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Master Trust Accounts & WIP with LawKPIs

February 7, 2025

Master Trust Accounts & WIP with LawKPIs

Introduction

Managing a law firm’s financial health requires careful oversight of trust accounts and work in progress (WIP). Without the right reports and dashboards, firms can struggle with compliance issues, unbilled work, and trust fund mismanagement, which can lead to financial and legal risks. The WIP and Trust Dashboard from LawKPIs totally integrates with Clio and provides a comprehensive solution, ensuring that trust accounts are accurately managed while keeping track of all unbilled work. With real-time insights, law firms can maintain compliance, improve cash flow, and ensure clients’ funds are handled correctly.

Purpose

The WIP (Work in Progress) and Trust Dashboard provides critical insights into the firm’s management of trust accounts and work in progress (WIP). It helps law firms ensure compliance with trust account regulations while tracking unbilled work and the allocation of trust funds. This dashboard is essential for maintaining accurate financial records, avoiding trust account shortfalls, and ensuring that clients’ funds are handled properly according to legal requirements.

Visualize The Impact

  • “What if you had complete visibility into work in progress and trust account balances for all clients? How would this help you avoid compliance issues and ensure timely billing?”.

  • “How much peace of mind would it bring to have automated tracking of trust account shortfalls and WIP that needs attention?”.

Who Uses It?

  • CFO: To ensure that trust accounts are managed in compliance with legal and financial regulations and to monitor any shortfalls or discrepancies in trust funds.

  • Firm Admin: To oversee the allocation of trust funds to specific matters and manage WIP to ensure that unbilled work is tracked and converted into revenue.

  • Managing Partner: To monitor overall trust account health and ensure that the firm is handling client funds properly, minimizing the risk of compliance issues.

When to Use It

  • Monthly or Quarterly Financial Reviews: This dashboard is critical during financial reviews to ensure that trust accounts are balanced and any shortfalls are addressed.

  • Compliance Audits: Use this dashboard to prepare for internal or external audits, ensuring that the firm is in full compliance with trust account regulations.

  • Billing Reviews: Regularly monitor WIP to ensure that completed work is being billed and that unallocated trust funds are applied to client matters in a timely manner.

How to Use It

  1. Monitor Trust Shortfalls: Use the “Trust Shortfall” section to identify matters where the available trust funds are insufficient to cover the work completed. Immediate action is needed in these cases to either request additional funds from the client or adjust billing practices to avoid further shortfalls.

  2. Track Trust Aging: The “Trust Aging” section helps the firm monitor how long client trust funds have been outstanding. If funds have been held for too long without being allocated or billed, the firm may need to follow up with clients or adjust its trust management practices.

  3. Ensure Proper Fund Allocation: Regularly check the “Unallocated Funds” metric to ensure that all client funds are properly assigned to specific matters. Unallocated funds should be minimized to avoid any compliance issues or accounting discrepancies.

  4. Manage Work in Progress (WIP): The “WIP” metric shows how much work has been completed but not yet billed. This helps the firm ensure that all completed work is billed in a timely manner, improving cash flow and minimizing delays in receiving payments.

  5. Prepare for Audits: Use the dashboard to ensure that all trust accounts are properly managed and compliant with legal requirements. This is critical for avoiding penalties and maintaining the firm’s reputation.

Key Metrics

  • Trust Clients: The total number of clients with trust accounts.

  • Amount in Trust: The total funds currently held in trust for clients.

  • Amount in Operating: The total funds in the firm’s operating account.

  • Unallocated Funds: Funds that have not yet been assigned to a specific matter or account.

  • Trust WIP: The value of work completed but not yet billed, which is pending payment from trust funds.

  • Trust Shortfall: A breakdown of matters where there is a shortfall in trust funds, showing how much is owed versus the available trust balance.

  • Trust Aging: Tracks the outstanding trust account balances, broken down by how long the payments have been overdue (current, 1-30 days, 31-60 days, etc.).

Value

The WIP and Trust Dashboard is an essential tool for law firms looking to streamline financial management and maintain compliance with trust account regulations. By providing insights into trust shortfalls, unallocated funds, and work in progress, this dashboard enables firms to make informed decisions that protect client funds, improve billing efficiency, and enhance overall financial transparency.

Trust account mismanagement and delayed billing can lead to major compliance risks and financial inefficiencies. Law firms need a reliable system to track WIP and trust accounts effortlessly. The LawKPIs WIP and Trust Dashboard empowers firms with real-time insights, ensuring accuracy, compliance, and optimal financial performance. Don’t let trust fund mismanagement and unbilled work hold your firm back—embrace a data-driven approach to financial success today!