Month-End Close SOP Template for Legal Teams
Free month-end close SOP for law firms. Covers trust reconciliation, billing review, and financial reporting procedures.
Purpose
Close the books at the end of each month so that billing is accurate, trust accounts are reconciled, and financial reports are ready for the managing partner within 5 business days. Firms that skip the monthly close end up scrambling at year-end, discovering trust account discrepancies months after they occurred.
Scope
Covers time entry finalization, invoice generation, trust account reconciliation, accounts receivable review, and financial reporting. Does not cover annual tax preparation or partner distribution calculations.
Prerequisites
- Clio billing module configured with current hourly rates and matter billing preferences
- Bank statements available for all firm operating and trust accounts
- All attorneys notified of the time entry deadline (3 business days before month-end)
- Prior month's reconciliation completed and filed
Roles & Responsibilities
Bookkeeper / Controller
- Finalize all time entries and generate pre-bills in Clio
- Reconcile trust and operating accounts against bank statements
- Prepare the monthly financial summary for the managing partner
Office Manager
- Chase outstanding time entries from attorneys before the deadline
- Review pre-bills for billing guideline compliance on major client matters
- Distribute finalized invoices to clients
Managing Partner
- Review and approve the monthly financial summary
- Approve write-offs exceeding the firm's threshold
- Sign off on the trust account reconciliation
Procedure
Five business days before month-end, email all attorneys and paralegals a reminder that time entries must be finalized by the 28th (or the last business day). Include a list of anyone with unbilled time exceeding 5 hours. Follow up individually with anyone who hasn't entered time by 2 days before the deadline.
Completion Checklist
Key Performance Indicators
Close completion time
Within 5 business days of month-end
Trust account reconciliation discrepancies
Zero unresolved discrepancies
Attorney time entry compliance
95% of attorneys submit by deadline
AR over 90 days as percentage of total
Under 15%
Why This Matters for Legal
For law firms, month-end close isn't just about knowing how much money came in. The trust account reconciliation is an ethical obligation — bar associations require it, and auditors check it. Firms that skip monthly reconciliation and catch up quarterly or annually often discover discrepancies that have compounded for months, making them much harder to investigate and explain. The billing side matters too: attorneys who don't enter time promptly lose 10-15% of billable hours to memory fade, which directly reduces firm revenue.
Common Mistakes
- ×Skipping the trust account reconciliation in months with no trust activity — auditors want to see reconciliation documentation every month regardless
- ×Allowing attorneys to submit time entries after the billing period is locked without documented approval, creating audit trail gaps
- ×Not checking invoices against outside counsel billing guidelines before sending, resulting in rejected invoices and delayed payment
- ×Treating month-end close as the bookkeeper's job alone — attorneys must review pre-bills and approve invoices with their name on them
- ×Not reviewing AR aging monthly, allowing receivables to grow stale until they become uncollectable
Legal-Specific Notes
The trust account reconciliation is the most scrutinized element of law firm month-end close. State bar rules require a three-way reconciliation: the bank statement balance must match the book balance in Clio, which must match the sum of all individual client trust balances. A single unexplained discrepancy — even $0.01 — must be investigated and documented. For firms with e-billing clients, LEDES file formatting requirements vary by client and legal billing platform. Submission deadlines are often rigid: miss the window and you wait another month to bill.
Frequently Asked Questions
Learn More About Month-End Close
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