Accounting software for legal firms is often described as if a law firm's books were a different discipline. They are not. A firm buys, sells, pays staff and closes a month like any other business, and for all of that ordinary accounting software is ordinary accounting software. There is exactly one difference, and it is not a formatting one: a firm holds money that belongs to its clients, that money is a liability and never income, it must be kept separate, and it must be reconcilable to the individual matter at any moment. This page is about that one difference and where it stops.
Client money is a liability, not income
Money held on a client's behalf never belongs to the firm and never appears as revenue. A system that lets a client-account balance flow into the profit and loss is not one you can be examined on. This is the first thing to test and it takes five minutes to test.
The reconciliation is three-way
Three things have to agree: the client bank account, the client ledger, and the sum of the individual matter balances. Any two of them can agree while the third does not, which is precisely how shortfalls stay hidden, and it is why the third total has to be producible on demand rather than assembled once a year.
Where the difference stops
Once client money is separate and reconcilable, the rest of a firm's books is a business closing its own month like any other -- payables, accruals, the bank reconciliation, the sign-off. That work is not legal-specific and buying a legal-specific product for it is how firms end up paying twice.
Questions people ask about accounting software for legal firms
Does every legal firm hold client money?
No. Some practices never do, and for those the case for legal-specific accounting software is much weaker. Ask yourself whether you hold it before you pay a premium for handling it.
What are the rules?
Your jurisdiction's. The ABA's model rule on safekeeping property is where most US state rules descend from, but they are state rules and they differ in the detail that matters, such as how often the reconciliation must be done and how long records are kept.
Can we run client money through our normal ledger?
Some firms do, with a rigidly separated set of accounts and a lot of discipline. The risk is not the arithmetic, it is that nobody can produce the matter-level total when it is asked for.