The benefits of secure file-sharing extend far beyond completing legal work on client matters.

Secure file-sharing transforms the client intake process. When clients fill out paper-and-ink forms about their legal matters, legal staff must manually enter that information into your practice management software, often more than once. The repetition creates a large margin for data entry errors and pulls legal staff’s focus away from billable tasks.

By contrast, secure file-sharing empowers clients to complete the intake process faster. The need to complete onboarding paperwork in person is eliminated, and updating new clients’ personal information is instantaneous; no digging through file folders required. This reduces manual data entry errors dramatically.

6. Optimizing Time Management and Workflows

Your firm’s most important, and limited, resource is time. Secure file-sharing streamlines workflows and preserves limited resources by eliminating the need to compare calendars. What could your team achieve without wasting time waiting for schedules to align or hounding clients to return yet another email and schedule an appointment?

Getting documents in front of the right eyes is as simple as sending an email. However, email places a size limit on the files you can attach, while secure file-sharing makes it easy to send files that are particularly large (as files tend to be in legal work). To make things even more expedient, many file-sharing platforms have built-in, customizable templates and document management software too.

These features keep everything searchable and easily accessible for efficient workflows.

7. Improved Data Security

When it comes to legal work, compliance is key.

Few professionals handle such a large volume of sensitive data as attorneys. Depending on your practice area, clients entrust your firm with intellectual property, protected health information, potentially incriminating evidence, personal identifiable information, tax records, and more. Not only does the American Bar Association heavily regulate the way this information should be managed, but state and federal governments do so as well.

Secure file-sharing software makes following the industry’s strict ethics and client confidentiality requirements a breeze. Robust data encryption and password-protected links offer a higher level of security than sharing files via email or the postal service and lessen the likelihood of a breach of confidentiality.

8. Faster, More Fruitful Collaboration

When your clients and colleagues can access important files at any time, from anywhere, there’s no need to meet in an office. Work is completed faster. Instead of stretching the feedback process out for days (or even weeks), attorneys can edit legal documents in real time rather than sending them back and forth and waiting on them to be reviewed several times.

Legal Software Solutions that Work as Hard as You Do

Tabs3 Software now integrates with LexShare. LexShare offers maximum confidentiality in an intuitive interface, so sending and receiving files internally and externally is simple for every user, client, and colleague.

However, secure file-sharing for lawyers is just one of the many user-friendly, flexible features that Tabs3’s industry-leading legal software solutions have to offer your firm. Our software works reliably and effortlessly, so attorneys can spend more time focusing on securing and serving clients and less time troubleshooting or training on new software.

A more organized, profitable legal practice awaits, and it’s easy to get started. Schedule a demo or sign up for a free trial of Tabs3 now.

When it comes to managing a law firm, there’s a lot to account for, including filing and sharing documents, trust accounting and bookkeeping, billing and payments, marketing…the list goes on.

In the digital era, law firms are continually adapting to technological advancements. Selecting the right legal software is critical, and the debate often centers around on-premises vs. cloud vs. hosted solutions.

There are valid reasons for choosing any of these solutions, and the benefits of each depend on your law firm’s needs, goals, and how you deploy the software. Let’s break down the pros and cons of each type of hosting solution and explore how to choose the best legal software solution for you.

Understanding law firm software solutions

Law firm software encompasses a diverse range of tools tailored to enhance different facets of a law firm’s functions. This includes areas like case management, document handling, billing procedures, accounting, and even time tracking.

Depending on your firm’s preference, these software solutions can reside on-site, be hosted externally, or operate via the cloud. Each option presents its own set of advantages and factors to consider.

On-premises law firm software

On-premises legal software is installed and run on computers and servers within the physical space of the law firm. This traditional approach to software deployment offers several advantages, mainly revolving around control and security. However, it also presents some challenges.

Benefits of on-premises law firm software:

• Total control over data: With on-premises software, law firms wield full authority over their data, dictating its storage location and access methods. Keeping this information on-site might be a more secure choice for firms dealing with extremely sensitive client details or high-profile client matters.
• High-level security: On-premises solutions potentially offer higher data security, as data is stored on local servers, reducing the risk of data breaches associated with cloud storage.
• Customization options: Since the software is housed on the firm’s servers, there’s often more room for customization to suit the firm’s specific needs.

Things to consider with on-premises law firm software:

• IT resources: On-premises software requires more IT resources for installation, maintenance, security, and troubleshooting. This can be a challenge for smaller firms that lack a dedicated IT team.
• Greater upfront costs: The initial costs of on-premises software can be high, including the purchase of servers, software licenses, and installation.
• Limited mobility: On-premises solutions can sometimes limit the ability of attorneys to work remotely, as access to the system may be restricted to the office computers. VPN access may be used to mitigate this potential issue.

Hosted law firm software

Hosted legal software is a middle ground between on-premises and cloud-based solutions. In this scenario, a third-party provider houses your law firm’s software on their servers, allowing for remote access.

Benefits of hosted law firm software:

• Lower IT needs: With hosted software, a third-party hosting provider handles the IT aspect of the solution, including setup, updates, and virus protection. This takes the IT burden off the law firm, making it an ideal option for multi-office firms or those with attorneys frequently working offsite.
• Cost-effectiveness: Hosted software usually involves a subscription model, which can be more cost-effective than the high upfront costs associated with on-premises solutions.
• Greater accessibility: Since the software is hosted on the provider’s servers, it can be securely accessed from anywhere, offering greater flexibility for remote work.

Things to consider with hosted law firm software:

• Dependence on a third-party provider: With hosted software, law firms are dependent on the provider for software maintenance and data security. This could potentially be a disadvantage if the provider’s services are difficult to access. Care should be taken to properly vet your hosting provider.
• Potential for higher long-term costs: While hosted solutions might have lower upfront costs, the ongoing hosting fees could add up over time, leading to higher long-term costs.

Cloud-based law firm software

Cloud-based legal software solutions allow for easy access from any location with an internet connection. This modern approach not only enhances accessibility but also offers notable cost-saving benefits.

 Benefits of cloud-based law firm software:

• Remote accessibility: Cloud-based software can be accessed from anywhere with an internet connection, offering flexibility and convenience for remote work.
• Scalability: Cloud-based solutions are often easily scalable, allowing law firms to adjust their usage based on their needs. As the firm grows, it can simply purchase additional user subscriptions.
• Cost-effectiveness: Cloud-based software typically involves a subscription model, which eliminates the need for hefty upfront investments in servers and IT infrastructure.
• Automatic updates: Updates and improvements are rolled out automatically in cloud-based software, ensuring that law firms always have access to the latest features and security measures.

Things to consider with cloud-based law firm software:

• Internet dependence: A reliable internet connection is essential since cloud-based software is accessed via the internet. If the internet goes down, it can impact access to the software.
• Data security: While cloud providers invest heavily in security, some law firms may still have concerns about client data in the cloud.

How to make the right choice: key questions to ask

When choosing between on-premises, hosted, and cloud-based software for your law firm, you have a number of essential criteria to evaluate.

Here’s a convenient checklist of questions to ask before making a decision:

• Security and compliance: Does the software offer robust security and data privacy compliance measures?
• Scalability: Will you be able to scale your software solution to align with growth and change at your law firm?
• Cost: What are the upfront and ongoing costs of the solution? While on-premises software may have high upfront costs, hosted and cloud-based solutions might involve ongoing subscription fees.
• Mobility: Where do your attorneys and legal staff work? Is remote work a necessary consideration? If your firm values the flexibility to work from anywhere, a hosted or cloud-based solution may be a better fit than an on-premises one.
• Support: How much IT support do you have or need to deploy for an on-premises solution? Factor in your needs for technical support to resolve issues and training support to help your team use the software effectively.

Choose your own software platform with Tabs3

Navigating the world of legal software can be complex, but making the right choice can significantly enhance your firm’s efficiency and success. Whether you choose an on-premises, hosted, or cloud-based solution, finding a platform that meets your firm’s unique needs and aligns with your strategic goals is key.

Tabs3 offers versatile solutions that cater to all these needs, providing powerful tools that can be deployed in the way that best suits your firm. With Tabs3, you can leverage advanced technology to streamline your operations, improve client service, and drive your firm toward a successful future.

The comprehensive suite of services offered by Tabs3 includes:

• Tabs3 Billing
• Tabs3Pay
• Tabs3 Financials
• Tabs3 Cloud
• PracticeMaster
• Tabs3 CRM
• Tabs3 Connect

Embrace the future of legal practice management. Choose a software solution that empowers your firm to deliver exceptional services no matter where you are. To find out how Tabs3 stacks up, schedule a demo or sign up for a free trial today.

As a lawyer, you know that you have a duty to “zealously protect and pursue a client’s legitimate interests.” But what happens when those interests collide with another client’s, or even your own?

Understanding and managing conflicts of interest is essential for managing an ethical legal practice and maintaining client trust.

Let’s explore what constitutes a conflict of interest, why it’s a pivotal issue, and how you can effectively navigate conflict checks at intake by using the latest technological tools.

Understanding the concept of conflict of interest

Conflicts of interest in the legal field are an issue that can have real-world repercussions for both lawyers and their clients. That’s why attorneys usually begin an initial consultation with a conflict of interest check to see if a prospective client’s matters are at odds with those of an existing client.

The American Bar Association’s (ABA) Model Rules of Professional Conduct contain extensive rules on conflicts of interest, both for current and prospective clients.

According to Rule 1.7, a conflict of interest exists when there is a significant risk that a lawyer’s ability to represent a client will be materially limited by the lawyer’s responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer.

In simpler terms, a conflict arises when:

• your duty to one client could adversely affect another, OR
• your personal interests are at odds with your professional responsibilities

It’s a situation that demands immediate attention and resolution because failing to address it can lead to ethical violations and penalties.

The importance of loyalty and independent judgment

At the core of the attorney-client relationship is the principle of loyalty and independent judgment.

Clients entrust lawyers with all manner of highly sensitive data, including financial and personal information, and rely on them for legal advice and representation. Any form of conflict can erode this trust and compromise the quality of legal services provided.

For instance, if you’re representing two clients in a business transaction, can you truly advocate for both parties equally? The answer is often no, and this is where conflict of interest checks come into play.

Conflict of interest checks are not just a formality. They’re a crucial step in maintaining the integrity of the legal profession.

Common types of conflicts in legal practice

There are always nuances to legal practice, and conflicts of interest are no different. Understanding these types of conflicts is about adhering to legal guidelines and maintaining the trust and integrity that are the bedrock of the legal profession.

Opposing client interests

This type of conflict arises when you represent clients whose interests could potentially clash in the future, even if they aren’t directly opposed at the moment.

For example, you might represent two different clients in separate but similar business negotiations. If one client’s successful deal could negatively impact the market conditions for the other client, you are in a situation of opposing client interests.

Limited abilities due to other responsibilities

Sometimes, your ability to fully represent a client is hindered by obligations to another party. This could be another client, a former client, or even a personal matter. When this situation arises, it becomes difficult to give both parties your best effort.

Exposure to the opposing party’s information

If you’ve had access to sensitive information from an opposing party in a previous case, taking on a new case against that party is fraught with ethical pitfalls.

Business transactions with clients

It’s widely known that, as the ABA’s ethical guidance states, a “lawyer’s own interests should not be permitted to have an adverse effect on representation of a client.”

Entering into business deals with a client can muddy the professional relationship. Your interests could easily become misaligned, leading to a conflict that is hard to resolve.

The traditional way of conducting conflict checks

Before the advent of specialized legal software, conflict checks were often a manual, time-consuming process. Lawyers would rely on:

• Centralized databases: Manually searching through databases for names and entities related to potential new clients.
• Team consultations: Discussing potential conflicts with other lawyers and paralegals in the firm.
• Manual legal obligation review: Examining legal documents like confidentiality agreements or noncompete clauses that could cause conflicts.

These methods are prone to human error and can be incredibly time-consuming. These days, there are much more efficient ways to keep yourself in the clear.

The role of informed consent

Keep in mind that in some scenarios, conflicts can be managed through informed consent. This means all affected parties agree to proceed after full disclosure of the potential conflict. However, not all conflicts can be resolved this way, and in some cases, you may need to decline representation altogether.

The modern solution: Specialized legal software

In contrast with manual conflict checks, which are cumbersome and error-prone, specialized legal software has features designed to automate and streamline the conflict identification process, boosting speed and accuracy.

A software solution helps you conduct more accurate and efficient checks by allowing you to:

• Search through a comprehensive database of clients, matters, and related parties.
• Generate detailed conflict reports for review.
• Maintain a record of all conflict checks for compliance and auditing purposes.

By integrating advanced software solutions into your conflict check procedures, you save time and enhance the reliability and integrity of the process.

Simplify conflict checks with Tabs3’s specialized tools

As an attorney, your reputation is one of your most valuable assets. Upholding ethical standards is a cornerstone of a successful practice. By staying informed about the nuances of what constitutes a conflict of interest and employing effective management strategies, you can safeguard your reputation and build stronger, more trusting relationships with your clients.

Tabs3 offers a range of features that make conflict checks more reliable and efficient:

• Comprehensive database searches. Quickly search through a centralized database that includes current clients, past clients, and opposing parties, as well as any associated information for these clients.
• Team collaboration features. Easily consult with team members within the platform, ensuring everyone is on the same page.
• Search inside and outside of the database. PracticeMaster enable you to search outside documents and emails to ensure as comprehensive a search as possible.

By adopting PracticeMaster, you can significantly reduce the time and effort required for conflict checks, allowing you to focus more on your clients and less on administrative tasks.

Tabs3 is a comprehensive software solution designed to streamline your legal practice and enhance compliance. From legal billing to a financial suite, Tabs3 provides the tools you need to maintain airtight ethical integrity.

Don’t leave your reputation to chance. Invest in a solution that supports your commitment to ethical practice. Schedule a demo or begin your free trial today.

Trust accounting is a cornerstone for any legal practice, and it must be handled with great care to maintain compliance with legal and ethical standards as well as to ensure transparency with your clients.

The complex nature of trust accounts and the unique rules set by state bar associations make trust accounting a challenging part of practicing law.

Here are six trust accounting best practices that aim to shed light on how law firms can streamline their accounting process.

Understanding trust accounting

Law firms must keep client funds given in trust separate from law firm operating funds. These funds can include:

• Retainers
• Advances for costs, such as court fees, used to manage the case
• Settlement funds obtained through personal injury cases or real estate transactions
• Judgment funds awarded by the court
• Third-party funds to pay for property sold or services rendered

The primary purpose of trust accounting processes is to safeguard client funds, maintain transparency, and adhere to legal and ethical obligations.

The complexity of trust accounting lies in its stringent rules and regulations. Law firms must:

• Maintain an individual ledger for each client
• Perform regular three-way reconciliations
• Ensure a clear separation of trust accounts and operating accounts

Non-compliance can lead to severe consequences, including disciplinary actions and legal liability. Therefore, understanding and implementing trust accounting best practices is crucial for every law firm.

Best practices for law firm trust accounting

Trust accounting is nuanced, but there are steps attorneys can take to simplify how they manage it and decrease the risk of missteps. Let’s take a look at the top six trust accounting best practices.

1.   Adhere to bar association rules

The first step to achieving compliance in trust accounting is understanding the laws and regulations set forth by your state bar association.

Every state has unique rules for trust accounting that law firms must follow, but they all have these two basic points in common: keep accurate and detailed records, and avoid commingling funds.

Some states require monthly or quarterly three-way reconciliation for trust accounts. This process involves comparing your client ledgers, trust ledgers, and trust bank statements, ensuring that all records match. Regular adherence to this practice can help law firms stay compliant and manage their trust accounts efficiently.

2.   Maintain separate accounts for trust funds and operating funds

One of the fundamental trust accounting best practices is the clear segregation of client funds from the law firm’s funds. This rule, set by the American Bar Association, ensures client funds are not commingled with the firm’s assets.

The money in a trust account usually consists of prepayment for services yet to be rendered, and it legally belongs to your client until the payment terms are fulfilled. Therefore, these funds should not be reported as income. Once a law firm has completed the service agreement, any remaining funds in the trust account must be returned to the client.

3.   Communicate billing practices clearly to clients

Law firms cannot simply draw from trust funds as they see fit without an agreement on when and how much they will deduct to cover costs and services rendered. That’s why clear communication of billing practices is another crucial aspect of trust accounting best practices.

Law firms should provide clients with a detailed understanding of their billing practices, fees, and timeline. They can do this with a written agreement that specifies how funds will be distributed and how any retainer fees will be used.

Moreover, law firms should educate clients about the workings of trust accounts and the measures they take to secure them. This transparency can foster trust between law firms and their clients and preempt any misconceptions or confusion regarding trust accounting practices.

4.   Establish clear procedures for handling trust accounts

Trust accounting requires precise procedures for handling client money held in trust, including everything from when to withdraw funds to replenishing retainers.

Having explicit agreements for the disbursement of trust funds is critical to avoid inadvertently violating state bar regulations. Your team and your clients need to know the procedures.

Additionally, law firms should allow adequate time for deposits to clear in the account before disbursing funds. Regular implementation of these procedures can help law firms manage their trust accounts efficiently and remain compliant.

5.   Perform regular three-way reconciliations

Regular three-way reconciliations are a key component of trust accounting best practices. This process ensures that the IOLTA bank balance matches the checkbook trust balance and that both match the sum of all individual client ledger balances.

Performing three-way reconciliations regularly, preferably within the first 10 days following month-end, helps identify discrepancies, errors, or potentially fraudulent activities. It also ensures the accuracy of trust accounting records and provides law firms with a complete and precise overview of the funds they are holding in trust for clients.

6.   Implement legal-specific tools for trust accounting

Trust accounting is challenging and involves many rules for which there are stiff penalties, so leveraging legal-specific tools can significantly streamline the process and help avoid risk.

Tools like Tabs3 Financials offer a comprehensive suite of features designed to simplify trust accounting and ensure compliance.

Tabs3 Financials allow law firms to track an unlimited number of trust accounts, execute three-way reconciliations, manage trust accounts from one system, and view dashboard summaries of account activity. It also supports the Positive Pay program, a fraud prevention measure used by banks.

With the latest legal-specific software, firms can automate their trust accounting practices, reduce the risk of human error, and maintain a transparent and efficient system for managing their clients’ trust accounts.

An easier way to ensure compliant trust accounting

Law firms used to maintain client ledgers by hand or on stand-alone spreadsheets. But not anymore. Legal-specific software can simplify trust accounting for law firms. It should integrate seamlessly with a law firm’s general accounting system and offer robust trust accounting, general ledger, and accounts payable features.

Tabs3 is an industry-leading software solution with features that make it an ideal choice for managing trust accounts:

• Trust accounting: Tabs3 Financials allows you to track unlimited trust accounts, ensuring precise and efficient management of all client funds.
• Three-way reconciliation: The software enables regular three-way reconciliations for trust accounts, ensuring compliance with state bar association rules and providing an accurate overview of your trust accounts.
• Dashboard summaries: Tabs3 offers dashboard summaries of account activity, providing a quick glance at your firm’s trust accounts and bank balances.
• Positive Pay: Tabs3 supports the Positive Pay program, helping law firms prevent fraud and safeguard their clients’ trust funds.

Law firms can implement trust accounting best practices efficiently, maintaining compliance with state bar regulations and enhancing client trust using Tabs3.

See what Tabs3 Software can do for you

To explore how Tabs3 can help your law firm manage trust accounts accurately and efficiently, schedule a walkthrough demo or sign up for a free trial today.

In the dynamic and competitive landscape of the legal industry, law firms need to develop strong relationships with their clients from day one.

To do this, firms of all sizes must prioritize client engagement. Client engagement goes beyond simply ensuring client satisfaction and securing repeat business; it’s about fostering a sense of loyalty and trust that can lead to referrals and a strong reputation in the market.

There are many ways to keep your clients engaged throughout the lifecycle of their legal matters, including:

• Providing helpful information through blogs, videos, and podcasts
• Implementing drip email campaigns
• Using client collaboration tools
• Improving the payment experience

Legal technology tools can also help with all of these activities. Let’s look at some practical insights into keeping your current clients engaged and loyal to your practice.

Building client engagement: from trust to referrals

In any industry, client loyalty is more than just nice to have; it’s a crucial element to ensure success for your business.

But why is client loyalty so crucial for law firms, and how does it tie into client engagement?

Loyal clients are more likely to return for additional services. In a field as complex as law, where matters can span months or even years, having clients who trust your expertise and choose to stick with your firm is a significant advantage. They represent more than just the immediate business they bring but also the potential for future stability.

Loyal clients are also more likely to sing your praises. In many cases, they act like ambassadors for your firm by referring you to their friends, family, and professional networks, effectively becoming a free marketing channel. In an industry where word-of-mouth recommendations are invaluable, this can be a powerful tool for growth.

Of course, client loyalty takes time to develop. It’s the result of consistent, meaningful interactions that make clients feel valued and understood. It’s about showing clients that you’re not just there for them in the courtroom or during negotiations but also in the quieter moments when they seek advice or reassurance.

This is where client engagement comes into play. By providing your clients with valuable information, maintaining regular contact, and making their communication with your firm as seamless as possible, you can foster a sense of loyalty that goes beyond a single case or transaction.

Legal-specific software solutions can support these efforts, making it far easier to manage client relationships and keep communication personalized without requiring a huge mental load for attorneys and law office staff.

Providing value beyond the case: four strategies to foster client engagement and loyalty

Maintaining a strong connection with your current clients is crucial in the legal industry. Here are some effective strategies that can help you keep your clients engaged and foster a sense of loyalty: 

1.    Deliver information that matters

One of the most effective ways to keep your clients engaged is by continuously serving as a source of valuable information. Your firm can achieve active client engagement by:

• Crafting relevant articles that are easy to read and share
• Creating engaging videos
• Hosting (or being a guest speaker on) informative podcasts

By sharing insights and knowledge about the legal issues that matter to them, you keep them informed and position your firm as a trusted resource. 

2.    Implement drip email campaigns

Regular and personalized communication is vital to keeping clients engaged. Implementing drip email campaigns, where a series of emails are sent over time, can help maintain a consistent line of communication. These emails can include updates about their case, legal tips, or even general law firm newsletters.

Use marketing automation tools within a legal-specific CRM to streamline this process, ensuring consistent communication without adding to your workload. 

3.    Keep matters organized

Efficient and organized matter management is crucial for achieving client satisfaction and engagement at your law firm. Clients have greater confidence in your firm when they see their cases handled systematically and professionally. This includes everything from responding to client queries promptly, informing them about their case progress, and ensuring all their documents are organized and easily accessible.

Tabs3 Software solutions allow you to streamline matter management by organizing client information, automating routine tasks, and making all client documents easily accessible. 

4.    Offer easy payment options

In business, convenience is vital. Easy payment options like online payments or credit card processing can enhance the client experience. Tabs3Pay gives clients convenient payment options such as payments through a private portal, making it easier to settle their bills and demonstrating your firm’s commitment to modern, client-centric practices.

By integrating these strategies, you can keep your current clients engaged, fostering a sense of loyalty that can benefit your firm in the long run.

Keep your clients engaged and turn them into loyal ambassadors with Tabs3 CRM

At a time when consumers have an abundance of options at their fingertips, law firms are increasingly seeking to go above and beyond to deliver client engagement experiences that truly set them apart from the crowd.

By leveraging the capabilities of Tabs3 CRM, you can automate and simplify your client management procedures, enabling you to concentrate on the most crucial aspect of your work: delivering outstanding legal services, maximizing your billable hours, and keeping clients engaged throughout the matter lifecycle.

Tabs3 CRM is more than just a tool; it’s a partner that can help transform your practice by boosting client engagement and more.

Experience the transformative power of automation in managing and expanding your law practice by scheduling a demo or signing up for a free trial today.

Standing out from the crowd can be difficult in today’s busy software marketplace, but we can’t think of a better way to stand out than to be recognized for customer satisfaction.

At Tabs3 Software, we’re pleased to announce that we have been awarded nine badges from G2 for Quarter 1 of 2023.

G2, the largest tech marketplace and review platform in the world, rates vendors and products on a quarterly basis using feedback from user reviews, along with information compiled from web resources and social media.

As a result, it has become a highly trusted resource used by professionals who are seeking to make informed decisions about which software solutions to invest in for their businesses.

Tabs3 Software has been recognized with the following awards:

High Performer: Overall

• Legal Practice Management
• Legal Case Management
• Legal Billing

High Performer: Small Business

• Legal Practice Management
• Legal Case Management
• Legal Billing

Easiest Admin: Overall

• Legal Practice Management
• Legal Billing

Easiest Admin: Small Business

• Legal Billing

The Tabs3 experience

Tabs3 Software provides an integrated suite of billing, practice management, and financial software that simplifies managing matters, calendars, contacts, and documents.

Our products include:

• Tabs3 Billing
• Tabs3 Financials
• PracticeMaster
• Tabs3Pay
• Tabs3 Connect

With an overall G2 rating of 4.2 out of 5 stars, we at Tabs3 take pride in the quality of our products and support. Additionally, nine out of ten clients recommend Tabs3, and we continually receive a more than 98% satisfaction rating from our clients for our outstanding support team.

Here’s what Tabs3 clients are saying on G2:

“Their customer service is great and very communicative. They are consistently coming up with new updates to make our practice more seamless. They have a very handy “how-to” website with easy-to-follow instructions on the many features Tabs3 offers. Also, I really appreciate the video tutorials.”

• Kimberlee S.

 

“The software works quite well for our firm. The support staff is personable, pleasant, patient and very knowledgeable. Honestly, there is not much to dislike about working with Tabs3 Software. It is such an improvement over our old billing software.”

• Patricia M.

 

“The system-wide integration of client data, billing, accounting, etc., helps us track our finances and productivity very well. We tried other systems that integrated with Quickbooks, and we much prefer having everything under one software platform. Also, Tabs3 has the best customer support of any software company I have ever used.”

• Jeffrey L.

To see more reviews, visit Tabs3 on G2.

About Tabs3

Software Technology, LLC, the maker of Tabs3 Software, is a leading provider of legal software in the United States with nearly 45 years of innovation and more than 100,000 active legal professionals using its products. Tabs3 Software offers billing, trust accounting, practice management, and payment solutions for solo to midsized law firms.

About G2

G2 is the world’s largest and most trusted software marketplace. More than 60 million people annually—including employees at all of the FORTUNE 500 companies—use G2 to make smarter software decisions based on authentic peer reviews. Thousands of software and services companies of all sizes partner with G2 to build their reputation, manage their software spend, and grow their business—including Salesforce, HubSpot, Zoom, and Adobe.

For law firms, it can be overwhelming to sort out exactly what software and programs you need in your starting line-up to operate at peak performance. Firms need to balance utility with user interface, cost, frequency of use, and a whole host of factors that can be difficult to predict.

This can result in a team of tools that aren’t built to complement each other and may actually slow your firm down.

This can be as frustrating as watching your favorite college basketball team miss a game winning shot during March Madness.

But while tech grievances are common, your legal practice can leave them in the past. It’s possible to build a system with all the functionalities your firm needs to succeed, without outdated or mismatched technology that drags you down.

If you’re looking to create a more efficient workflow for your law firm, here’s the starting line-up to get you there.

Practice management software

Practice management software is a centralized system designed to help legal practices function more efficiently. The software itself can range from all-in-one packages to customizable solutions designed specifically for your law firm, but the end goal of these solutions is to allow firms to manage their entire practice from one intuitive, convenient interface.

There are many functionalities within practice management software that support better workflows and task tracking for attorneys, including matter management, documentation, calendaring, communication, and more.

Matter management

Matter management tools keep case files organized, enabling your team to store all case data, files, contact information, phone records, tasks, and calendar events in one secure system. Authorized team members can collaborate with one another in the system from their desktop or smartphone, making it easy to find what you need, no matter where you are.

Document management and automation

Look for legal practice management software with built-in document management. This feature lets teams track who made what changes in a document, and when they did it. Your software should also enable linking between documents and matters. As a result, team members have more transparent collaboration, as well as a clear history of case matters and updates.

Document automation allows firms to build custom legal templates to save time on generating document. With document templates, team members can easily populate client or case information into the template, which helps reduce human error and manual administrative time.

Calendaring

More than your average calendar app, integrated calendars enable you to schedule tasks and appointments for individuals, groups, or the entire firm. The best software will also include calendar plan templates to schedule a series of events following a kick-off date, such as automated follow-ups after a client is onboarded.

For extra points, practice management calendars also alert you to double bookings. This feature can save hours of untangling scheduling problems and prevent missed appointments.

File-sharing and eSignature capabilities

Two-way secure file-sharing makes it easy to collaborate with clients and outside parties while minimizing risk for all involved. With eSignatures, clients can sign legally binding documents from any device, eliminating the need to print, sign, scan, and email documents. This improves the client experience and boosts turnaround time for documents, since clients are more likely to quickly sign and send forms when you make it more convenient for them to do so.

Time tracking software

Time tracking software can streamline administrative tasks and make tracking billable hours easier for everyone. When members of your legal team don’t account for their time until the end of the day (or the end of the week), it can lead to inaccurate reporting. This can result in either shortchanging the firm or overcharging the client.

Neither scenario is ideal for growing a firm and can even pose compliance risks for your practice.

Time tracking software lets team members record how they spend their time throughout the day, which creates an accurate picture of their activities as they work. Look for software with mobile capabilities so your team members can track time no matter where they work.

With time tracking reports, your team can also analyze how they spend their time so you can check on their performance, client time allocation, and administrative pain points. As a result, firms can make informed decisions regarding how they need to spend their time.

CRM

Client relationship management software (CRM) is a tool that helps firms manage their client intake process and marketing efforts. Legal CRMs are built specifically with law firms in mind, which reduces the need for heavy customization.

Legal CRM provides many valuable tools for law firms, including email and text campaigns as well as automated follow-ups.

Automated client follow-ups

A robust legal CRM provides automated client follow-ups via email, phone calls, and/or text messages. With CRM software, firms can send automatic reminders about upcoming appointments or other deadlines. Firms can also use automated messages to follow up on missed calls to keep the conversation going with potential leads.

Email drip campaigns

Email drip campaigns can build stronger relationships with your leads by creating valuable touchpoints. For prospective clients, email campaigns can communicate information about the services your firm provides or next steps in the client intake process.

Text message functionality

Text messages have almost a 98% open rate, so it’s an important resource for client communications. With a legal CRM, firms can share documents securely by text, as well as important reminders and next steps for clients. You can set up text message communication based on certain triggers or to send to multiple groups.

Billing and invoicing software

Billing and invoicing does not have to be complicated. With the right software, firms can create efficient systems that improve payment processing and compliance reporting without the usual headaches.

Get bills out quickly and easily

If your time tracking software is integrated with your billing software, creating and sending bills can be a quick and easy process every time.

Billing software makes it easy to:

• Set up automated batch billing or send invoices one at a time. Bills can be password-protected for high-profile clients.
• Pull billable hours from time tracking into client invoices with easy editing features for bills that need review.
• Send invoices at the same time each month to create consistency for your clients.
• Run advanced reporting to review records and ensure compliance.

As an added bonus, billing software makes it easy for firms to bill with flexible rate types such as split fee, flat fee, contingency, retainer, progress, or task-based billing.

Get paid faster

Within a robust billing and invoicing software, firms can use tools that will help them get paid faster, while also creating a streamlined payment experience for clients.

Look for software that accepts credit cards and online payments. Many clients prefer paying online because of the added convenience and are more likely to pay invoices in a timely manner. This helps with your firm’s liquidity and reduces the time it takes you to follow up on past-due collections.

Trust accounting

Trust accounts have very specific parameters for compliance and state regulations. Billing software helps build trust accounting that is efficient and in compliance for your peace of mind.

Trust accounting features can provide:

• Intuitive tracking and dashboards
• Three-way reconciliation reports for trust accounts
• Notices when an account falls below the minimum threshold
• Tracking for an unlimited number of trust accounts
• Positive Pay programs for your bank’s fraud prevention program

These features make it easier to manage trust accounts with confidence while providing increased transparency for clients.

Make your tech stack work for you with Tabs3 Software

The technology you use should make your law firm easier to run, not harder. For a well-balanced and complimentary tech stack, an integrated system of practice management, CRM, time tracking, and billing software will create a winning strategy for you and your clients.

Build the tech stack you need with Tabs3 Software. Tabs3’s suite of client and law firm-friendly tools offers fully integrated billing, accounting, and practice management tools to help law firms run more efficiently and profitably.

To see how Tabs3 can help your law firm work better, schedule a walkthrough demo today.

While computer hardware started the digital age and catapulted our technology to where we stand now, software is what has transformed our daily lives, and what will lead to exponential growth moving forward.  

But what is software, exactly? How did it begin? How did we end up here today, and where might we go tomorrow?  

The answer is surprisingly complicated. Not because the history is unclear, but because the inherent properties of software have made it one of the most collaborative and influential global inventions of the modern era. With such an abundance of incredible breakthroughs, innovative scientists, and memorable moments, it’s impossible to identify every critical step along the way.  

And it’s just getting started. 

What is desktop software? 

First, let’s take a step back and define what exactly desktop software is (and even then, the answer has changed over time).   

Today, we understand software as a set of instructions given to a computer to help it accomplish a set of goals. Software in general is a collective term for applications, programs, and scripts that run on a computer or any other programmable device.   

Desktop software can also be referred to as application software, and it’s typically installed over the personal or work computer. It’s a version of a service or web application located on your device, which allows that computer to interact with the application without directly connecting to the app’s website.   

As a whole, desktop software today provides useful cross-platform solutions that don’t require intensive web services and don’t impact your computer’s core architecture. Desktop software is designed to be user-friendly, stable, responsible, and customizable to fit the user’s preferred operating system.  

In other words, it’s a great option that gives you the best of both worlds when efficiently accessing information and services from your computer.  

The early days of software 

The first desktop software is difficult to trace, and even more difficult to trace outside of the origin of the computer. This is because as long as computers have existed, we’ve been telling them what to do. Furthermore, as mentioned earlier, the development of the computer and its software was an incremental process, with hundreds of individuals contributing to its development over time.  

While the concept of the computer dates all the way back to 1822, it took a while for scientists and mathematicians to construct a useful model.  

• 1822: English mathematician Charles Babbage conceives of a calculating machine run on steam power. 
• 1890: Herman Hollerith develops a punch card system to use during the American census (his company would eventually become IBM). 
• 1936: Konrad Zuse creates the first programmable computer. 
• 1946: John Mauchly creates the ENIAC, a programmable computer, during World War II. The ENIAC was the first computer to house multiple sets of instructors. It was programmed mostly by women who had been previously working as human computers.  
• 1948: The Manchester Baby at the University of Manchester is the first stored-program computer to execute a piece of software, created by Tom Kilburn. 
• 1950: Kathleen Booth develops the first assembly language to make it easier to program the computers she worked on.

The 1940s can claim the first software, even if the idea of “desktop software” didn’t come around until decades later. The term “software” itself became popular in the late 1950s. Before that time, computers weren’t available commercially, and scientists mostly created their own programs (aka software).   

Everything changed in the 1960s, when the Programma 101 became the first desktop computer sold to the average consumer. The Programma 101 offered the general public a desktop computer that anyone could use. The 65-pound machine was the size of a typewriter and had 37 keys and a built-in printer.  

Desktop software through the years 

The 1960s 

At the advent of the personal computer, most software could only be purchased alongside the computer itself as a bundled purchase, directly through the manufacturer. When a customer bought a “minicomputer” (which could still clock in at upwards of 50 pounds), the computer did not come with pre-installed software. Any software had to be installed by computer engineers.  

The 1970s 

Microcomputers ushered in the age of the personal computer. The first generation of personal computers started with the Apple II, Commodore PET, and TRS-80, which were followed much later by IBM’s PC desktop system.  

IBM began selling software in the late ‘60s and early ‘70s, which was the first time commercial software was available to the average computer. This means that users could add different types of programs to any computer.  

The first version of Tabs3 Billing Software was installed at a law firm in Lincoln, NE in 1979. 

The 1980s 

The 1980s were a big decade for computers, particularly personal computers. First, the Osbourne 1, the first portable computer, was released in 1981. While it was the predecessor to the modern laptop, it still weighed more than 24 pounds.   

Also in 1981, IBM released its first personal computer, which included one of the earliest operating systems, the Microsoft MS-DOS. IBM’s brand recognition launched personal computers into mass-market use. The IBM PC led to the creation of a vast ecosystem of software for use with the platform.  

Then in 1983, a company called Microsoft Corporation announced a Graphical User Interface (GUI) for its operating system. The product was first called Interface Manager, and Bill Gates would later change the name to Windows.   

Microsoft 1.0 was introduced in 1985. 

The 1990s 

In 1991, the Linux operating system created the first major competitor for Microsoft (and it’s still one of the most common operating systems in Android phones and supercomputers today).   

Prior to the 1990s, most software was distributed via floppy disks. With the rise of CD-ROMs, users could download programs faster and more efficiently.    

Web browser software also emerged in the 1990s, bringing the Internet (and video games) to the masses. 

The 2000s 

Personal data assistants (PDAs) and smartphones flourished in the early 2000s, making it possible for consumers to take computers wherever they went. Operating systems such as Apple iOS and Google Android led to programs known as “apps” becoming commonplace.  

Desktop software today 

After evolving from manual programming to floppy disks to CD-ROMs, users can now download software directly from the internet, cutting out middlemen manufacturers and cutting down costs.   

Software has also become increasingly complex, able to accommodate a variety of functions that would have been unimaginable even 30 years ago.    

Take practice management software, for example. At first, practice management software was much more single-purpose: a program to track time and billing. Today, desktop practice management software encompasses a whole suite of services that dramatically reduce the time required to execute tasks. Many products are available on the cloud, but desktop options meet critical needs for law firms, providing them with deep functionality, security, and flexibility.   

Just like the ENIAC helped replace human computers to solve complex mathematical equations, modern practice management software is a fully integrated ecosystem capable of replacing time-consuming labor with the speed of a machine. And just like the ENIAC in 1948, it’s not replacing people. It’s allowing people to work smarter, freeing up time to focus on the things that truly matter. 

The future of desktop software 

Computers and software are still evolving. Artificial intelligence is changing the face of technology at exponential rates, and advanced programs are capable of more and more every day. Desktop software is more important than ever, and its programs are becoming increasingly complex.   

When it comes to software, the only limit is your imagination. With near-limitless possibilities as one of the world’s most innovative industries, it’s only going to get better from here.   

Ready to get started with Tabs3 Software, the desktop solution that will grow with your firm? Get in touch or schedule a walkthrough demo.