Law Firm Accounting Services in Calgary, Alberta

Tax Buddies provides specialized accounting for law firms, solo practitioners, and legal partnerships in Calgary. Our CPA team understands Law Society of Alberta requirements, trust accounting rules, partner income allocation, and the unique financial management needs of legal practices. We handle the numbers so you can focus on practicing law.

Who We Help

Law Firm Accounting Services We Provide

Trust Accounting and Compliance

Law Society of Alberta rules require lawyers to maintain client trust accounts separate from general accounts, with monthly reconciliation and specific record-keeping requirements. We handle trust account management—recording receipts and disbursements, performing monthly reconciliations, maintaining the required trust comparison report, and ensuring your trust records are always audit-ready for Law Society inspection.

Partner Income Allocation and T5013 Filing

Multi-partner law firms must allocate income based on partnership agreements, which may include guaranteed payments, profit shares based on origination or hours, and draws. We track each partner's capital account, prepare T5013 slips, and coordinate with each partner's personal tax filing to ensure consistency.

Professional Corporation Tax Planning

Alberta lawyers can incorporate as professional corporations, accessing the 11% small business deduction on retained earnings. We handle incorporation setup, annual compliance with the Law Society, salary vs. dividend optimization, and long-term tax planning. We also structure holding companies for lawyers with significant retained earnings.

Billing and Accounts Receivable Management

Law firms often have significant work-in-progress (WIP) and accounts receivable. We track billable hours and WIP, manage client billing, monitor receivable aging, and help improve collection procedures. We also assist with fee arrangements including contingency fee accounting and retainer trust management.

Payroll and Staff Management

We process payroll for associates, paralegals, legal assistants, and support staff—including CPP, EI, income tax deductions, T4 preparation, and CRA remittances. We also handle articling student compensation and benefits tracking.

Our Process

Step 1: Practice Assessment

We review your firm's current accounting systems, trust account procedures, partnership agreement, billing practices, and compliance history. We identify gaps and set up systems for accurate, compliant accounting.

Step 2: Ongoing Financial Management

We handle monthly bookkeeping, trust account reconciliation, accounts receivable tracking, payroll processing, and partner draw management. Your firm receives monthly financial reports showing revenue, expenses, profitability, and key metrics.

Step 3: Year-End Filing and Advisory

We prepare partnership or corporate tax returns, allocate partner income, file T5013 or T2 returns, and provide strategic advisory on tax planning, succession, and practice growth.

Local Expertise: Law Firm Accounting in Calgary

Calgary is home to many of Alberta's largest law firms as well as hundreds of small and mid-size practices. The Law Society of Alberta's trust accounting requirements are stringent, and non-compliance can result in audits, practice reviews, and disciplinary action. Our CPA team has deep experience with Law Society trust accounting rules and the specific needs of Calgary's legal community—from downtown corporate firms to community-based family law and criminal defence practices.

What You Can Expect

Timelines: Trust account reconciliations completed within the first two weeks of each month. Monthly financial reports delivered by mid-month. T5013 slips prepared by March 31.

Pricing: Law firm accounting packages based on number of lawyers, partners, and transaction volume. Call 403-768-4444 or book a free consultation.

Why Law Firms Choose Tax Buddies

Frequently Asked Questions — Law Firm Accounting in Calgary

Why do Calgary law firms need specialized accounting? Law firms have unique requirements—trust accounting compliance, Law Society reporting, partner income allocation, WIP tracking, contingency fee accounting, and professional corporation rules. General accountants often miss critical compliance requirements. Tax Buddies specializes in these areas.

How should law firm trust accounts be managed in Alberta? Law Society rules require separate trust accounts, monthly reconciliation, detailed ledger cards for each client matter, a monthly trust comparison report, and immediate depositing of client funds. We handle all trust accounting and ensure you're always audit-ready.

Should I set up a professional corporation as a lawyer in Alberta? If your net practice income exceeds $150,000 and you don't need to withdraw it all, a professional corporation can save significant tax at the 11% rate. We handle Law Society approval, incorporation, and ongoing compliance.

How is partner income allocated in a law firm? Allocation follows your partnership agreement—which may use equal shares, lockstep, origination credit, production credit, or hybrid methods. We ensure allocations are properly documented, reflected in financial statements, and reported on T5013 slips.

What are the trust accounting penalties for non-compliance? The Law Society can impose practice reviews, spot audits, suspension, and disciplinary action for trust account irregularities. Common issues include commingling funds, late reconciliation, and improper trust withdrawals. We prevent these problems with rigorous monthly procedures.

How should law firms track work-in-progress (WIP)? WIP represents billable time and expenses not yet billed to clients. We track WIP aging, help identify stale WIP for writeoff or billing, and account for WIP in your financial statements. Proper WIP management directly impacts cash flow and revenue recognition.

Can Tax Buddies handle contingency fee accounting? Yes. Contingency fees create unique revenue recognition challenges—the fee isn't earned until the case is resolved. We track contingency matters, recognize revenue at the appropriate time, and manage the tax implications of large, periodic fee receipts.

What payroll obligations do law firms have? Standard employer obligations—CPP, EI, income tax deductions, CRA remittances, T4s, and ROEs. We also handle articling student stipends, associate bonuses, and staff benefits tracking.

How do I plan for succession or retirement from my law firm? We help with practice valuation, buy-sell agreement structuring, estate freeze strategies, lifetime capital gains exemption planning, and transition timelines. Starting 3–5 years before your target retirement date is ideal.

How much does law firm accounting cost in Calgary? Based on the number of lawyers, partners, trust account volume, and staff. Solo practitioners and small firms fit within our standard business packages. Call 403-768-4444 or book a free consultation.

Ready to get your law firm's accounting in expert hands? Book a free consultation, call 403-768-4444, or visit us at 2017 Pegasus Rd NE, Calgary, AB. See our professional services accounting and partnership tax services.

Contact Tax Buddies Calgary at 403-768-4444 or visit www.taxbuddies.ca for a free consultation.