Accountant for legal services

Lawyer, notary, or firm manager, you know that accounting for a legal practice in Quebec leaves no room for error. Client payments are held in escrow, with separate records, monthly reconciliations, and an annual report required by the Barreau du Québec or the Chambre des notaires. In addition, you must track ongoing work on a case-by-case basis, distinguish between reimbursed disbursements and firm expenses, and manage reserves without ever mixing client funds with practice funds.

Since the end of invoice-based accounting, work in progress is now considered taxable income: your accountant needs to know how to value it correctly. Add to that the VAT on fees, the choice of business structure (sole trader, limited liability company, or limited company authorized by your professional body), and the payroll for support staff, and the need for an accountant familiar with legal practice becomes clear. We'll introduce you to the right accountant for this sector, as many times as you need, free of charge, and we'll be there to support you every step of the way. No obligation.

• Keep the escrow accounts flawlessly: separate registers per client, monthly reconciliations and no outflow of funds before fees are invoiced.
• Include work in progress in taxable income since the elimination of invoice-based accounting, valued at the lesser of cost and fair market value.
• Tracking profitability per case: hourly rates, flat fees and conditional mandates are not managed in the same way.
• Distinguish between expenses incurred as an agent (often without VAT) and taxable expenses that are recharged: court stamps, bailiffs, expert witnesses.
• Managing cash flow dependent on settled cases: drawn-out disputes, fixed-rate legal aid mandates, long customer accounts and provisions for doubtful debts.
• Choosing the right business structure: sole trader, SENCRL or public limited company, with different tax and protection impacts.
• In Quebec, aiming for approximately 5,500 paid hours per year to fully benefit from the small business deduction is a real challenge for small incorporated firms.

• Separate maintenance of trust accounts, monthly reconciliations and annual trust accounting report required by the Barreau du Québec or the Chambre des notaires.
• VAT registration (9.975%) from €30,000 of taxable supplies, and collection on fees; the fast method is not available for legal professionals.
• VAT treatment of disbursements according to their nature: disbursements incurred as agent of the client are not taxable, disbursements specific to the firm are taxable.
• T2 and CO-17 returns for the public limited company, T1/TP-1 with profit and loss statement (T2125) for the self-employed worker, and information return (T5013 and statement 15) for several SENCRLs.
• Source deductions (DAS) on support staff: taxes, RRQ, RQAP, FSS and CNESST, with T4 and RL-1 slips to be produced each year.
• Inclusion of work in progress in the calculation of income (end of exclusion for designated professionals) and rigorous monitoring of provisions received from clients.
• Retention of accounting records and supporting documents for 6 years (CRA and Revenu Québec), in addition to the records required by your professional order.

Are you familiar with the rules governing escrow accounts? Yes. Several accountants in the Bankeo network support lawyers and notaries: separate maintenance of trust accounts, monthly reconciliations, and preparation of the annual report required by the Barreau du Québec or the Chambre des notaires. Specify your professional order and practice management software in your request: we will match you with an audited accountant who is already familiar with these requirements.

Are my firm's ongoing projects taxable? Yes. Since the elimination of billing-based accounting, legal professionals include their ongoing projects in their taxable income, valued at the lower of cost and fair market value. An accountant specializing in this sector will track each case, document the valuation, and keep billing, provisions, and disbursements in order. We can introduce you to the right accountant for this sector, free of charge.

How much does an accountant cost in this sector? According to the Bankeo Barometer , based on 1,248 real-world cases (2024-2026), the median cost for this sector is around $1,500 per year. The cost varies depending on whether you are an incorporated company or a self-employed individual, as well as the volume and complexity of your work. Bankeo matching is free: you pay your accountant directly.

How can I switch accountants for my law firm without the stress? We'll handle it for you. You describe your practice (trust, management software, practice structure) and we'll introduce you to an audited accountant who already understands these requirements. The transition is seamless: transfer of books, reconciliations, and tax files, without any interruption to your professional obligations. The matching process is free, and we remain by your side even after the switch.

Local or remote accountant for a legal practice? Both work very well. Accounts for escrow accounts, invoicing, and annual reports are now managed remotely with secure cloud tools. What matters is that your accountant is proficient in the rules of the Barreau du Québec or the Chambre des notaires: we match you first based on this expertise, and near your location if that's your preference.

Can I pay my fees into the escrow account? Only once the fees have been invoiced to the client, never before. The funds in escrow belong to your clients until the work is invoiced, and every withdrawal must be documented and reconciled. A chartered accountant familiar with legal practice will implement a billing and withdrawal procedure that complies with your professional order's rules and ensures your annual report is impeccable.