The distribution feature is a great tool for paying out compensation to your attorneys. The same invoices you’ve drafted, billed, and collected with LeanLaw can be sorted into distributions. You can then use these distributions as filters in the Compensation report. This report uses any values you assigned to origination and firm share and subtracts expenses, meaning you get a breakdown of how much compensation is owed to each attorney, and how much is headed to the firm. Even if you have salaries and bonuses you need to calculate on your end, the end result is data you can use to start cutting checks.
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How to create a distribution
LeanLaw’s distribution feature allows you to organize revenue allocation according to your firm's pay periods. Whether you pay out compensations yearly, monthly, or any other basis, you can organize distributions the way that's best for you.
1. Go to the Distribution tab
The first step is to navigate to the Distribution tab. On the main navigation bar, click on Billing. Within the Billing bar, on the far right side, click on the Distribution tab. This link will also take you directly to your firm's distribution tab.
2. Set your filter
You will likely need to customize the search filter on the left side of the page in order to see your recorded payments.
The Time Period filter, by default, will be set to last month, meaning only payments collected during last month will be shown. You can click the downward arrow in the Time Period dropdown and select Custom Filter to define a collection period.
The Show for User filters, by default, will show only payments in matters for which you were the responsible attorney. If you're handling accounting for the entire firm, you need to remove the Show for User filter entirely by clicking the x within the dropdown bar.
3. Select payments
Now that your desired filters are applied, you should be able to see the payments you want to move into distributions. You need at least one payment to create a distribution, so select any payment(s) you wish to add to your distribution by clicking the empty checkbox to the left of the payment(s).
4. Click Create Distribution
Now that all desired payments are selected, click the Create Distribution button at the bottom of the window. This will open the Create Distribution window.
5. Label your distribution
Within the Create Distribution window, you'll see fields for Date and Label. Whatever date you enter will follow your label in parentheses--so, in the example below, the distribution label would be "May 2021 Distribution (5/31/21)." Once you have your desired date and label, click the green Save button.
You now have a distribution to which you can add more payments and use to calculate compensation.
How to assign more payments to a distribution
Need to add more payments to an existing distribution? The process is nearly identical to creating a new distribution.
1. Select payments
While in the Distribution page, select one or multiple payments you wish to assign to a distribution by clicking the checkbox to the left of the payment(s).
2. Click Assign to Distribution
With the desired payment(s) selected, click the Assign to Distribution button at the bottom of the page to bring up the Assign Distribution window.
3. Select the distribution and save
With the Assign Distribution window open, click the dropdown menu and select the distribution to which you wish to assign the payment. If you don't see the distribution in the dropdown, you'll have to create it. Once you've selected the distribution, click the green Save button.
You've now added more recorded payments to your distribution!
Viewing and using distribution reports
Once you have a distribution created and populated with assigned payments, you can use LeanLaw's Compensation report to see how much compensation should be split among your attorneys and the firm from a collection period. You can click this link to view our article on reaching and using the Compensation report. If you're already familiar with it, you can use this link to go directly to your firm's Compensation report and get started.
Filtering reports by distribution
Once you're in the Compensation report, click on the filter labeled Distribution on the left side in order to select the distribution you created. This will filter the report to view only revenue made during the distribution.
Reading distribution reports
With the distribution filter applied, you'll see a firm-wide report of distribution revenue.
This report details how the distribution is allocated according to your origination and firm share values, if you've set any.
Collected: This column lists the total value of all collected payments in which the user was listed as the responsible attorney.
Share: This column lists the attorney's collected total minus compensation for any other originating attorneys on their matters as well as your Firm Share value, if these values were set.
Origination: This column lists revenue the attorney earned by being listed as an originating attorney, both on their own matters and on matters where another user is the responsible attorney.
Adjusted Share: This is the attorney's final share according to all settings you've set in LeanLaw. This value is the attorney's collected total, minus other attorney's origination shares, minus the firm share, plus revenue this attorney earned by being an originating attorney on other attorney's matters.
Expenses: This is the total spent on expenses for matters and projects. This gets subtracted from the collected total before any compensations are calculated.
You may have to do additional calculations by hand if your firm offers other forms of compensation, such as salary and bonuses, but the Adjusted Share column and the value listed in the Firm Share row should give you a good idea of what will be going to your attorneys and what will be going to the firm.
You can also go a level deeper by clicking on an attorney. This will give you a breakdown of what that attorney collected from each matter. You’ll again be able to see how the attorney’s earnings are allocated, this time on a matter-by-matter basis.
How to mark as distributed
Once you’ve paid out a distribution, it’s a good idea to mark the distribution as Distributed in LeanLaw. This will lock the distribution, preventing payments from accidentally being moved in or out.
1. Click Update Distribution
In your Distribution window, first make sure the distribution you wish to mark as distributed is selected in the Show box, indicated below. Then, click the Update Distribution button, just to the right of it. This will open the Create Distribution window, allowing you to edit the distribution.
2. Change status to distributed
Within the Create Distribution window, click the topmost dropdown bar labeled Status, and select Distributed. Now, click the green Save button.
You now know how to create distributions, assign additional payments to them, use your distributions for reports to pay your attorneys, and update distributions to "Distributed" status!