Best Practice Tips: Law Firm Accounting/Finance Position

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. Four of my partners and I just split off from a large law firm in Phoenix, Arizona, and started a litigation boutique firm with five associates. As we staff our nine-attorney firm, we are planning on hiring someone to handle our accounting and manage our finances. What type of position should we create and what level of experience should we be looking for?

A. The size and skill of a law firm’s financial function usually varies directly with the size of the firm. Larger firms with a larger volume and more complex transactions require more sophisticated systems, procedures, and controls, and personnel with the knowledge and experience to operate effectively and efficiently in a more complex environment. The title for a law firm’s chief financial officer will usually vary with the skill required for the position. Typical titles include:

• Accounting manager (small firms)
• Controller (medium size firms)
• Director of finance (large firms)

In a small firm like yours, where financial activities are typically uncomplicated and volume is relatively modest, an accounting manager ordinarily oversees the finance function. The accounting manager is often a bookkeeper/billing collections clerk who handles the accounting, payroll, billing, and collections.

Some firms this size hire an experienced firm administrator to handle the accounting manager functions and manage other aspects of the firm such as human resources, IT, facilities, marketing, etc.

I suggest that you hire an experienced firm administrator or full-charge bookkeeper.

Click here for our financial management topic blog

Click here for articles on other topics

John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.