Money Matters! Breaking Down Law Firm Finances

Episode Notes

Transcript

Adriana Linares (00:29)

As usual, and gratefully, I am your host Adriana Linares. With me today is Terrell Turner, a friend of mine and a colleague that I know through the American Bar Association’s Law Practice Division. Terrell runs a successful bookkeeping and accounting firm. He specializes in helping lawyers. We know each other because Terrell has been on the committee, various committees, but specifically helping with the Finance Committee of the Law Practice Division. And, close to my heart,

He actually started and runs the podcast for the law practice division, which is one of the many reasons that I asked him to come on today, along with giving us some good advice about finances. Terrell, tell us a little bit about yourself. Thank you for coming on the show. And please put a plug in for the podcast that you spend timeless hours producing for the law practice division.

Adriana Linares (01:17)

Yes,

Terrell Turner (01:18)

Absolutely. First, thank you for having me. And I will say is my background is not in the legal industry. I am an accountant. I went to school for it. I worked in that industry for like 13 plus years. And when I decided to leave the corporate world of doing corporate finance and helping a startup raise over 120 million in private equity funding, I said, I want to start my own firm. And in doing that, I started creating content and

really helping people understand the finance side of what it means and how it relates to their business. And someone from the American Bar Association saw the content I was doing, asked me to write some articles for the ABA. And that’s what I started doing, really helping lawyers understand finance concepts and making it less complicated. After doing that for about a year, they asked me if I wanted to get more involved. And I said, yeah, I’m glad to help where I can. And that eventually led to

someone pitching the idea of we really need a podcast for the law practice division because we have a lot of stuff in writing, but there wasn’t much in audio form because people want to consume content sometimes in writing, sometimes in audio, sometimes in video. And so I said, well, I can help with that. And it started off as me just helping in the background and we couldn’t find a host who wouldn’t be self promoting.

on the podcast. And so I volunteered and it’s been going well for last two and a half years. The podcast is doing well where we covered all topics related to running a practice from, of course, topics in AI to topics in pricing, billing, to also kind of how to improve your legal writing or how to help your staff improve their legal writing. So everything related to running a practice and

And as you mentioned, I run an accounting firm outside of that. We specialize in bookkeeping and CFO services for law firms.

Adriana Linares (03:20)

I love it. What’s the name of the podcast, please?

Terrell Turner (03:22)

Name of the podcast is the Law Practice Podcast. You can find it anywhere you listen.

Adriana Linares (03:25)

I am just fine.

Right. I want to make a side comment because the way you got started with the ABA and specifically the law practice division, which is very friendly to those of us who are legal professionals, but not necessarily with a JD, is by writing content for the law practice division. We are always, always, always looking for writers and contributors. So if that is something that interests you, please visit the law practice division’s page under the ABA.

umbrella and you will find a way to connect with somebody on how to contribute. It doesn’t cost you anything. You don’t get paid for it either, by the way. But it really is a great way to get started and, you know, meet a lot of other professionals and lawyers in the field. If you can’t find that direct contact, you can now contact me or Terrell to learn more about how to get involved. We highly encourage you to do that. So Terrell, thank you for that.

I’ve got a topic that I wanted to start for our first segment with you on because I was looking at your website and there was a concept or just a note on there that I liked that we don’t talk about a lot, but you had something on there that I really liked and that was the idea of looking at and thinking about team revenue, which is obvious, right? The whole firm’s revenue comes from the team, whether you’re a team of one or you have an assistant or a VA that works in the Philippines and helps you. So can you just…

talk to us a little bit about thinking about team revenue, how to measure it, and what do I do if someone on my team doesn’t necessarily bill? Do I consider that as part of my team revenue?

Terrell Turner (05:06)

Yeah, I think

it’s a very interesting concept because when you think about any type of law firm, people immediately think about just the lawyers. And then sometimes they think about the legal assistants and the paralegals. But one of the things that every lawyer knows is those are not the only functions that it takes to actually run a law firm. There’s a ton of stuff that happens in the background. And when you want to really, you

build a firm, even if you’re a solo, there’s still some other non-legal functions that happen. And so I like to encourage people to find ways to really evaluate. If we look at all of the costs that we incur for the people involved and the functions in your firm is we have to have a way to place some type of value on it. And that’s how we came up with this concept of looking at your team revenue and

And part of that I think really just comes down to looking at all the revenue that your firm generates. And then if we compare that to how much it costs to operate your firm, I say a general rule is you want the revenue to be three times that number. And what that generally gives you some guidance to say is,

That means your firm has enough revenue to cover the salaries and expenses of your team. has enough to cover, you know, your overhead, your operating costs, and then it has enough to cover taxes and to still have some, some profit left over for the owners. But I think the big thing about looking at it that way is it gives you a way to really see the impact that everyone else has on your team because.

Let’s say, you if you’re a solo attorney and you hire a VA overseas and a lot of times you’re like, well, this VA doesn’t, you know, generate revenue. If we need to cut back on calls, we’ll immediately cut that. And I tell people, I was like, wait, before you make that decision, let’s think about this is if that person wasn’t there, how much of your time would need to be taken away from legal work and now go to admin work and

When you think about it, when you start thinking about it that way, it starts to really help you realize like, Hey, these non-billing staff members do add some value to our operation.

Adriana Linares (07:25)

course. Admin work, I think is where most lawyers don’t realize is the biggest loss of potential revenue. I mean, it just seems to them and especially younger lawyers, and of course we always say they don’t teach you this in law school. It’s an important business factor. And of course it’s what keeps your law firm running when you aren’t actually billing. But they think they’re working in a way where, I don’t know, I don’t know how to explain it, but you think you’re going to save time by doing your own bookkeeping, which

If you’ve been listening to this podcast long enough, when I do a new firm consult and I go, okay, well, you’re going to need Microsoft 365, you’re going to need a practice management program, you’re going to need a PDF manipulation tool, and man, you are going to need a bookkeeper out of the gate. Because if you think that you’re going to take time at the end of the month to reconcile your books, you just won’t. And I say this all the time. And you’re going to spend the week between Christmas and New Year’s not enjoying a little time off during a slow week. You’re going to be sitting there reconciling your books for the end.

higher year. So anyway, that sort of stuff that they keep pushing off, I love to encourage them to find the help that they need, whether it’s through a VA, bookkeeping is always number one on my list. So yes, I think that is really important to consider. You had, I think, a calculator on your website. Can you tell us?

Adriana Linares (08:44)

So what will

Terrell Turner (08:44)

So we

came up with this concept called the employee ROI calculator. And what this is, is a quick way for you to just plug in, if you want to look at on an individual employee basis, or if you want to look at your entire team, what you can do is easily just plug in, here’s how much this person costs the firm, like from their salary, the benefits, any direct costs related to that employee. Now,

For the legal team, you can also put in, here’s how much revenue they generate. And then the calculator is gonna give you a number and say, hey, this person, the revenue is X times bigger than what they cost the firm. Now, once you’re able to kind of plug that in, you can kind of see where your staff is in comparison to what you’re paying them. And the way that we’ve helped a lot of firms kind of think about that is, let’s say if you’re going through,

you know, hiring a new staff member and this person’s gonna be a legal, they’re gonna do legal work. Well, you have no idea what is a good salary range to hire them at. And so what the calculator you can do is if they come back and say, hey, they wanna make, let’s say $60,000. Well, you plug that number in and then you say, okay, all right, based on the amount of legal work they’re gonna do,

how much revenue will they generate, and it’ll tell you whether they’re gonna be doing three times what they actually cost or more. And if they’re below that number, you know, okay, all right, either we’re gonna have to give them higher targets or we’re gonna have to negotiate on the salary. And because it was a big pain for a lot of attorneys who were never used to negotiating salaries. It became a great tool for them to use for something like that, because I will say,

salary negotiations can be, it’s an emotional process because you might be thinking about like, well, how much money did I want to make when I started as a lawyer? Or you may be thinking like, my goodness, like what they’re asking for is way more than I ever got paid when I got started. So you need some objective way to kind of evaluate it, to kind of pull some of the emotions, be it good or bad emotions out of the process to be more objective.

Adriana Linares (11:02)

The Calculator. It’s for free on your website, which is at, at.

Terrell Turner (11:07)

So what I will do is I’ll put a pop-up on the homepage and I will leave it up on the homepage. Cause I forget the last tag, the slash, but I guess this is one of those benefits of running the company is I’ll tell the team after this, here’s the slash that we need to have. It’ll be tlturnergroup.com forward slash employee ROI.

Adriana Linares (11:19)

Actually, you know what?

Adriana Linares (11:33)

Love it. Okay. And the last thing I’m going to say, because you made me think of this when you were talking, this is a terrifying story that I’m about to tell. And I don’t know what made me think of it. I think when you mentioned paralegals, I was having lunch with a very, very dear friend of mine here in New Orleans, who is the IT director for a really good sized firm in New Orleans. And he was telling me that thanks to AI, or maybe not thanks to AI, they have not rehired almost

any of their paralegals that have left the firm in the past year. They are almost paralegal free. It’s crazy. So talk about team revenue or ROI or figuring out how to recalculate your expenses and your revenue. fascinating conversation. And I’m sorry if you’re a paralegal listening out there. I am sure you are not going to be one of these people that’s replaced by AI, but it was a very interesting move that they have purposefully kept in place.

to keep their costs down and start to really think about raising their revenue in 2026 and 2027, thanks to technology.

Terrell Turner (12:44)

Now can I say  Something on that? Yes.

I will say, I do think that that’s an important factor. think for the paralegals, what I would definitely say is this is a great opportunity for more paralegals to learn how to cooperate with AI to leverage it. Because I will say is you can make yourself more of a value to the organization if you help bring along the firm on that AI journey.

And, I think that if you kind of sit back and look at it as opposition, like it will become a more tense environment. But I also think for firms, what can be very, very helpful and what a lot of firms are trying to navigate is that new attorneys coming out of school or when you’re trying to hire new attorneys, like the cost to hire new attorneys is going up. so.

firms that are being open to leveraging AI as a way to offsetting some of the costs, what it does is it allows your firm to be in a position to be able to afford some of those higher salaries of new staff members, or if you want to invest more in your marketing strategy, it allows you to find opportunities to shift more money from what, I guess you say.

AI wasn’t doing before, but if AI can start doing it, it makes your firm more efficient and it allows you to really invest in other areas of your firm. And I think that if you don’t start making some of those switches and some of those, some of these strategic moves, like your firm could really struggle in the future.

Adriana Linares (14:20)

You know, I want to thank you, Terrell, for being the yin to my yang, because there I was, doom and gloom, like everybody else. And as you were bringing the positive light to what I said, I thought, you know, you’re right, because this firm specifically is a big firm. So they have an IT director who helps them with their technology. Now, if you are a smaller firm or a paralegal who maybe even does fractional paralegal work,

This is a great way to position yourself to help solo and small firms and actually increase the revenue by bringing the AI expertise, which by the way, they’re still not very good at. So there’s a lot of opportunity, I think, for paralegals to really shine and make a place for themselves and not the future. I hate when we talk about the future of legal. I’ve been saying for 20 years, there’s no future, it’s here. So, all right, we’ll be right back. When we come back, we’re going to talk about some

Another topic that Terrell had on his website that I really liked, which was the good old discussion about flat fee pricing. We’ll be right back. All right. We are back with Terrell Turner from TL Turner Group. And we’re going to talk now about best advice for flat fee pricing. But before I do that, I want to ask you a personal question because it’s one of my favorite things about you. Your firm is owned by you and your wife.

Terrell Turner (15:42)

Yes, that is correct. She is the L in the name.

Adriana Linares (15:45)

I love it. Okay, excellent. So it’s a family business and I love that. And I think that’s really special. So I just wanted to shout out to your wife who I’m sure does much more than just run half of your firm.

Terrell Turner (15:57)

Yes, I will say my wife is absolutely amazing. ⁓ Huge encouragement for me. say one of the benefits is both of us have an accounting and finance background. She’s a CPA as well. And I heard being able to step in and provide some leadership for our accounting team on a daily basis.

It helps me be able to do things like, you know, get involved with the ABA with the law practice division to do more marketing and to get out, do podcasts like this. And so I do think it is a huge, huge, huge benefit to having my wife Lola involved with the business and for us to still like each other after working together.

Adriana Linares (16:42)

That is inspirational indeed, my friend. ⁓ This billable hour just does not die, will not die. As my friend, John Stewart, former president of the Florida Bar Association would say all the time, it won’t die because clients don’t want it to die. Lawyers might want it to die, but clients like it. They’re used to it. And that’s why it continues to just live. And it’s not even on life support. The thing is just living healthily out there in the world.

Adriana Linares (16:45)

You

Adriana Linares (17:09)

I know that’s of interest to a lot of attorneys, especially young attorneys, thinking about how to structure their pricing fees. And there is certainly a place in this world for a hybrid structure of hourly and flat fee and contingency and all the other models. Do you want to tell us a little bit about what you consider best advice for flat fee pricing?

Adriana Linares (17:27)

Yeah, when it come down

Terrell Turner (17:28)

with flat fee pricing, I do think my best advice, first thing is it’s not for everybody. Just as you said, like there are some clients who just are not gonna like the idea of a flat fee. And so I think you just have to be honest with yourself about that. And then I do think that you do wanna be strategic about where you use flat fee. And so I tell firms all the time is,

Flat fee are typically for areas where it’s a little more predictable about what’s going to happen when you deliver the service. So if you are providing a service and you have absolutely no idea like how much work is gonna take, a flat fee is a very risky way to approach that. Because I’m like, there’s no way for you, if it goes bad, there’s no way for you to stop it.

Adriana Linares (18:15)

Bad business.

Adriana Linares (18:16)

You

Terrell Turner (18:22)

if you’re doing flat fee on something that’s unpredictable. And so I do think this is where it really requires people to really be strategic and thoughtful about, okay, what are you doing? What does that process look like? And I would say, I mean, if you are, been using your technology or your practice management system consistently, the data will help you understand like, Hey, when you do this type of case,

Here’s about how long it takes, here’s how much effort, here’s kind of the steps and the stages. If you’ve been using the system correctly, or let me say consistently, that data will help you kind of figure out like, you know, what should our flat fee pricing be? And then the other thing that I will say is, you do want to revisit your flat fee pricing, I say at least annually, because your underlying costs,

may be consistently changing. And I’ve seen firms who they set their flat fee pricing maybe four years ago. And I’m like, a lot has changed in the last four years. Like every one of your staff members have been getting paid more in the last four years, but your prices have stayed the same. So ⁓ your prices stayed the same, but your cost has been going up every single year. So, which means you’ve just been making less profit. And I’m like, that is not the place you want to be in.

Adriana Linares (19:44)

It sounds like an annual audit about, well, just an audit in general as far as, well, you know, I do technology audits, but an accounting and a finance audit to check on your financial wellness, which I love that term, is a very good piece of advice. Just gotta know. Let me follow up a little bit about what you mentioned when it comes to using a practice management program consistently and correctly. I end up doing a lot of audits.

for practice management systems where a lawyer has been using or a law firm has been using a practice management system for a long time. They’re like, oh, we haven’t been using it to the hilt. Could you just help us make sure we’re using this right? And that’s one of the things that I consistently see that when a law firm sets up their practice management program, they don’t assign practice areas. So maybe you’re a solo and you do a little bit of criminal, a little bit of family law, a little bit of commercial real estate.

But you’re a solo and you think, I don’t need to create separate practice areas for when I open a matter because I know it’s all in my head. I am such a bitch about this. go, are you? You think that come December 31st, you’re going to be able to tell me what percentage of work you did in criminal versus family versus real estate. You might have a ballpark, but you don’t actually have the figures. So what I’m saying and what Tarell.

Adriana Linares (20:50)

kidding me.

Adriana Linares (21:06)

pointed out that’s important for you to realize is your practice management program has the data. You just have to set it up so that at the end of the year, you can look at a practice area and say, this was my most profitable, this is my least profitable. Maybe I don’t do that anymore. And I refer that workout. And on top of that, which of these areas, these practice areas, or even pieces within the practice area, if you’ve really got the system set up right, could I do better with a flat fee structure or

Maybe you end up going the other way, like you said, Jerelle, where we were doing this flat fee, but my God, it’s been costing us this much. So that’s just the follow-up I wanted to do on that. Cause I think a lot of times we buy a practice management system because it was recommended or we were desperate or we launched suddenly and we didn’t take the time to set it up, but this is what those systems are designed to help you do.

Adriana Linares (21:53)

And I totally agree.

Terrell Turner (21:54)

because there have been many situations where I’m sitting down with a firm or we’re doing it virtually and I’m looking through the data. But I usually I like to start off by asking them like, hey, well, where do you think the growth opportunity is in your firm? I remember a talk.

Adriana Linares (22:10)

That’s a trap. You trapped them, Tyrell.

Adriana Linares (22:13)

Well, I mean, I like to know like where where

Terrell Turner (22:16)

What are they thinking about? And so, like they told me, said, well, I think it’s in, you know, this practice area, we should do more of this. And I was like, okay, all right, let’s look at the data to see how the data lines up with that strategy. And when we looked at the data and I said, okay, all right, I see that you have a lot of leads for this type of service. Now, that’s a great thing. That means your marketing is working well. But I was like, let me let you know the bad news. This type of service,

is the one you’re actually losing money on. Every time you do one of these cases, you’re losing money on it. So I would say is we either need to raise the prices or you need to limit the amount of times you do that service or maybe when people come in for that service, you need to offer it as a bundle with something else that is more profitable.

And I think before they got that information, you know, they were probably just going to keep going full speed ahead with that service. And then after I said that, they were like, that makes so much sense. Wow. We’re working so hard, but I like the money just never makes sense. I’m like, that’s why. And so I do think because they had that data, we were able to go through it and help them find that and kind of diagnose that situation.

Adriana Linares (23:34)

I love it. It’s brilliant. Let’s take a quick break. Listen to some messages from our great sponsors. When we come back, I’m going to ask you a couple of questions about CPAs versus bookkeepers. What to expect with working with them, especially for our new solos who maybe haven’t hired a bookkeeper yet, which drives me crazy. And we’re going to talk about QuickBooks. I’m going to ask you a loaded question. I’m very opinionated about this. Is QuickBooks still the queen?

of accounting in 2026. We’ll be right back. All right, Terrell, you don’t do tax work. You do accounting, finance consulting. Do you consider yourself a fractional CFO? Love it. And do you do bookkeeping services? Great. Some CPAs and accounting firms don’t do bookkeeping. And like my personal CPA, whom I love and I’ve been using for almost 20 years in Florida, they’re

Terrell Turner (24:13)

Yes.

Yes.

Adriana Linares (24:30)

Bookkeeping services are very expensive, so I actually use a separate bookkeeper. So I just want you to give us a quick rundown on making those decisions as a new solo, a small firm, a small firm launching, or someone, maybe our bookkeeper is leaving who’s been with us for 30 years, like what do we do now? So ⁓ just treat me like, you know, I’m 10 different lawyers. me broad advice for 10 different scenarios on CPAs, accountants, and bookkeepers, and CFOs, I guess.

Adriana Linares (25:00)

So the-

Terrell Turner (25:00)

First

thing I would say is it is very true. Bookkeepers and CPAs are not the same. And typically what you’re going to find is your CPAs or let’s just put it in the category like you’re the person who prepares your taxes. Like you’re a tax preparer is going to focus on that. That is what they specialize in. Now they need the books or they need the financial statements and able to do that. So

As a kind of a side service, they may offer bookkeeping, but it’s not what they do. And what I often find is that if your tax preparer is doing your bookkeeping, they’re typically gonna charge a premium because it is not what they usually do. They wanna focus on the tax return. Their business model is around doing the tax services or the tax advisory and not doing bookkeeping. So.

What I always tell people is one way for you to really save some money and have someone who truly is focused on providing you the bookkeeping and providing you the financials on a regular basis is to hire a bookkeeper. And don’t just hire any bookkeeper, hire a bookkeeper who actually understands law firm accounting. Because there is a difference.

Adriana Linares (26:21)

Can you tell us what we should expect to pay on a monthly? I will tell you, I was paying $100 a month for the most amazing bookkeeper. Now remember, I’m not a lawyer, just a little consultant with not a lot of business. But she pissed me off because she would password protect my QuickBooks. And then when I was dedicating some time to try and, you know…

tag things and get them right, she wouldn’t give me my password. So unfortunately, I had to fire her because I was like, really lady? So I have someone else that I pay more for. think I pay $1.75 a month now. But I have very limited, but it’s literally worth every penny. So I’m just sharing my number. I might be paying way too much or way too little. Can you tell us average what we should be expecting to pay for bookkeeping services monthly?

Terrell Turner (27:10)

I mean, if you’re a new solo, so let’s just break it down this way. If you’re a new solo and your annual revenue, let’s say, is less than $750,000, I would say you’re probably…

Adriana Linares (27:21)

What are you doing wrong, you new solo? You’re only bringing in sep- that’s the real question there. What? Thoreau, please. Can you-

Adriana Linares (27:31)

Well, mean, reason why I say it that way is because… Who…

Terrell Turner (27:35)

is I’ve talked to some people,

they’re solo, they’ve been doing it for two years and they still consider themselves to be new. And I’m like, ⁓ okay, so I don’t know how people wanna draw the line between what is new. In my mind, new is you just started in the last three months. So it’s understandable, but for some people, under two years is still new in their mind. So I’m just like, all right, so let’s just do it based on.

Adriana Linares (28:02)

Any attorney bringing in $750,000 would be thrilled. I hope every single one of them is. Every time I help launch a new law firm, I say, you’re going to do fine. I’ve never had a law firm fail. You’re going to be more successful than you can imagine. The business is going to start rolling in. You better be ready. OK, sorry to interrupt you. But let’s say we’re a new solo or we’re just an attorney who’s never hired a bookkeeper and we’re doing $750,000. I love that.

Terrell Turner (28:30)

That’s why I say like below that. So, yeah, below that, I would say is you probably want to come in with an expectation of doing paying between 400 to probably $750 a month. And it’s a little more expensive than I’ll say most other businesses because you have trust accounting involved. Now, if your firm has no trust accounting involved, then like I said, it may be a little bit less, but

Adriana Linares (28:32)

Okay, below that.

Adriana Linares (28:34)

So if you’re

Terrell Turner (28:59)

the trust accounting does add some complexity, which is very, important because if that is done wrong, it could stop you from being able to practice law. like that, and that requires a little bit more or a lot more detail kind of tracking to be able to support that.

Adriana Linares (29:17)

hardly need to repeat that when it comes to malpractice claims, issues, and sanctions, the number one administrative, not substantive, but administrative issue is year after year after year, not just accounting and bookkeeping, but mismanaging trust funds and not on purpose, just accidentally getting something wrong. So yes, that’s great advice. Make sure that whoever you’re hiring understands your responsibilities of trust accounting.

and funds and how to keep that straight. So, okay, great. So we’re gonna say five to 600 is probably the average a month, but if you were to bring in a bookkeeper full-time, imagine what that would cost you. So finding somebody third party that is experienced not only in legal, but oftentimes in the specific practice management program that you use can be really helpful. Okay, great. What should we expect?

on a monthly and quarterly basis from our bookkeeper because this is whatever they’re doing is what we end up handing off to our CPA and our accountants to help us with our taxes.

Adriana Linares (30:22)

Yep, so.

Terrell Turner (30:22)

What you should be expecting them to do is they should be able to look at all of your bank transactions, the money that has gone in, the money’s gone out, operating account, if you’re using, let’s say, profit first, or, and if you have a trust account, also your credit card, they should be able to look at all of that and to be able to sort it, organize it, so that you can get reliable financial statements to say, here’s how much money came in, here’s how much money went out, and here’s what the money went out for.

So you can see, okay, did we make money or did we lose money on a monthly basis? You should be able to see that. And I would say you probably should be getting those reports by at least the 15th of the month. If they’re taking a little bit longer than the 15th of the month, I would seriously ask some questions like, hey, what’s going on? Because I know there’s been a lot of firms that I’ve talked to and they’ve said like, hey, we get our reports by the 25th. And I’m like,

I mean, that’s a little late for you to be able to make any decisions because the most of the next month is already done. So it’s like, you’re not going to have enough time to react or make changes if necessary. But you also should be expecting your trust account to be reconciled. So for them to be able to come back and say, we looked at your practice management tool. Here’s what the trust account says. We looked at your bank account and we looked at your financial statements. Here’s the reconciliation between all three.

And if there is anything that is a variance, they should be able to come back to you and say, Hey, these two things, like we need to make this adjustment in, you know, your practice management tool or, Hey, these deposits came in, we didn’t have a customer name for them or client name. need to identify these. And that way, you know, that on a regular basis, you are audit ready. If anything ever comes up from the bar association concerning your, your, your trust account.

Adriana Linares (32:17)

Have you heard stories of lawyers or law firms being bamboozled by their bookkeeper, their controller, their money holder?

Terrell Turner (32:27)

Absolutely. Yes, of course you have!

Adriana Linares (32:30)

Please, please tell lawyers how it is important that while many times that person is the most loyal and the most trustworthy person in the firm outside of you, sometimes you get a bad actor and why it’s important that they also look at these books on a regular basis with a very keen eye. Please tell us.

Terrell Turner (32:49)

Absolutely. I unfortunately it does happen. And a lot of times the reason why it happens is because, you know, this bookkeeper kind of gets to the point where they realize nobody’s checking behind. Nobody’s actually looking at their reports. And so a lot of times, I guess in accounting, we have this thing called the fraud triangle. And one of the, you know, one of them is one of those aspects of the fraud triangle is, you know, pressure. If they’re dealing with pressure in their own life, ⁓

then it opens up an opportunity, you know, opens up the door for that to potentially happen. The next one is opportunity. If they have access to the information or to the bank account to move things around, it’s like they have the opportunity. So if they have pressure, they have opportunity. And then the last one really is about.

Adriana Linares (33:39)

you

Adriana Linares (33:39)

Is it the power and the ability to act?

Terrell Turner (33:43)

Yes, you are definitely. Yep. I would say is that that that really summarizes it to where it’s like if you have all three of those, they have the pressure, the opportunity, and then they have that ability to really act on it. And the thing is, like, if nobody is really looking or checking the numbers, it’s just like all three of those things adding up tend to lead to, you know, fraud happening. And so I always say is that every lawyer should have at least

a conversation about what’s going on in the numbers. Like you don’t need to be an accountant yourself, but you know, every now and then just set up a meeting with your bookkeeper and say, hey, can you walk me through these numbers? Hey, I looked at the numbers. I have a question about this. Like what, what goes into this account? I see that office expenses are way up. What’s in there? And why we’ll say is then you can use, you know, your judgment as a lawyer, because I will say is lawyers have.

really, really good judgments. mean, as you sit down with a client, like you can tell when a client is telling you something that’s not true or a client is kind of like beating around the bush, you’ll be able to tell the same thing with your bookkeeper. It’s just asking them a question, having them explain it. And like I said, if they’re doing their job well, they’ll be able to explain what is in the numbers and they’ll be able to communicate it in a way that you understand. But if they can’t answer it, then I would say is,

you probably need to look a little bit further because at the end of the day, even in the model rules of practicing law like lawyers, you are responsible for what non-lawyers do in your firm. And so if they did something wrong on behalf of your firm, like the bar association is gonna be like, hey, the model rules say you’re still responsible for this firm, for the non-lawyers. And then also from the IRS’s perspective,

The IRS may say like, hey, we understand that they did something wrong. Like they didn’t pay all the payroll taxes, but at the end of the day, this is your business. The IRS is going to hold you responsible for it. So I think lawyers can’t completely take their hands off the wheel. There still should be some baseline understanding of what’s going on with your money.

Adriana Linares (36:00)

That’s right. And in the world of malpractice claims and issues, it’s failure to supervise is what that little issue is. Did anybody think about their dog and the fraud triangle when you were describing that? You know, like when you’ve left the pizza on the coffee table and you looked away for a minute, you come back and you’re like, I sense a fraud triangle here.

Adriana Linares (36:23)

Okay. All right.

I will say if for people who people who do have dogs, they probably as you were explaining, they’ve

Terrell Turner (36:30)

that probably

envisioning or like, my gosh, like I’ve seen it or even.

Adriana Linares (36:34)

if you have small children. If you leave something at the edge of a table.

Terrell Turner (36:39)

If a small child has the ability to reach up there, it being there is just pressure on them. They’re like,

Adriana Linares (36:45)

This is the fraud triangle in every part of our lives. And I’d like to say that here I am, yet 30 years later in this business, I think 10 years with this podcast and no one has brought up the fraud triangle before. Okay, the last thing I’m going to ask you about, and this is a loaded question, is it’s 2026. There have been a lot of disruptors over the past couple years in every aspect of our business lives. I used to tell my now husband, Henry, that

There was nobody that was going to displace Adobe for content creation and manipulation. And here comes Canva at $199 a year and just completely changed the game. And he would, he asked me all the time, what do you think the disruptors are? And I would always say Adobe and QuickBooks are not going anywhere and Microsoft and Microsoft, like we can’t get out from under those. I can’t say that about Adobe anymore. I’m still comfortable with Microsoft.

Pretty comfortable with QuickBooks, but I want to hear it from you. Has there been a disrupter in the business that has dethroned QuickBooks as the top accounting service out there or platform?

Adriana Linares (37:56)

No, I mean…

Terrell Turner (37:57)

I

think QuickBooks is still sitting on their comfortable throne. And I don’t think that there are any disruptors who really have a foreseeable shot anytime soon of dethroning them.

Adriana Linares (38:13)

So I’m a new solo, I’m a new attorney, I’m a new small law firm, what should my accounting package platform, sorry, be? That of course integrates and talks to my case management program.

Adriana Linares (38:24)

So I’ll.

Terrell Turner (38:25)

will

say is QuickBooks is definitely going to be my first go-to and my first recommendation for any lawyer who is like, hey, we need to set up an accounting system. I’m going to recommend QuickBooks. And a couple of reasons why is one is that they’re the giant in the industry. And when it comes down to accounting software,

that really does matter because with accounting software, you’re looking, the biggest thing you’re looking at is banking integrations and banks are not gonna just trust any kind of new platform that just comes along. So because you have layers of data security because that accounting software needs to pull data from the bank into the accounting software. And the banks are like, we’re not gonna let anybody just pull data out because

that becomes a billion dollar risk for the banks. So QuickBooks, think has a really good relationship and they integrate with just about every bank that you can think of. They pull the data in. Also when it comes down to your other, like I say, payroll systems. Most payroll systems, if they integrate with anyone, they’re going to integrate with QuickBooks. And again, that’s because there’s a data security issue.

They don’t want just anybody being able to pull payroll data out of the payroll system and into some other system that they’re unfamiliar with. QuickBooks is the giant in the industry for that. And then when it comes down to a lot of the practice management softwares, even though the practice management softwares may create their own kind of accounting functions within the practice management tool, they still recognize

there’s a whole lot about accounting that they don’t have. So they tend to still integrate with QuickBooks because they know that there’s more to accounting than just money coming in or deposits. And they understand that, hey, they don’t have all those features, but QuickBooks still does. And then I think just, you know, the probably the, the, an operational standpoint, if you do change, you know, your bookkeeper in which

I completely understand why people would change. mean, as your firm grows, that bookkeeper may not be the right fit. Yep. The fraud triangle. It’s like, you want to use a system that it was easy for you to find a replacement. And I will say, I mean, I’ll share a quick story. Like there was a firm that reached out to me about they were looking for a new bookkeeper because their bookkeeper was looking to retire. And so I was talking to them, you know,

OK, what system are you using? And they named their system. And I was just like, yeah, we don’t work in that system at all. I 99 % of our clients are in QuickBooks. I’m like, that system we don’t work with. And he was like, do you know anyone who does? And I’m like, I know hundreds.

Adriana Linares (41:24)

Fred Flintstone. Hold on, Flintstone’s Lawfare.

Adriana Linares (41:30)

I’m just like

Terrell Turner (41:31)

I

know hundreds of accounting firm owners. No one has ever mentioned that solution that you have. So I’m like, I’m not sure you’re going to find, you know, an outside firm or I’m not sure you’re going to find an accountant that knows that. So I can’t help you. And, know, now one of their attorneys is going to have to or one of their paralegals or legal assistants is now going to have to learn that accounting software just for that firm.

Adriana Linares (41:58)

That’s just stubborn. ⁓ God, I cannot. So, you’ve been so great and so helpful. I cannot tell you how much I appreciate your time and all your information. Please remind everybody where they can find friend, follow you, connect with you. You’re such a good human with such a wealth of information. I thank you.

Terrell Turner (42:18)

Well, thank you. I would say the best place is on LinkedIn. It’s Terrell A. Turner, comma, CPA. And you can find me on LinkedIn.

Adriana Linares (42:26)

Thanks so much, Terrell. It was a delight having you on the podcast. And don’t forget, if you’re interested in getting involved with the law practice division, reach out to Terrell first and then me. No, I’m kidding. Reach out to either one of us. We would love to help you get involved. Thanks again for listening. That’s a wrap on another episode of New Solo.

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