Finance Stack for German Law Firm
Stack for lawyers and law firms. RVG billing, Anderkonten, trust accounting, BRAO compliance.
How This Stack Works
Engagement letter in ContractHero → Legal work → RVG/hourly billing → Client pays to bank/Anderkonto → DATEV accounting → finban for cash flow → Specialized Steuerberater
App Compatibility
How well the apps in this stack work together
8/10 pairs known
Integrations
Notes
No known integration between fyrst and contracthero
No known integration between finban and contracthero
Apps & Services in This Stack
Each category below shows the recommended app or service and alternatives. Click on any item to learn more.
FYRST
Deutsche Bank's digital business banking offering. German reliability with modern features.
Why this choice
FYRST offers the traditional banking credibility that law firms need, with straightforward Anderkonto (trust account) setup required for holding client funds. The established banking relationship provides professional legitimacy when dealing with courts, notaries, and institutional clients. German-based support understands the specific compliance requirements for legal practices under BRAO regulations.
When to switch
N/A
Alternatives
lexoffice
Popular German accounting software by Lexware. GoBD-compliant, great for small businesses.
Why this choice
lexoffice handles general invoicing needs while many law firms use specialized Kanzleisoftware for RVG-compliant fee calculations. It works well for flat-fee arrangements, hourly billing outside RVG, and corporate client retainers. The system integrates with your main accounting while leaving room for specialized legal billing software where needed.
When to switch
Specialized legal software.
Why this choice
DATEV is the gold standard for German law firm accounting, with built-in understanding of Anderkonten trust accounting requirements. Law firms typically work directly with their Steuerberater through DATEV's collaborative platform, ensuring BRAO-compliant bookkeeping. The system properly separates client trust funds from operating accounts, essential for bar association audits.
When to switch
N/A
Why this choice
Legal work creates long payment cycles between engagement and final settlement, making cash flow planning critical for law firms. finban helps track when retainer invoices, milestone payments, and final bills will convert to actual cash. The scenario planning features help model different outcomes for contingency cases or complex litigation with uncertain timelines.
When to switch
N/A
Accountable Tax Service
Combination of tax software and human tax advisors for freelancers.
Why this choice
Lawyers need a Steuerberater who understands Freiberufler status, partnership structures common in law firms, and the unique requirements of Anderkonto trust accounting. They can advise on optimal structures as your practice grows from solo practice to Partnerschaftsgesellschaft. Experience with legal practices ensures proper treatment of retainers, success fees, and the timing of revenue recognition.
When to switch
Find one specializing in legal practices.
Why this choice
ContractHero provides German-compliant contract management for the high volume of documents law firms handle: engagement letters, NDAs, third-party agreements, and vendor contracts. Automated deadline tracking prevents missed renewal dates or termination windows. The secure, auditable storage meets the document retention requirements that bar associations and clients expect from legal practices.
When to switch
Juro for AI-powered contract analysis.
Alternatives
About This Business Type
Law firms in Germany operate under strict professional regulations that extend to financial management. The Bundesrechtsanwaltsordnung (BRAO) governs practice, while the Rechtsanwaltsvergütungsgesetz (RVG) sets fee structures for many legal services. Your finance stack must accommodate both regulatory requirements and the practical realities of running a profitable practice. Revenue recognition for legal services often involves retainers, hourly billing, contingency arrangements, and statutory fees (RVG). Each creates different timing and documentation requirements. Escrow handling (Fremdgeld) for client funds requires absolute separation from operating funds—commingling is a serious professional violation. Partnership structures vary from solo practitioners to large partnerships. Common forms include Einzelanwalt, Partnerschaftsgesellschaft (PartG), PartGmbB (with limited liability for partners), and Rechtsanwalts-GmbH. Each has different liability, tax, and organizational implications. The PartGmbB has become popular for balancing partnership flexibility with limited personal liability.
Common Challenges
- RVG fee calculation and documentation
- Fremdgeld (client funds) separation
- Work-in-progress and unbilled time tracking
- Long collection cycles for large matters
- Partner compensation and profit distribution
Compliance Requirements
- RVG statutory fee compliance
- Fremdgeld account requirements
- Rechtsanwaltskammer membership obligations
- Legal services VAT treatment (19%)
- PartGmbB structure considerations
Why This Stack Works
- Time tracking and billing integration
- Fremdgeld account management
- RVG fee calculation tools
- WIP and AR tracking
- Partner distribution accounting
Frequently Asked Questions
How do German law firms handle Fremdgeld (client funds)?
Fremdgeld must be kept in separate Anderkonto (escrow accounts), completely segregated from firm operating funds. Never use client funds for firm expenses—this is a serious BRAO violation. Track each client's Fremdgeld separately. Interest on Fremdgeld typically belongs to clients (or donated to Rechtsanwaltskammer). Your accounting must clearly distinguish Fremdgeld from firm revenue and expenses.
When does revenue recognition occur for legal services?
Generally when services are rendered and billed. For ongoing matters, bill periodically based on work performed. RVG fees: recognize when matter concludes or fees are calculated. Retainers: recognize as work is performed against retainer. Contingency: recognize when outcome occurs and fee is determined. Track WIP (unbilled time) as an asset for financial planning, but don't recognize as revenue until billed.
What's the advantage of PartGmbB for law firms?
Partnerschaftsgesellschaft mit beschränkter Berufshaftung (PartGmbB) limits individual partner liability for professional malpractice to firm assets, while maintaining partnership tax treatment (no corporate tax, partners taxed on their share). Requires professional liability insurance with minimum coverage. Popular choice for mid-size firms wanting liability protection without GmbH double taxation and restrictions.
How should solo Rechtsanwälte structure their finances?
Separate business and personal accounts. Track billable time from day one—essential for billing and practice management. Use legal-specific software for time/billing (RA-MICRO, Advoware, AnNoText) that exports to accounting. Quarterly VAT returns (legal services are 19% VAT). Estimated income tax payments quarterly. Keep Fremdgeld completely separate. Consider forming PartGmbB or GmbH as practice grows for liability protection.
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