Law Firms Edition

Everything a small practice needs to keep client money clean: matters opened behind a recorded conflict search, retainers held in a properly flagged IOLTA account, earned fees drawn to operating with the client notified automatically, and a three-way reconciliation you can hand straight to a bar auditor.

Enabling the Edition

Law Firms ships with Pro and every higher tier at no extra cost. It's switched on by your license — when your tier includes it, ⚖️ Law Firm shows up in the app's left sidebar on its own.

On Starter and it's missing? Upgrade under Settings → License Management.

Flagging Your IOLTA Account

Client funds — retainers, settlement money, escrow — live in an IOLTA bank account that is legally not yours. Kantivo models that reality instead of leaving it to memory:

1. Add the bank account in Chart of Accounts (account type: Bank) to mirror the real IOLTA account at your bank.
2. Go to ⚖️ Law Firm → Trust Account → Set Up Trust Account.
3. Select the account, give it your bar's state code (CA, NY, TX, …) and, if you like, the last few digits of the account number.
4. Hit Flag as Trust Account.

Kantivo then creates and links a matching "Funds Held in Trust" liability automatically. Deposits raise the bank balance and the liability in lockstep, so the balance sheet always reads correctly: that money belongs to clients, and the firm's equity doesn't move.

Running Conflict Searches

Clicking + New Matter doesn't open a form — it opens a search box. That's deliberate: the conflict check comes first.

1. Search the would-be client, the opposing party, or their counsel.
2. Kantivo sweeps your client list, each client's recorded related parties, every matter name, and the opposing parties and counsel logged on prior matters.
3. Look over the hits, jot a clearance note, and choose clear & continue or conflict found — record & stop.

The search itself becomes a permanent record — query, results, who ran it, the decision and why. That stored trail is your documented conflict procedure when the bar asks for one.

Tip: log related parties (spouses, affiliated entities, co-parties) on the client record so future searches catch them by name.

Matters

Time, invoices, costs, and trust money all attach to a matter. The form captures the client, a name like "Smith v. Jones," and a matter number — leave the number blank and Kantivo issues the next one in a yearly sequence (2026-0001 and counting), or type your firm's own scheme.

Lifecycle states are prospective, active, on hold, closed, settled, and withdrawn, each change logged with author and timestamp. One hard rule: a matter still holding trust money can't be withdrawn until the balance is refunded or transferred.

How Matters Bill

• Hourly — entries priced off the rate tables below.
• Flat fee — one fixed amount, set when the matter opens.
• Contingency — a recovery percentage, also set up front.
• Hybrid — discounted hourly plus a contingency kicker.
• Pro bono — hours tracked, nothing billed.

Rate Tables

Under ⚖️ Law Firm → Billing Rates, give every timekeeper an hourly rate with a start date. Raising rates in January? Add a new row — Kantivo closes the previous rate the day before, and old time entries keep the price that applied when the work happened.

When a time entry lands on a matter, the rate resolves in this order: a rate typed directly on the entry, then the matter's own override, then the timekeeper's rate in force on that date.

Per-Client Trust Ledgers

The single most important question in trust accounting is "whose money is in this account?" Kantivo answers it continuously with a per-client ledger inside the trust account — every deposit, transfer, disbursement, and refund with a running balance per client.

Ledger entries are write-once. There is no edit and no delete; the only correction is a void, which strikes through the original (still visible) and records why. Auditors call this an intact audit trail — Kantivo just calls it the only way the ledger works.

View any client's ledger from the Trust Account tab (ledger link), or print the full statement with the Trust Ledger by Client report.

Holding Level: Client or Matter

Some practices pool one trust balance per client; others wall off funds case by case. Kantivo does both:

• Skip the Matter field on a deposit → the balance is held at client level across all their matters (the default).
• Pick a matter → that money is tracked per matter, and outflows are checked against that matter's balance specifically.

Either satisfies the bar — follow whatever your engagement letter promises, and feel free to mix.

Retainer Deposits

Client retainer arrives? Trust Account → 💰 Deposit: choose the client (and matter if you segregate), enter the amount, date, where the funds came from, and a memo. One click posts the bank increase, the matching liability increase, and the client's ledger entry together — no manual journal entry, no chance of recording one side and forgetting the other.

Time, WIP, and Invoicing

Add time from the matter page (+ Time) or the regular Time Tracking screen. Entries tied to a matter automatically take the matter's client and the correct rate.

Unbilled hours pile up as work in progress. To turn WIP into a bill, open the matter and click 🧾 Bill WIP — every unbilled entry becomes its own invoice line (date, timekeeper, narrative, hours), unbilled matter costs come along too, and the result is a draft you review in the standard invoice editor before anything goes out.

The WIP by Matter report ages unbilled value in 0–30 / 31–60 / 61–90 / 90+ day buckets, so revenue sitting on the table is visible before it goes stale.

Trust-to-Operating Transfers

Fees earned, invoice issued — now collect from the retainer:

1. Trust Account → 📤 Pay Invoice from Trust.
2. Choose the client; the invoice list shows only that client's unpaid invoices. There is no way to point the transfer at someone else's bill — that's the anti-commingling rule, built into the picker itself.
3. The amount defaults to whichever is smaller: the invoice balance or the client's available trust funds.
4. Select the operating account and how you'll deliver the client's notice, then confirm.

Four postings happen as one unit: trust liability released, cash moved IOLTA → operating, payment applied to the invoice, ledger entry written. And if the transfer would take the client below zero, the whole operation is refused — even if other clients' money makes the bank balance look sufficient.

Withdrawal Notices

NY, CA, TX, and several other bars require telling the client whenever their trust money moves into the firm's operating account. Kantivo produces that notice automatically with every transfer — a PDF naming the client, matter, date, amount, and the invoice it settled.

You're offered the PDF right after the transfer, and it can be regenerated any time from the notice link on the ledger row. The delivery method you chose (email, mail, portal, in person) is stored with the entry.

Paying Third Parties & Refunds

Disbursements

🧾 Disburse pays a court clerk, expert, or settlement payee straight from a client's trust funds — with the payee, check number, and the same can't-go-below-zero check. Manager or admin role required.

Refunds

When a matter wraps with money left over, ↩️ Refund sends the remainder back to the client and brings their ledger to zero — do this before closing the matter.

Client Costs & Markup

Costs the firm fronts for a client split into two buckets with different billing treatment. Hard costs go to third parties — the court clerk, the expert, the reporter — and reach the client's invoice at exactly what you paid. Soft costs are internal (copies, postage) and typically carry a markup; set the firm-wide default percentage under Billing Rates → Firm Settings, or override it per cost.

To capture one: record the vendor bill normally, then hit 💵 Tag Cost on the matter, pick the bill, and classify it. The matter's Costs Advanced table shows each cost with its effective markup and what the client will be charged, and the next Bill WIP brings every unbilled cost onto the draft invoice — vendor and bill number named on the line, so the client sees exactly what they're reimbursing.

Settling Contingency Cases

On a contingency or hybrid matter, the 🤝 Settlement button opens the distribution worksheet. Enter the gross recovery; Kantivo pre-fills the cost reimbursement from the matter's unbilled hard costs, applies the matter's contingency percentage to what remains, and shows the client's net live. Every figure is editable — settlements get negotiated, and the record should match the deal, not a formula.

Saving the worksheet produces the settlement statement PDF with the full waterfall and signature lines for client and attorney. Money then moves in two deliberate steps:

1. The settlement check is deposited into trust for the client (standard 💰 Deposit).
2. Distribute fires one atomic journal: contingency fee to Legal Fees income, cost reimbursement against Client Costs Advanced, the firm's combined share to operating, and the client's net out of trust — checked against the client's trust balance like every other outflow. Kantivo refuses to distribute before the deposit exists, and refuses to distribute the same recovery twice.

One more guard: hard costs the settlement reimbursed are flagged non-billable automatically, so they can't show up on a future invoice.

Correcting Mistakes

Hit void on the bad ledger entry and give a reason (mandatory — it's stored forever beside the original). Kantivo posts a reversing journal entry, and if the voided entry had paid an invoice from trust, that payment is rolled back too.

Order matters: a deposit that later activity has drawn against can't be voided until the later entries are dealt with first. The ledger unwinds last-in, first-out.

The Three-Way Rec

Trust compliance lives or dies on three numbers agreeing:

1. The bank statement, adjusted for deposits in transit and outstanding checks.
2. The IOLTA balance in your general ledger.
3. The total of all client ledgers combined.

On ⚖️ Law Firm → Three-Way Rec, type the statement figures; Kantivo calculates the other two sides itself and shows BALANCED or OUT OF BALANCE live as you type. The verdict is computed on the server — never self-declared — and saving an out-of-balance rec requires a written variance explanation, because a quiet discrepancy is precisely what gets firms in trouble.

Each run is kept permanently with the reconciler's name and timestamp, and partners can add a recorded sign-off.

Deadline Watchlist

Record the statute-of-limitations date when opening a litigation matter (or add it later). Anything inside 90 days gets a red ⏰ on the matter list, and the SOL Watchlist report pulls every matter due within 30/60/90 days alongside its responsible attorney — quick insurance against the most expensive calendar mistake in law.

More Than One State

Offices in two states usually means two IOLTA accounts, one per bar. Flag each as its own trust account with its own state code — ledgers, balances, and reconciliations remain entirely separate, and you switch between them with the account picker.