01 · Trust reconciliation
Monthly three-way IOLA reconciliation
Trust bank balance, firm trust ledger, and client sub-ledgers reconciled to agree every month — the core of New York trust compliance.
Reconciliation →New York · Law Firms & Legal
New York law firm accounting built around the IOLA trust rules.
For New York attorneys, the books live and die by the trust account. A named Certified QuickBooks ProAdvisor runs monthly three-way reconciliation of your IOLA account, keeps client funds inviolate and separate, and maintains the records New York Rule 1.15 requires — so the work that triggers most attorney discipline is the part you never have to worry about.
- Built around
- IOLA rules
- Monthly from
- $400
- Your ProAdvisor
- Named
The short version.
Law firm accounting in New York is defined by the attorney trust account — the IOLA account (New York's name for IOLTA). Under New York Rule of Professional Conduct 1.15, client funds must be kept separate and inviolate, complete records maintained, and the account is expected to be reconciled monthly via a three-way reconciliation: the trust bank balance, the firm's trust ledger, and the sum of every client's sub-ledger must all agree. New York requires trust records be kept seven years, and a 2026 standard modeled on the ABA's Model Rule 1.15 tightened the reconciliation deadline to 30 days with mandatory three-way reconciliation and seven-year electronic retention. A named Certified QuickBooks ProAdvisor performs the monthly reconciliation, separates earned fees from unearned retainers, and keeps your books current — while the attorney retains responsibility for compliance, as the rules require. Fixed-fee at $400–$2,500+/mo, all 62 counties. We do the books; your CPA files.
Quick answers
New York law firm accounting, in five questions.
- What's different about accounting for a law firm?
The trust account. New York attorneys hold client funds in an IOLA (IOLTA) account that must stay separate and inviolate, with complete records and monthly three-way reconciliation under Rule 1.15. Mishandling it is one of the leading causes of attorney discipline — which is why law-firm books are built around it.
- What is three-way reconciliation?
Matching three figures that must all agree: the trust bank-account balance, the firm's internal trust ledger, and the sum of every individual client's sub-ledger. If any one differs, something is wrong — and in New York it's expected monthly.
- Can a bookkeeper handle my trust account?
The mechanical reconciliation can be delegated; responsibility cannot. A Certified ProAdvisor performs the monthly three-way reconciliation and recordkeeping, but New York holds the attorney — not a vendor — responsible for trust compliance. We do the work and document it for your review.
- What does it cost?
$400–$2,500+/mo, fixed-fee against a written scope, set by matter volume, trust-account activity, and number of attorneys.
- How long must New York firms keep trust records?
Seven years. New York requires attorney trust records be retained for seven years — longer than the five many states require — and a 2026 standard adds seven-year electronic retention. We keep them organized and audit-ready.
Why NY law-firm books get firms caught
Three places New York firms lose trust-account compliance.
Trust violations are among the most common reasons for attorney discipline — and they're almost always sloppy process, not theft. Knowing which of these you're in tells us where to start.
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Discipline risk is real
No monthly three-way reconciliation.
Highest risk · nearly every small firm
The problem: Many firms reconcile the trust account like a checkbook — or not at all — instead of running the three-way reconciliation New York expects monthly. Small discrepancies compound silently, and an unreconciled account is the single biggest trust-compliance gap a firm can have.
The fix: Monthly three-way reconciliation — trust bank balance, firm trust ledger, and the sum of all client sub-ledgers reconciled to agree, with discrepancies resolved before the month closes.
Honest read: If you can't show a current three-way reconciliation, you're carrying the most common trust-discipline exposure there is.
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Commingling exposure
Earned vs. unearned fees blurred.
High impact · any firm taking retainers
The problem: A retainer is the client's money until it's earned — it belongs in the IOLA account and moves to operating only as you bill against it. Move it too early, or pay operating expenses from trust, and you've commingled, which New York treats as a serious violation even when accidental.
The fix: Clear separation of earned and unearned fees, with retainers held in trust and transferred to operating only as they're billed and earned.
Honest read: If client money ever touches your operating account before it's earned, that's the line bar auditors look for first.
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Audit & overdraft triggers
Incomplete records & stale balances.
Rising risk · growing matter volume
The problem: New York requires complete trust records kept seven years, prenumbered checks, and prompt disbursement of client funds. Missing records, old balances sitting in trust, or a single overdraft — which banks report to the bar automatically — can each trigger an inquiry where the presumption runs against you.
The fix: Complete, organized records with seven-year retention, an aging of client balances so nothing sits stale, and clean documentation ready if the bar ever asks.
Honest read: An IOLA overdraft, even for one day from a timing error, lands on the bar's desk before it lands on yours.
What TechBrot handles
New York law firm accounting, done by an expert.
Every engagement is scoped to your matters and trust activity, delivered in your own QuickBooks file by a named Certified ProAdvisor — coordinating with your CPA, who files.
02 · Client ledgers
Per-client trust sub-ledgers
A separate ledger for every client's trust funds, kept current and inviolate, with an aging report so nothing sits stale.
Bookkeeping →03 · Retainer handling
Earned vs. unearned fees
Retainers held in trust and moved to operating only as billed and earned — the discipline that keeps you clear of commingling.
Monthly bookkeeping →04 · Records & retention
Rule 1.15 recordkeeping
Complete trust records organized to New York's seven-year retention standard and ready if the bar ever requests them.
Cleanup →05 · Firm financials
Profit by practice area
Operating books kept clean alongside trust, with profitability by practice area or attorney where you want to see it.
Bookkeeping →06 · NYC & NY sales tax
Tax on taxable services
Legal services are generally not subject to NY sales tax, but where a firm has taxable items, we track them so the return reconciles.
Sales tax help →
Tools we work alongside
Connected to how you run the practice.
- QuickBooks Online
- Clio
- LeanLaw
- MyCase
- PracticePanther
- Smokeball
- LawPay
- Gusto
Using a different practice-management or trust platform? If it exports to QuickBooks, we can build the workflow around it. Ask on a discovery call.
How engagements work
From trust-account anxiety to audit-ready.
Every New York law-firm engagement follows the same four-phase rhythm — trust compliance first, clean operating books second, advisory third.
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Phase 1
Discovery
A 30-minute call to review your trust-account setup, practice-management software, matter volume, and where the books or reconciliations are falling behind. No pitch.
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Phase 2
Trust setup & cleanup
Configure client sub-ledgers and trust workflows, plus a cleanup to bring prior reconciliations current and resolve any stale balances or recordkeeping gaps.
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Phase 3
Monthly close & reconciliation
Monthly three-way IOLA reconciliation, retainer tracking, operating-book close, and an aging of client balances — documented for your review and approval.
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Phase 4
Reporting & advisory
Practice-area profitability and, as the firm grows, cash-flow and partner-compensation advisory.
Beyond the books
Clean trust accounting is the floor. Running a profitable firm is the point.
Once your IOLA account reconciles every month and your records are audit-ready, the question shifts from "are we compliant?" to "are we profitable?" Which practice areas actually earn after the work that goes into them, how realization and collection rates look, how partner compensation should track contribution, when cash flow can support another associate — the decisions that separate New York firms that grow from those that just stay busy.
That's where advisory comes in: a Certified ProAdvisor who knows your firm's numbers turning them into practice-area profitability, cash-flow forecasting, and partner-compensation analysis. Automation handles the data entry. We handle the judgment. As automation takes over routine entry, this judgment layer is where firms find their edge. Note that trust-account compliance always remains the attorney's professional responsibility.
Common questions
New York law firm accounting questions.
The attorney trust account. New York lawyers hold client funds — retainers, settlement proceeds, escrow — in an IOLA account (New York's version of IOLTA), and under Rule of Professional Conduct 1.15 those funds must be kept separate and inviolate, with complete records and prompt disbursement. The account is expected to be reconciled monthly using a three-way reconciliation. Mishandling client funds is one of the leading causes of attorney discipline in New York, which is why law-firm bookkeeping is built around the trust account first and everything else second.
Three-way reconciliation means three figures must all agree: the balance on your trust bank statement, the total of your firm's internal trust ledger, and the sum of every individual client's sub-ledger balance. If all three don't match, something is wrong and needs to be found before the month closes. In New York it's expected monthly as best practice, and a 2026 standard modeled on the ABA's Model Rule 1.15 — adopted by New York among other states — tightened the reconciliation deadline to 30 days and made three-way reconciliation and seven-year electronic retention explicit requirements. We perform it monthly and document it for your review.
The mechanical steps — recording transactions, preparing the three-way reconciliation, organizing records — can be delegated to a qualified bookkeeper or ProAdvisor. What cannot be delegated is responsibility: New York holds the attorney, not a software vendor or bookkeeper, accountable for trust-account compliance. So the right model is a Certified ProAdvisor who does the reconciliation work accurately and hands it to you to review and approve. We do exactly that — the work and the documentation — while you retain the professional responsibility the rules require.
A retainer is the client's money until you earn it, so it belongs in the IOLA trust account and moves to your operating account only as you bill against it. Commingling — mixing client and firm funds, or paying operating expenses out of trust — is one of the most frequently disciplined violations, even when accidental. We track earned versus unearned fees carefully, so retainers stay in trust until billed and transfers to operating are clean, documented, and tied to actual work performed.
New York requires attorney trust records to be kept for seven years — longer than the five years many states require. Records include bank statements, prenumbered canceled checks, duplicate deposit slips, client ledgers, and reconciliations. The 2026 standard also makes seven-year electronic retention explicit, so paper-only recordkeeping no longer suffices on its own. We keep your trust records complete, organized, and retained to that standard, so if the bar ever requests them they're ready.
Most banks have automatic overdraft-notification agreements with the bar, so if your IOLA account goes negative — even for a single day due to a timing error — the bank notifies the disciplinary authority and you can expect an inquiry, with the presumption running against you until you show it was a clerical error. The way to avoid this is disciplined process: never disburse against uncollected funds, reconcile monthly, and keep client sub-ledgers current. That's precisely the routine we maintain, which is what keeps timing errors from becoming a bar inquiry.
Monthly bookkeeping for a New York law firm runs $400–$2,500+ per month, fixed-fee against a written scope. Pricing is set by matter volume, how active your trust account is, the number of attorneys, and whether you need practice-area profitability reporting — a solo practitioner with light trust activity is at the lower end; a multi-attorney firm with heavy trust volume higher. We quote a firm number after reviewing your books.
Book a free discovery call. We review your QuickBooks file and trust setup remotely, look at how your IOLA reconciliation and client ledgers stand, determine whether you need a cleanup first or can go straight to monthly service, and send a written fixed-fee proposal within 3 business days. Your named Certified ProAdvisor begins as soon as you approve. We do the books; your CPA files, and trust compliance remains your professional responsibility.
Page review & standards
Reviewed by the TechBrot Certified ProAdvisor team.
Reviewed and maintained by the accounting team at TechBrot Inc., an independent Certified QuickBooks ProAdvisor firm serving New York law firms remotely. Pricing reflects TechBrot's New York engagement ranges; IOLA / Rule 1.15 trust-accounting references reflect rules current as of the date below and are reviewed periodically. TechBrot performs trust reconciliation and recordkeeping; the attorney retains professional responsibility for trust compliance, and your CPA files.
Reviewer
David Westgate · 40+ years operational accounting experience
Standards
Fixed-fee, written scope · Client retains QuickBooks ownership · Trust compliance remains the attorney's responsibility · No legal or tax-filing advice (out of scope) · No fabricated data
Last reviewed: June 2026
Make the trust account the part you never worry about.
Book a free books review. We'll look at your QuickBooks file and IOLA reconciliation, show you where compliance gaps are hiding, and send a written fixed-fee quote within 3 business days. No pitch.
TechBrot is an independent Certified QuickBooks ProAdvisor firm. We provide bookkeeping, QuickBooks, payroll, and advisory services and coordinate with your CPA or EA. We do not provide legal advice, file tax returns, or represent clients before tax authorities, and trust-account compliance remains the attorney's professional responsibility. QuickBooks is a registered trademark of Intuit Inc.; TechBrot is not affiliated with Intuit Inc.