LawBank Partners with Watson to Offer End-of-Year and Future Planning Program to Solo and Small Law Firm Community
LawBank recently partnered with Watson, a back-office support services firm, to offer a presentation on end-of-year planning to LawBank’s solo and small law firm community. The program was titled “Practice Management: Prepping Your Law Firm for Year-End and Planning for the New Year,” hosted by Brian Meegan and Aubree Thayer of Watson. Founded in 2012, Watson provides billing, bookkeeping, legal assistant, and paralegal services to approximately 40 law firms, most of which are solo or small. Brian Meegan is the CEO and Founder of Watson and serves as the Managing Member of Evergent Law, LLC. After experiencing less focus and freedom in his law practice, Brian founded Watson due to spending too much time on administrative tasks. Aubree Thayer is Watson’s Operations Manager. She brings 20 years of executive, billing, and bookkeeping experience from local and national law firms.
Aubree began the presentation with the topic of law firm year-end planning with a recommendation to start preparations for end-of-year in October. This allows for plenty of time to conduct end of year analysis and review before the holidays come.
Aubree provided a list of priorities for small law firms to focus on, including cleaning up accounts receivable to see which clients have outstanding balances. Reminding people of their balances before the end of the year increases the possibility of a payment within the calendar year.
Another priority for solo and small firm end of year planning should be to get W-9s for all 1099s, including any vendor paid more than $600 throughout the year. With the unique year of the COVID-19 pandemic, Aubree discussed PPP Forgiveness Applications. She advised that businesses must file ten months from the end of the covered period to avoid interest in forgiven amounts. To simplify the process, she mentioned that there are new “EZ” forms that can be utilized for loans under $50,000. Though, Aubree recommends checking with your business’s bank to see what applications need to be filled out.
Solo and small firm lawyers should also ensure that COLTAF balances are reconciled to match client billing balances.
Perhaps one of the most critical tasks is to have a CPA in place to handle taxes. It is crucial for solo and small firms to have receipts in order and input all necessary information into an accounting system, such as QuickBooks. Given that many people were working from home in 2020, it is essential to determine what expenses were utilized for business purposes that may not have been considered in the past. For example, firms should consult with a CPA to determine if cell phone service, internet, and home office expenses can be claimed. The last year-end priority that Aubree discussed was specific to firms that have payroll. She emphasized the importance of determining employee bonuses and 401k payments before December 31.
Next, Brian and Aubree covered what planning should look like for a new year. To begin, firms should evaluate the past year and note what worked, what difficulties may have arisen, and what changes need to be made to prevent the same challenges in the future. If a firm cannot yet process credit card payments, Aubree recommends considering LawPay, a credit card processing company specializing in law firms and understands COLTAF. Programs like LawPay and those similar dramatically improve a firm’s collection percentages by accepting credit card payments. When planning for the future, it is also beneficial to analyze your utilization and realization rate by keeping track of administrative or paralegal times you are spending versus billable attorney work. This allows you to consider if you need to outsource any work, hire within or embrace a technology tool that can streamline specific tasks. Lastly, Aubree stressed the importance of always requesting retainer funds —especially during uncertain times. Often, small firms cannot wait for payments, so it is vital to keep open communication with clients to ensure the retainer fund does not run out.
The presentation concluded with a Q, and A. Aubree provided an overview of LawPay and shared that LawBank members receive a discount. Interested members can access more information through Member Resources. Participants were curious about which programs Watson recommends for solo and small law firms. Aubree recommended QuickBooks online as her choice bookkeeping program and Clio as her choice of billing software.
If you are interested in attending future practice management presentations that can help your solo or small law firm thrive, visit LawBank’s events page to view upcoming programs.
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