A small law firm in Washington should expect three things from a bookkeeper: operating books that close every month, B&O tax filed on time, and a clear line between client money and firm money. Outside bookkeeping with tax and payroll support typically costs $750 to $2,000 a month as of 2026. Most of that range comes down to how many transactions you have and how many people you pay.

The rest of this is how to tell a bookkeeper who understands a law practice from one who has never seen a retainer.

What does bookkeeping for a law firm actually include?

The firm's own money: fees you have earned, rent, payroll, software, malpractice insurance, bar dues, and the owners' draws or salary. Done monthly, that gives you a profit and loss statement you can read and a balance sheet that ties to the bank. It also gives your tax return something to stand on in March instead of a shoebox in February.

Client trust money is a different animal. The question comes up early with any attorney, so here is the plain version: the duty to safeguard client funds belongs to the lawyer, under the Washington bar's professional conduct rules, and it does not move to a bookkeeper because you pay one. We do not run your client ledgers. Many firms keep those inside legal practice management software, with a lawyer or a trained staff member owning the reconciliation, and I think that is the right place for them.

What we do care about is what leaks from the trust account into the operating books, because that is where the financial statements go wrong.

Why do retainers confuse the books?

You collect $5,000 from a new client. If it was an advance on fees, it belongs in the trust account until you earn it, and your income statement should not show it as revenue on day one. When you bill against it and move $1,800 to the operating account, that $1,800 is revenue. The other $3,200 is still the client's.

A bookkeeper who records the whole $5,000 as income gives you a good-looking month that is not real. It is an easy mistake to make, and untangling which deposits were earned can take a while if your books have not been touched in months.

Ask any bookkeeper you are considering how they treat a retainer deposit. If the answer takes more than two sentences, or starts with "it depends on the software," keep looking.

How is a Washington law firm taxed?

Washington taxes businesses through the B&O tax, a gross receipts tax with no deduction for labor, materials, taxes, or other costs of doing business. Which classification and rate apply to your firm is something to confirm with the Department of Revenue or with us, and you should read their published rates rather than trust a number in a blog post (including this one).

Cities can add their own B&O, and whether yours does depends on where the office sits. Check that with the city or with us.

A bookkeeper new to Washington is the likeliest person to get this wrong. Late filings cost money, and I would rather you pay $750 a month than find out from a notice.

What does it cost, and what raises the price?

As of 2026, our package starts at $750 a month and typical clients land between $750 and $2,000, depending on volume. The package covers monthly bookkeeping, payroll, and tax work, with a monthly consultation. Onboarding is 2 times the monthly fee, add-ons start at $75 a month (accounts payable starts at $250), and hourly consulting is $300 an hour. The pricing page has all of it: caroandassociates.com/pricing.

Four things move you up the range:

  • More bank and card transactions each month
  • Payroll for more than a handful of people
  • Books that have to be cleaned up before the work starts
  • Multiple owners with different pay arrangements, which gets messy fast

Two things hold it down. One bank account for operating money, and a lawyer who sends receipts instead of describing them.

When is a cheaper option fine?

If you are a solo attorney with under about $500,000 in revenue, a part-time bookkeeper or a good accounting app plus a tax preparer once a year is probably enough. We have written about when DIY apps work and when they stop, and the honest answer for a lot of solo practices is that you are not our client yet.

An in-house bookkeeper also wins if you have heavy daily volume and want someone at the front desk who can handle the trust account paperwork alongside the books. That is a real advantage we cannot match from Federal Way over video.

Who is not a good fit for us?

You should look elsewhere if:

  • You want an annual tax return and nothing during the year.
  • You want a firm to take over your client trust ledgers.
  • You run several entities or a firm with a full back office.
  • You want advisory bolted onto someone else's books.

Our sweet spot is a firm between $500,000 and $10 million in revenue with fewer than 50 people, where the owners want real numbers each month and a person who answers the phone.

How do you pick a bookkeeper for your firm?

Ask five questions on the first call. How do you record a retainer? Who owns the trust account reconciliation? How do you handle B&O? When do I get the monthly financials? And what does it cost when my books are a mess?

The B&O side matters for any Washington service business, and we cover the common mistakes in our B&O article. For the wider picture of how we work with professional practices, see our page for professional services. If the fit looks right, the next step is the pricing page, and you can call us at (206) 497-0671 with questions.

Questions owners ask about this

Who does bookkeeping for small law firms in Washington State?

Options include a part-time in-house bookkeeper, a bookkeeper who specializes in legal practices, software you run yourself, and an outside accounting firm like ours. We work with Washington service businesses, including law practices, and our package starts at $750 a month. Which one fits depends on your revenue, how many people you pay, and how much of the trust account work you want to hand off.

How much does bookkeeping for a small law firm cost in Washington?

As of 2026, outside bookkeeping with tax and payroll support typically runs $750 to $2,000 a month for a firm with a few lawyers and staff. A solo practitioner with low volume can often spend less with a part-time bookkeeper. Onboarding at our firm is 2 times the monthly fee, and add-ons start at $75 a month.

Can my bookkeeper touch the client trust account?

That is a question for you and your bar's rules, since the lawyer carries the duty over client funds. Many firms keep trust ledgers inside legal practice management software and have the lawyer or a trained staff member own the reconciliation. We keep to the firm's own operating books, and we are glad to talk through where the line sits for your setup.

How should a law firm book retainers?

An advance fee deposit usually sits in the trust account until the work is done and the fee is earned. Only then does it move to the operating account and count as firm revenue. Your bookkeeper needs to know the difference, or your financials will show income you have not earned yet.

Does a law firm pay Washington B&O tax?

Washington taxes businesses on gross receipts through the B&O tax, and the Department of Revenue publishes the classifications and current rates. Which one applies to your firm, and whether your city adds its own B&O, is worth confirming before your first filing. We handle the filings as part of the package.