Software solutions: counting the cost of using a specialist legal accounts package

One question that is frequently asked by solicitors shopping around for either an accounts or practice management system the first time is: why should we pay so much money for specialist legal software when we can apparently buy a general purpose accounts package for a fraction of the price?

It may seem an attractive option, providing you can live with customer and job numbers rather than client and matter number references.

But realistically it is a non-runner - and may well prove to be a false economy - because of the accounting rules and related financial regulations and procedures with which law firms must comply nowadays.

For example, you must comply with the Solicitors Accounts Rules, which means you must maintain separate office and client accounts.

If you hold client monies - and almost all firms do - you must follow the deposit interest rules and the complicated way they apportion interest.

If you undertake publicly funded work, you must comply with the Legal Services Commission's (LSC) billing procedures, including the special claims forms, the legal aid franchise quality assurance standard (LAFQAS) management rules, the way VAT is handled and, in a development we are likely to hear more of in the months to come, the various e-commerce/on-line billing and payment initiatives the LSC is developing.

If you buy a legal accounts package from a specialist legal systems supplier, not only will all these features be present from the outset, but your annual software maintenance and support agreement will ensure that whenever any of these rules are amended, the changes will automatically be incorporated within the software.

This is because suppliers, both individually and through organisations, such as the Legal Software Suppliers Association maintain an ongoing dialogue with the Law Society and the LSC.

However, if you opt for a general purpose accounts package, you may get a cheaper product and perhaps even slicker-looking ledgers, but you will not get any of the legal practice-specific features you must have if you are to comply with the likes of the Solicitors Accounts Rules.

Theoretically, this is not an insurmountable problem, providing your legal cashiers, bookkeepers and auditors can produce all the missing reports and data either manually or on spreadsheets.

But, and this is a big 'but', the additional money you will be spending each year on staff wages and accountancy fees to produce this extra information is likely far to outweigh any savings you may have made by not buying dedicated legal accounts software in the first place.

Charles Christian is an independent adviser to the Law Society's software solutions guide