Every once in a while I come into contact with hands on lawyers, who are very knowledgeable of bookkeeping procedures. The reason they are calling me is because their previous bookkeeper left, or they have been struggling to do the work themselves, and things are not balancing.
With deference to the LSUC, Leslie Lawyer has been in practice for 15 years, and opened her own firm 5 years ago. The rate she bills out at is $350 per hour. She has an intimate knowledge of all of her clients and matters. This is to be expected; after all, it is her business we are talking about. She has a good understanding of basic bookkeeping, including bank reconciliations. Her working knowledge of PCLaw is limited to the minimal on-the-job training she received to complete daily tasks. She has received no extra training, and has no advanced knowledge of error correction procedures. She has not been able to balance her books, but if she set aside the time, she could probably work through all of the problems. She does not know how to correct the errors, but could do some work-around adjusting entries to balance. The work-arounds’ may not be to LSUC standards, and even with her intimate knowledge of individual matters, it will still take her 30 hours to finish this project.
Bobbie Bookkeeper is a self-employed bookkeeper who works for many different lawyers. She charges $35 per hour. She has received extra PCLaw training, and has advanced knowledge of error correction procedures. She has no knowledge of Leslie’s clients or the individual matters. She will need to ask lots of questions to gain the required information, but these could be directed to a member of Leslie’s staff. She has reviewed the status of Leslie’s books and advised that properly removing the past 5 years’ of errors and balancing the books to LSUC standards could take up to 100 hours of her time.
How much money does Leslie lose by doing the work herself?
As always, I invite your comments and suggestions for future post topics. Next Week – PCLaw and Work-In-Progress Disbursements From Trust.