How TrustBooks Eliminates the Trust Accounting Headache - Personal Injury Marketing Minute #7
In this podcast, Tom Boyle, Co-Founder of TrustBooks, discusses how TrustBooks helps not just Personal Injury Attorneys, but many other attorney types manage their trust accounts and meet State Bar compliance. TrustBooks also now offers full legal accounting. After years of positive feedback and requests, TrustBooks has now expanded to offer an accounting software with a 100% focus on law firms. See all episodes or subscribe to the Personal Injury Marketing Minute here: https://optimizemyfirm.com/podcasts/. Learn more about TrustBooks on their website here: https://trustbooks.com/. Transcript: Lindsey: Welcome to the Personal Injury Marketing Minute, where we quickly cover the hot topics in the legal marketing world. It’s remarkably easy for personal injury lawyers to be penalized or disbarred for mishandling settlement trusts. Fortunately, TrustBooks expanded their software with tools that are specifically designed to help attorneys streamline their trust management process. Joining us today is Tom Boyle, the co-founder of TrustBooks. Thank you so much for joining us today. Tom: Thanks, Lindsey. Happy to be here. How did TrustBooks Get Started? Lindsey: Well, you have recently received several accolades for developing the trust management and accounting software that’s specifically designed for the legal industry. Tell me a little bit about the software. What does it do? How is it different from other accounting softwares that are out there? Tom: Yeah, perfect. We started TrustBooks about six years ago, and we started it to basically solve a pain point that a lot of small law firms experience where the existing tools of QuickBooks and Excel and spreadsheets, they’re just not designed to help a lawyer with their trust bank account. And that’s what we started off to solve. Six years ago, we built TrustBooks to make it just super easy for a law firm to manage their trust account, meet state bar compliance. TrustBooks Now Offers Full Legal Accounting: And then as we’ve been working with our users over the past six years, the feedback we’ve been getting kind of overwhelmingly is, “Hey, we love TrustBooks. You all made this process super easy. The anxiety and fear around the trust account is relieved. We wish that you all existed for our operating bank accounts.” We’ve been hearing that enough, enough, enough that finally we said, “Okay, I think it’s time for us to expand and evolve to not just handle the trust bank account, but also handle the operating bank account.” For the past year and a half, it’s taken a while to build this out. But for the past year and a half, we’ve been working on making TrustBooks full legal accounting. We are now an accounting software with 100% focused on law firms, and it’s really that mentality to just make it easy. We kind of come at this approach of accounting doesn’t have to be hard. You don’t have to go use a real complex tool like QuickBooks. It’s built for all industries, all people, and can get lost in the weeds of trying to do it. If you’ve got the right tool, then this accounting process should be very, very simple and easy. And that’s what we launched. We launched full legal accounting about three or four weeks ago. We’re early into 2021, and knock on wood, everything’s been going really, really well so far. Trust Accounts and State Bar Compliance: Lindsey: Well, that’s fantastic. Congratulations on that new launch. I’m so glad that we were able to dive into that a little bit with you here. Tell me what makes legal accounting and trust management different from other industries? What specific pain points are you trying to solve? Tom: Yeah, good question. Within legal accounting, if you’re managing your firm operating account, which feeds into your firm financials like a balance sheet and a P&L statement, that’s pretty straightforward. Most law firms are cash based, especially the small law firms. Cash in is typically revenue, cash out is typically an expense, and that’s pretty straightforward. What gets a little tricky when it comes to law firms is around the trust account. With the trust bank account, there are specific rules and regulations that you’ve got to follow to meet state bar compliance. And this is one of those kind of domino areas that can get lawyers in trouble up to a potential disbarment. In North Carolina, for example, we’ve got stats that we can pull out and look at the bar journals, and it’s always the number one way attorneys get disbarred is this mismanagement of the trust account. As you kind of look at what does that entail, what does that mean to manage a trust bank account, what you’re trying to do is you’re trying to say, “All right, I’ve got a bank account. I’m holding money in this kind of fiduciary role, this fiduciary capacity on behalf of my clients or third parties. And within that role, I’ve got to make sure that all the money in, all the money out gets allocated on a client by client basis.” That’s what’s key is that this money in, money out, all gets assigned to clients. That at any given time, you need to know how much money you’ve got in your trust bank account on a client by client basis. And then at the month end, when you go to do a reconciliation, you can real quickly see, here’s all my client lists, here’s my balances. How does that reconcile back to my bank statement? And that’s an area where a lot of attorneys get in trouble. We call it a three-way trust reconciliation or a three-way reconciliation, where you reconcile your bank statement to your trust ledger, to the individual client and their balances, and you make sure that all three of those numbers match, so your bank statement, your trust ledger, and then the sum of your client balances. And within legal accounting, if you’re just trying to use kind of traditional accounting software, it’s that third piece that really fails attorneys. That getting to the client ledgers, making sure that you can show all your client balances, how that reconciles back to the bank statement, this kind of inability to deficit spend on a specific client balance, that’s where attorneys get into a lot of trouble if they’re using traditional accounting software, QuickBooks, Excel, doing it by hand. And that’s what we kind of tackle. That’s what we wanted to solve is, how do you build something from the ground up? It’s focused on this one pain point, so we can be laser focused. And since we are laser focused, we can make it really simple. We don’t have to do all these bells and whistles out of the gate. We went out six years ago to say, “We’re going to solve the trust accounting piece.” And by doing that, we were able to build it very, very easily, very simply, intuitive workflow built for attorneys. And ultimately, it gets them that client ledgers, those three-way reconciliations, all the things that they need to do to check off that compliance box with their state bar. Lindsey: I’m sure that when they see that all the numbers are aligning, it’s a huge anxiety off their shoulder. Tom: It’s a good feeling. Yeah, for sure. Lindsey: And especially managing all of the different moving pieces with different clients that I would imagine to be very, very helpful and not a tool that most software would incorporate. Tom: Well, I can tell you from doing this for six years, from talking to thousands and thousands of attorneys, accounting is like one of the least favorite things that they want to do. Trust accounting is even further on that list. The fact that they know that it’s kind of scary and overwhelming and anxiety that they could get disbarred if they mismanagement, that’s real prevalent. And then it’s dealing with accounting, which is… I don’t know. I’ve yet to find that attorney that went to law school because they wanted to do accounting. Usually those two don’t go hand in hand. Lindsey: Not so much. Lawyers went to law school because they want to be lawyers. Tom: That’s right. Lindsey: The accountants, they would have, I guess, gone to accounting school. Tom: Yeah, yeah, that’s me. Yep. Yep. We’re the nerds in the group. Is TrustBooks Just for Personal Injury Attorneys? Lindsey: That’s all right. Were there particular attorneys that you had in mind that this would benefit more than others? Tom: When we set out to build TrustBooks, our focus, and it tends to be our focus, is really the small law firm. It’s the firm that doesn’t have a lot of the extra resources to go hire or have in-house an accounting team. Maybe they’re trying to do it themselves. They’re trying to get some of their legal staff to do it. And again, it kind of gets into that mindset of, they don’t want to do accounting. They hate accounting. But yet, they’re running a small law firm, so they’ve got to do it. Within that kind of frame, we are really good with personal injury attorneys, with criminal defense attorneys, family law attorneys, immigration attorneys. It’s kind of all those law practices that skew typically towards the smaller practice. And we fit really well. Personal injury attorneys are a great fit for us. They’re even in a different class of… They don’t even like to do billable time, right? So they get away from trying to do any sort of billable time. The admin side, the accounting side is really outside of their wheelhouse typically, but yet they use their trust account. They use their trust account pretty often. Anytime a settlement comes in the door, that settlement is going to go right into the trust account. They’ve got to account for it. They’ve got to disperse against it. It’s definitely a need area. From my experience, the personal injury attorneys are the ones that probably hate accounting the most. Lindsey: Yes. From what I have heard, I would definitely agree. One of the other pain points that I’ve heard from some of the attorneys that we’ve worked with is just the complexity and needless pieces and functionality of other types of accounting software that doesn’t necessarily apply to them. And it just makes the user experience while they’re trying to navigate the accounting process all that much more challenging. Talk to me a little bit about your user interface, your user experience. How is that built to simplify the process if somebody going to be immediately intimidated when they open up the platform? Tom: Yeah. That’s one of the advantages we’ve got by focusing a product that’s built 100% for legal, and we make no qualms about it. We are built for legal. If somebody in another industry wants to use us, that’s fine. That’s great. But our focus is all on the legal, the law firm, the small law firm. By doing that, it allows us to build the same workflow that an attorney is used to seeing in their practice. It allows us to use the same terminology that they’re used to seeing in their practice. Other accounting software will talk in terms of let’s just say customers and employees. It’s all this stuff that’s not focused on accounting or trust accounting. For us, we want to say, “All right, you’re used to a client come in the door. We’re going to talk in terms of clients and matters. That’s how you set it up.” Money goes into a bank account. It’s a deposit. Money leaves a bank account. It’s a payment. It’s not trying to get into accounting terminology like debits and credits and journal entries and chart of accounts. It’s like, nope, we take all that out of the equation. You don’t need it. We’re going to talk in terms of clients and matters. We’re going to talk in terms of deposits, and we’re going to talk in terms of payments. And everybody can kind of get their arms around that. That’s one of the things that just out of the gate we do and it really builds this intuitive workflow. The support tickets we get typically are, how do I get from QuickBooks to a TrustBooks? It’s this onboarding. And it’s a challenge because this other product is not built to handle a trust account. But after that, it’s smooth sailing. They’re in the product. They just know how to navigate. It’s like pulling out an iPhone. You just know what to do. You don’t need a big instructional manual to tell you how to do it. And that’s been key for us. One of the reasons why is within the trust rules… And again, we’re in almost every state in the United States, in America. We’ve got international users. The neat thing is that each state has their own bar. They’ve got their own specific trust rules and regulations, but the rules are about the same from state to state to state. We’re able to build TrustBooks to help you accomplish meeting those state bar rules from state to state to state. And with that, you don’t have to go in and… I’ll give North Carolina as an example. There’s over a hundred page trust handbook on the rules around trust accounting. I mean, overwhelming out of the gate, right? I mean, where do you even start? There’s this hundred page guide on what to do around your trust account. If you’re trying to use something that’s not built for the trust account, you have to first go understand and learn that a hundred page trust handbook. Then you’ve got to go in depth on the software and figure out, all right, I’m using this software. How do I manipulate it to get it to work for trust account that is going to meet this a hundred page trust handbook? And that’s one of the things that we’ve helped to overcome is just to say, “Look, you don’t have to go learn the hundred page handbook. You do need some fundamentals, but you don’t need to go a hundred page handbook. Leave that up to the experts. And you don’t have to go learn the software and how to manipulate it, how to run reports that it’s not really designed to do to meet certain trust rules. It’s just boom. It’s automatic for you in TrustBooks.” That’s one of the advantages of us kind of being 100% focused on legal, on the trust account. Reconciliation and Reporting: That makes it sound so simple and helpful. You talked a little bit about reporting. What kind of reporting capability does TrustBooks have? Yeah. It’s all going to be kind of legal focused. I’ll give you a couple of examples. Big one is the three-way reconciliation. I talked about it earlier. But I think almost every state… Maybe Georgia doesn’t have this as a specific requirement, but every other state has this three-way reconciliation requirement. And to get this in a different product, again, it’s manipulating. It’s trying to pull it in a bunch of different areas. With us, you go through and do a reconciliation, which is straightforward. You hit reconcile, and boom, you’ll automatically get a three-way reconciliation. There’s literally no extra steps. That’s one of the really neat things that our users love is that with just doing reconciliation, which is a normal kind of month end process, I hit save and I’m going to get the right reports that I need. A couple of others is we’ve got a month end report section. And within that month end report section, we’ve got a handful of predefined reports that get generated at the end of each month. The mindset there is we wanted this to be that easy button for attorneys to look at. It’s accounting. Again, it goes back to this attorneys hate accounting. If you’re going to force them into trying to figure out what the heck to review at month end, you’ve lost them. This is their place that they can go into the product. At the end of each month, they can kind of go down the list. There’s four reports, plus the reconciliations. And if I’m an attorney and I’m responsible for my trust account, I can literally just go to this PDF, go to that PDF, go to that PDF. And about 10 minutes, I feel really, really good on what’s going on in my trust account. I’ve got that confidence that, yep, I looked at all I needed to. I’ve got the reconciliations. Boom. Easy peasy. The last set of reports goes into kind of the full legal accounting side. I think we built this a lot with the personal injury attorney in mind, where you can go… We’ve got what’s called a view matter list. You can go on this view matter list page. You can see all of your clients. You can click on a client. And what’s neat about that view is you can run a trust ledger. You can see right there on the screen a trust ledger, so all activity in and out of the trust bank account for that one client. You can also click over on another tab and see everything that’s gone in and out of your operating account. For example, like a personal injury attorney that will often do a lot of kind of client cost advances out of their operating account, and they might be paying expert witnesses, they might be paying for medical records requests, all that stuff, you can just go right to this client view. You can look at the trust ledger. You can look at what’s gone in and out of your operating account. And it’s all right there in one really simple and easy to see screen. Integrating with Clio and LawPay: Lindsey: What is next on the TrustBooks horizon? You mentioned the operating system that just came out within the past few weeks. What is that looking like? What do you guys have planned for the rest of 2021? Tom: We’ve been putting… We’ve been really gearing up to launch this full legal accounting. That was the kind of starting point for us to do a lot of other neat and fun things within the product. We’ve got that launched. That was a huge win. That was kind of the next step. So now, as we look forward to the rest of the 2021, we’re trying to go and just beefing up some of our integrations. We integrate right now with Clio. We integrate with LawPay. We’re going into this next phase of 2021 with improving a lot of the things that we can do around LawPay. We’re also going to add in some other practice management software integrations. So we want to be that accounting software, that legal accounting software, that can kind of play nicely with a lot of practice management and be that alternative to QuickBooks. That’s really the focus is, how do we add more integrations over this next year? We also want to improve… Right now we do an online bank feed. We already have the ability to connect to your bank, pull in all your bank activity. Again, how do you spend as little time as possible around your accounting. Everything we do, it’s like, all right, will this save our users more time? We already allow our users to integrate with their bank, pull in their bank information. We want to improve that so that we can build in some memorized transactions, some automatic bank feeds and automatic reconciliations, all with the mindset of how do we let our users spend as little time as possible on accounting, because that’s a win for us. That’s kind of on the horizon and we’re excited. We’ve got a lot of big plans of just kind of keep improving the product, add more integrations, and make it as seamless and as smooth as possible on the accounting side. Lindsey: That sounds absolutely fantastic, the product that is designed to be used as little as possible. Tom: Counterintuitive, right? That’s all right. Lindsey: But you know what? If it works, it works. That’s great. It sounds like a great 2021 ahead of you. Where can attorneys go to learn more about TrustBooks? Tom: Yeah. Our website is a great first step resource. It’s trustbooks.com. Anybody that wants to get ahold of us, just go to trustbooks.com. Our process, we love talking with attorneys and with law firms. We encourage that kind of out of the gate. We do free one-on-one onboardings. So if anybody wants to, go to schedule.trustbooks.com. You can also go to the website and pull up our scheduling link and just schedule whatever time works best for you. But that’s a great way to spend 20, 30 minutes with us. See if we’re a good fit, have some Q and A with us. Again, the product is simple, so our demo calls don’t need to last an hour. An onboarding process doesn’t take weeks. We can get everybody up and running pretty quickly. We’re happy and would love to spend a little bit of time on the front end having those conversations, especially around the trust account. There is so much anxiety and fear, that having that one-on-one rapport and conversation helps just let you know, hey, this is an easy process. I don’t need to be scared about it. Lindsey: Well, thank you so much, Tom. It has been a pleasure chatting with you today. And I know that I have learned a lot about a product that I’m sure will help so many of our clients, as well as many, many legal professionals listening in. Thank you so much for your time, and I hope you have a great day. Tom: This was great. Thank you so much for the invitation. I enjoyed it.