Legal
Books and taxes for personal injury law firms.
Contingency settlements, medical liens that shrink the payout, referral fees, and case costs advanced for a year or more. Gus sorts it, an accountant checks every transaction, and you get one number a month.
- From $197 a month
- An accountant on every transaction
- Cancel whenever
December came in at $18,000. The Nguyen settlement finally cleared, and I booked the hospital lien and the referring attorney's fee as their own lines, so what's left is what the firm actually kept.
- Nguyen settlement payoutContingency fee
- Ferrante referral feeReferral fees received
- Meridian Court ReportingCase costs
- Precision ForensicsExpert witness
- ChartRequest.comMedical records
Why your books are different
Personal injury books go wrong in the same few places.
A generalist sees a big deposit and calls it a good month. Your business is settlements that take a year to land, costs fronted long before anyone knows if a case wins, and a check that is really three different pots of money in one deposit.
-
1
A settlement check is three checks in one
A single settlement deposit usually contains the firm's fee, reimbursement for costs the firm advanced, and the client's own share, all in one wire. Booked as pure income, the month looks far bigger than what the firm actually earned.
What we doSplits the deposit into the firm's fee, the cost reimbursement, and the client's pass-through amount, so only what the firm kept shows up as income. -
2
Medical liens shrink the payout after the deal is set
A hospital lien or a health insurer's subrogation claim often gets paid out of the settlement before the firm or the client sees a dime, so the number in the bank is smaller than the number in the settlement agreement.
What we doBooks what actually lands after the lien is paid, not the headline settlement figure, so the month reflects real cash. -
3
Case costs sit unpaid for a year or more
Expert witness fees, accident reconstruction, and medical record retrieval all get paid up front on a case that might not resolve for a year or two, and if that spending is not tracked apart from overhead, nobody knows what is actually owed back to the firm.
What we doKeeps advanced case costs in their own line, separate from ordinary overhead, so what is owed back to the firm on open cases stays visible. -
4
Referral fees look like a vendor bill
A fee paid to the attorney who sent the case is a professional courtesy, not a payment for work performed for the firm, and lumped in with other outgoing payments it hides how much of each settlement the firm actually keeps.
What we doKeeps referral fees paid and received in their own line, separate from staff pay and case costs. -
5
A quiet month looks like a slow firm
Three months with almost no deposits can mean every open case is still working through negotiation, not that the firm has stopped bringing in business, and a set-aside built for steady income gets the wrong number.
What we doTracks the set-aside against actual cash collected, not an average month, so a quiet stretch does not throw off what you owe.
Your categories
The categories Gus keeps for a personal injury firm.
Set up once for how settlements land and what gets advanced along the way. You never pick a category. He does, and an accountant checks it.
Money in
- Contingency feesThe firm's share of a settlement or judgment, kept apart from the client's portion and any cost reimbursement.
- Referral fees receivedFees from attorneys who sent the firm a case.
- Cost reimbursementsWhen a settlement or a client repays case costs the firm fronted.
- Court-awarded costsThe occasional judgment that awards costs on top of damages.
Money out
- Case costs advancedFiling fees, expert witnesses, accident reconstruction, and medical record retrieval fronted on a client's behalf.
- Referral fees paidWhat goes to the attorney who sent the case, kept apart from staff pay.
- Expert witness feesAccident reconstructionists, medical experts, and economists retained for a case.
- Medical record retrievalServices like ChartRequest or a records vendor used to build the file.
- Staff and case manager wagesParalegals and case managers who move files through negotiation.
- MarketingAdvertising, SEO, and lead generation, often the heaviest line in this niche.
- Malpractice insuranceAnnual or quarterly professional liability premiums.
What we watch for you
- Cash collected share
How much of the month is real cash landing versus cases simply working, since a quiet month can still be a busy one.
- Case cost outstanding
What has been advanced on open cases and not yet reimbursed, so it never quietly becomes a loss.
- Referral fee share
What the firm pays out on referred cases against what those cases bring in.
- The set-aside
What the firm will owe, tracked every month even through a quiet stretch, so tax season is a number you already know.
Ask Gus
Things personal injury attorneys ask Gus.
Text him like you would text anybody. He answers in plain English, and when a question is above his pay grade, an accountant looks and gets back to you.
That is the number after the hospital lien and the referral fee came out before the wire landed. I booked what actually reached the account, and it matches your settlement statement.
I logged it as a case cost advance, not an expense, so it stays visible as money owed back to the firm once the case resolves.
If you paid them $2,000 or more and they are not on your payroll, they get a 1099-NEC by January 31. I keep that list running all year.
The tax side
The tax side of a personal injury practice.
Most of what goes wrong here is timing. Income counted before it lands, costs treated as spent instead of owed back, and a set-aside built for a steady paycheck the firm does not actually get.
What your return has to get right
Your accountant signs it, so it gets done right the first time.
- Contingency income is counted on receiptThe firm's fee counts as income when the settlement actually lands, not when the case was taken or even when it settled on paper. A set-aside plan needs to work around that timing, not a steady monthly assumption.
- Referral fees need a 1099Anyone not on payroll who is paid $2,000 or more in 2026, including a referring attorney, gets a 1099-NEC by January 31. Gus keeps that list running as fees go out.
- A big settlement year can shrink the pass-through deductionMost owners can deduct up to 20 percent of business profit, but law is a specified service trade, so a year with a large settlement can push taxable income above $201,750 single or $403,500 joint, where the deduction starts to shrink.
- Quarterly estimated taxes on lumpy incomeA firm without steady payroll withholding typically owes estimated payments on April 15, June 15, September 15, and January 15, and a settlement landing in one quarter can change what is owed in the next.
Deductions personal injury law firms miss
Your bookkeeper knows what to look for in your statements. You never have to.
- Bar dues and CLE
- Malpractice insurance
- Legal research subscriptions
- Case management software
- Medical record retrieval fees
- Court reporter and transcript costs
- Expert witness fees on the firm's own dime
- Mileage to depositions and court
- E-filing and PACER fees
- Advertising and lead generation
- Payment processing fees
- Office rent and utilities
General information about 2026 federal rules, not advice for your business. Your accountant looks at your actual numbers before anything gets filed.
All year, not just April
A personal injury year, kept every month.
Settlements land on their own schedule, not the calendar. Gus keeps the set-aside honest either way. Every month in between, your bookkeeper closes the books and speaks up the moment something looks off.
- January
Plan around lumpy income
Last year's return gets started, the referral fee 1099 list is ready, and the set-aside is planned around cases likely to settle this year, not a steady paycheck.
- April
Filed, big year or not
Your return is filed and signed. If last year had a big settlement, the set-aside already accounted for it, so April has no surprise either way.
- July
Halfway check
Where the firm stands, what settlements are expected before year end, and whether the set-aside needs adjusting for a case that just resolved.
- October
Before year end
A look at any equipment or software worth buying before December, and a check on case costs still outstanding on open matters.
What you get
What you pay depends on what your business needs, and it does not move after that, busy season or slow. No hourly bills, no surprise invoices, no setup fee.
Book a call- Monthly bookkeeping
Every transaction sorted into categories set up for personal injury law firms. You never categorize a thing.
- An accountant checks every transaction
Real review, every month, before your books close. Not a spot check.
- Your business tax return, filed
Prepared, reviewed, and signed by that same accountant every year.
- The monthly number
What you made, what you spent, what to set aside for taxes.
- Your own bookkeeper
A real person assigned to your business, in the app whenever you need them. No hold music.
- On your books all year
Every month, not just in April. Your team speaks up whenever something is worth your attention.
- Cancel any time
No contract. No cancellation call. Your books are yours.
Straight answers
Questions personal injury attorneys ask first.
Can Gus handle the trust account for settlement funds?
No. Trust and IOLTA accounts have strict state bar rules that your ethics counsel or a trust accountant handles. Gus works only from the firm's regular operating account, after funds have already been disbursed.
How does Gus book a settlement that includes a medical lien?
He books what actually lands in the operating account as the firm's fee, after the lien and any cost reimbursement are accounted for separately, so the month reflects real cash rather than the headline settlement number.
My income is nothing for months, then one big settlement. Does that mess up my taxes?
No, but it changes how the set-aside gets planned. Gus builds it around real cash landing rather than a steady average, so a big settlement quarter gets its own attention instead of distorting a number that would be wrong either way.
We split fees with a referring attorney on most cases. Can Gus track that?
Yes. Referral fees paid and received get their own line, separate from staff pay and case costs, so you can see what each referral relationship actually costs or brings in.
Our case management software already tracks costs by case. Do we need Gus too?
Case software tracks costs by matter for billing. Gus works from what actually moves through the bank account and turns that into the firm's real books and its tax return, which is a different job.
Can Gus show us which kinds of cases are actually worth taking?
He tracks case costs, referral fees, and what each settlement actually brought in, so patterns across case types become visible over months, even though every case is its own negotiation.
Is a real accountant checking my books?
Yes. You get your own bookkeeper, Gus does the first pass on every transaction, and an accountant checks every one before your month closes. That same accountant prepares, signs, and files your business return. Goatkeeper is not a CPA firm, and we never pretend a person looked when they did not.
What does it cost, and can I cancel?
It starts at $197 a month, depending on what your business needs. No setup fee, no hourly bills, no contract. Cancel any time from the app, and your books go with you.
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What makes a bookkeeper worth paying for Every business we keep books for
Book a call
Pick a time. That's the whole signup.
Fifteen minutes with a real person on our team. They look at where your books are, tell you straight what it takes to get caught up, and get you set up on the spot if it fits.
- $197 a month to start
- An accountant on every transaction
- Cancel whenever