ALA Financial Management and Billing Flashcards
6 cards from real ALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 ALA Financial Management and Billing flashcards as text
What is a blended billing rate?
Answer: A single rate applied to all timekeepers regardless of seniority
A blended rate is a single uniform hourly rate applied across all attorneys on a matter, regardless of individual seniority levels.
Which budgeting approach starts each period from zero without reference to prior budgets?
Answer: Zero-based budgeting
Zero-based budgeting requires every expense to be justified anew each cycle rather than adjusting prior-year figures.
Under IOLTA rules, interest earned on pooled client trust accounts goes to:
Answer: State bar legal aid programs
Interest on Lawyers' Trust Accounts (IOLTA) is directed to state-administered programs funding access to justice and legal aid.
What is a key risk of commingling client and firm funds?
Answer: Professional discipline and potential disbarment
Commingling client funds with firm funds violates professional conduct rules and can result in bar discipline, including disbarment.
What does accounts receivable (AR) represent in a law firm's financial records?
Answer: Money owed to the firm by clients for services already billed
Accounts receivable represents billed but unpaid client invoices that the firm expects to collect.
Alternative fee arrangements (AFAs) are designed primarily to:
Answer: Provide clients with cost predictability
AFAs such as flat fees, capped fees, and success fees give clients greater budget certainty compared to open-ended hourly billing.