6 Bookkeeping Controls Every Growing Law Firm Needs Before Adding a Third Associate

Sam's List Editorial | 2026-06-06

6 Bookkeeping Controls Every Growing Law Firm Needs Before Adding a Third Associate The jump from two attorneys to three isn't a headcount change. It's an operational inflection point. At two attorneys, you can watch everything. Billing disputes get caught in conversation. Trust account errors are noticed before they compound. Revenue patterns are visible because there are only two people creating them. Add a third attorney — with their own client relationships, billing habits, and access to firm accounts — and the informal controls that worked stop working. Bar associations know this. ABA Model Rules 1.15 and 5.3 don't get more flexible as firms grow. They get more urgent. A managing partner who can supervise two associates closely can't supervise three the same way without systems. And the financial consequences of inadequate supervision at a law firm aren't just operational — they're disciplinary. Here are six bookkeeping controls to install before you bring on that third attorney. 1. Separate the Person Who Records Transactions From the Person Who Reconciles Accounts In most 2-3 person law firms, the same person does both: records the transactions and reconciles the bank statements. That's a control failure by any accounting standard — and in a law firm with a trust account, it's a meaningful risk. The minimum viable control is a bookkeeper who owns transaction recording and a managing partner who reviews monthly reconciliations. You don't need to hire a full-time controller. A part-time or outsourced legal bookkeeper handles the recording; you spend 30 minutes a month reviewing the reconciliation package they produce. What you're looking for: any transaction that doesn't match a client matter, any trust account movement without a corresponding disbursement authorization, any variance between the bank statement and the GL. The review doesn't require accounting expertise. It requires a managing partner who actually looks at the numbers. 2. A Documented Trust Account Handling Policy That Every Attorney and Staff Member Signs Verbal procedures don't survive bar audits. They also don't protect the managing partner when an associate makes an error that the partner claims was against firm policy — because without a signed document, there's no evidence the policy existed. ABA Model Rule 1.15 requires proper safekeeping of client property. Model Rule 5.3 requires that supervising attorneys take reasonable measures to ensure subordinates comply with professional conduct rules. A written trust account policy — covering how funds are received, when they're...