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Why Law Firms are Outsourcing their Finance and Accounting?

By November 3, 2022March 18th, 2024No Comments
Law Firm Finance & Accounting Outsourcing Blog

Working and managing a law firm is a tedious task. Spending hours doing work inefficiently reduces the focus of the clients and also profitability. Sometimes the help that a law firm needs is for small tasks like invoice processing, paying bills or recording receipts.

Law firms can thus opt for a simple and cost-effective strategy for data processing and back-office support. This way you can focus on doing what you do best rather than worrying about accounting and related issues.

Legal process outsourcing is one option for law firms as it provides better enterprise management. For a business to prevail and function profitably, close attention to detail is required. Law firms may initially take up the task of handling the bookkeeping on their own but may not be very successful as the scope of business grows. The organization can see that the benefits are extraordinary in the case of outsourced accounting services.

Reasons for Outsourcing Finance and Accounting:

Bookkeeping often takes a backseat when it comes to legal organizations. They have priorities which need more attention than these back-end tasks. Some reasons to switch to outsourcing are:

Billing and Accounting Systems

A law firm follows separate systems for accounting and billing. Accounting compliance needs to fulfill all the legal requirements. Incorrect integration of these systems might lead to issues like an incorrect projection of revenue, duplication of data, billing issues etc.

Matter Costs

Matter costs are costs incurred on individual clients. Multiple clients in law firms make it difficult to record these costs. The reimbursable costs are recorded in profit and loss accounts and advance costs are recorded in the balance sheet. It is crucial to record these costs and put them under the appropriate heads.

Handling Multiple Funds

A law firm handles various types of funds for the clients like escrow funds, retainers, settlements etc. These funds must be accounted for properly and are not mixed. Outsourcing involves appointing experts to look after these records and thus reducing a considerable headache for the firm.

Statutory Compliances

online laptop paperwork

As your law firm grows and you scale up the ladder, there is a compelling need for you to comply with all the policies related to finance, accounting and taxation. If any of this is neglected, it may hurt your growth. Outsourcing can minimize any errors in the recording and compliance process.

Compensation Reporting

Most of the systems generate a standard report when it comes to recording compensation. Outsourcing involves experts working on the same so they can differentiate the compensation of associates and partners based on billable hours, receipts or management of case matters.

Creating a More Profitable Organization

Legal entities can easily outsource their financial and accounting-related tasks. It helps to differentiate an organization from the market and also helps to control overhead costs. Outsourcing back-end tasks can help provide excellent services to clients and generate profits at the same time.


ARDEM offers customized data extraction services, data mining, data document processing and data processing services for legal organizations. ARDEM offers comprehensive accounting services to law firms so that they can function the right way.

ARDEM provides Business Process Outsourcing and Business Process Automation Services to established companies to help them improve operational Efficiency and Reduce Costs.  For more information please reach out to us  at or call us at 908-359-2600.